MUMBAI: Cardless cash withdrawal will be available from one lakh bank ATMs by the end of the current year for remittances initiated by customers of these banks. Moreover, cardless withdrawal facility may also be made available at lakhs of point of sale terminals at shops which provide cash-out facilities.
Lenders such as Bank of India and Kotak Mahindra Bank already allow customers to remit funds to anyone with a mobile phone. The service allows account holders to direct their bank - via an SMS or an app - to transfer funds to a particular mobile phone number. The bank then messages two separate codes to the account holder and the receiver on their respective mobile numbers. The receiver has to enter the two codes at the ATM to withdraw cash.
The State Bank of India, country's largest lender, and Punjab National Bank are also set to extend cardless withdrawal. This service has been possible because of the IMT Payment System conceptualized and built by EMpays Payment System founded by Ravi Rajagopalan, a former executive with French telecommunications firm Alcatel-Lucent.
Although some banks already provide cardless withdrawal, this service is limited to remittances initiated by customers of these banks. IMT will bring together all its member banks so that the combined network is made available for withdrawals. "To become members of the multi-bank IMT system, existing member banks need not make any technical changes to their IT systems. All we have done is removed a software block which allows IMT to function across banks," said Rajagopalan.
Rajagopalan expects IMT to evolve into a proper consumer product. "Today, there are a large number of low-value cheques which are used for payments. We expect to take away share from the cheque market. We will also take away share from the unofficial money transfer schemes."
Another highlight of the IMT system is that it works not only in ATMs but across channels and can be used for sending funds to business correspondents of banks as well. "IMT can work in ATMs as well as point of sale terminals. All that is required is a device that can take the authentication parameters. Theoretically, it is possible to have shopkeepers offering remittances through PoS," said Rajagopalan.