The Hindu Business Line : Mobile phone as a local bank

Hyderabad, June 17 A wireless technology solution developed by researchers at NXP Semiconductor and deployed in rural areas is set to transform people’s lives offering them access to services of banks and micro finance institutions.

The Director of Global Sales, NXP Semiconductors, Mr Ashok Chandak, said this technology solution, tried as a pilot in Karimnagar district of Andhra Pradesh and several other parts of the country, is now touching over half a million people across four States.

NXP is running this project in partnership with SBI and seven other banks. It has the potential to bring about financial inclusion mandated by the Central Government and the Reserve Bank of India, Mr. Chandak told Business Line.

Two system integrators including HCL Infosystems and several other terminal manufactures are now part of this project.

How it works

How does the technology work?

A bank representative with three devices, a mobile phone, a smart card reader and a finger-print reader, goes to a rural household and helps inmates transact.

All the information related to the account is stored in the mobile terminal. The user has a smart card that stores all his data and which serves as an ID card as well. The third device helps him access his account through finger-print recognition.

NXP’s chip uses ‘near-field communication (NFC)’ technology. It allows each of the three devices to ‘talk’ to the other two. This helps exchange data between these devices as long as they are located near each other.

For example, if the account holder wants to deposit cash into his account, he hands over the cash to the bank representative.

The banker uses the finger print reader to authenticate the account holder’s identity. Then, he enters details of the transaction in the mobile phone, which acts as a local bank branch. The smart card reader is then used to update the records in the card the account holder retains with himself – much like a bank passbook.

Cash deposits, withdrawals, utility payments, money transfers and micro insurance are among the transactions that can be executed in this system, Mr Chandak said.

This local bank solution was rolled out by NXP in partnership with A Little World, a provider of mobile platforms for inclusive banking.

Pilot project

The SBI pilot was deployed in Karimnagar in AP, Pithorgarh in Uttarakhand and remote hilly tracts of Mizoram and Meghalaya. Union Bank, Axis Bank, PNB, SBH, Andhra Bank were among others partnering in the project.

Some State Governments have evinced interest in this technology solution and want the smart card to serve as an all purpose interface, including for National Rural Employee Guarantee Scheme and possibly even pension payments.

From the perspective of the account holder residing in far flung places, he feels that his money is secure and that no tampering is possible thanks to finger print ID-based access.

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