The Hindu Business Line : mChq transforms your mobile

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mChq transforms your mobile

Shanthi Venkataraman

Mr Akhil Gupta, Joint Managing Director, Bharti Tele-Ventures Ltd. (left) with Ms Chanda Kochhar, Executive Director, ICICI Bank, at the launch of Airtel mChq. — Kamal Narang

IMAGINE doing your shopping without any money or credit/debit cards! You can, if you had a "mobile wallet". A concept that has caught on in Japan and other Asian countries, mobile wallets allow you to use your cell phone like a wallet. You not only do away with carrying cash, you no longer need to carry your credit or debit cards! This is the convenience that ICICI Bank, in collaboration with Airtel, proposes to offer its customers with "mChq". The service, offered to ICICI Bank cardholders who are also customers of Airtel, is now available only in Mumbai, Delhi and the National Capital Region. Only now at the pilot stage, the concept would have to take off at retail outlets, before you can begin to enjoy the advantages of such a product. While the finer details are yet to be worked out, techno freaks out there might want to keep an eye out for this product. You can also check out Bank of Punjab's `Mobile Wallets', which was introduced about two years ago.

How mChq works

`mChq' is essentially a mobile-to-mobile payment option. Here is how it works. All personal information that is normally stored in that magnetic strip on the back of your credit card is loaded on to your SIM card in a secure format; Airtel would, free of cost, replace your existing SIM card with one that has a 128-bit encryption key and offers a higher degree of safety than a regular SIM card. ICICI Bank cardholders would be issued an add-on card, which would allow them to access this service.

If you decide to go shopping, all you have to carry is your mobile phone. At the shop, you have to give your phone number to the merchant, who would then send, on a special mobile phone, an SMS (short message service) to an Airtel server. The cardholder gets an SMS asking him to confirm payment. The customer enters his/her personalised PIN number, as an added security measure, and sends back an SMS confirming the amount to be paid. The merchant and the customer then get an SMS confirming the completion of the transaction. The exchange of SMSs happens within a minute. The advantage is greater in the case of a remote transaction. Most remote transactions are now settled via the Internet. Paying through the mobile is quicker and more convenient, as you do not need to log onto the Net and enter your personal information.

Initially, there will be a daily transaction limit of Rs 5,000 or 10 transactions on the card, whichever is exhausted first. There are no charges at present though they may be introduced if the concept catches on.

Suitability

`mChq' offers a convenient mode of electronic payment besides the Internet. It also facilitates small-ticket purchases. For instance, you can purchase products for as low as Rs 50 in your neighbourhood `kirana' store. Most departmental stores tend to accept cards only if the bill amount is beyond a certain limit, say Rs 250. If this concept gains acceptance, you no longer need to pay cash for small purchases, too.

According to Mr B. Madhivanan, General Manager, ICICI Bank, merchant outlets stand to gain the most from this facility. Even now, only a few outlets accept credit cards, as the infrastructure associated with it is still costly for most retailers. Merchants may be more favourably inclined to this mode of payment as all they need is a mobile phone, which serves as a communication device and does away with a point-of-sale terminal that is required for credit cards.

You are likely to run into a few hassles when it comes to settling a dispute on a product.

For instance, if you do not save your SMSs, you would have to check up with the confirmation archives of the bank for proof of a transaction.

It would also be tedious to reverse a transaction. Much would depend on your relationship with the merchant. These are also problems that you would face when you shop online.

Initially, you may be more comfortable using this service for impulse purchases such as buying movie tickets. But it will be a while before several outlets offer this facility, so you may want to wait for the idea to catch on. Abroad, mobile wallets can be used for a variety of purposes. i-mode, the mobile wallet from NTT DoCoMo, allows customers to consolidate credit cards, club membership cards, bus/train passes into a single chip on a mobile phone.

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