Payment process through mobile phone will now no longer be limited to fund transfer operations only. The National Payments Corporation of India (NPCI) has received approval from Reserve Bank of India to extend payment facility through mobile phones for merchant transactions too.
Merchant transactions refer to monetary transactions for various other purposes other than banking. This includes payment of insurance premium, purchase of air and railway tickets among others.
According to CMD of NPCI, Mr A P Hota, the process will come into practice in the upcoming 2-3 months.
A pilot project in this regard has been initiated by NPCI with six banks like ICICI Bank, Union Bank of India, State Bank of India and Kotak Mahindra Bank.
Banks would be required to install the necessary software for this in their systems and integrate the selected merchants to it.
"Once operational, it will be very convenient for customers to make their payments. For instance, if you can buy the platform ticket before you reach the railway station, you will save a lot of time. The ticket can be downloaded on your mobile." Mr Hota said.
"The technology is still new. It will take time for it to become a mass technology," he said.