SMS is the shorter term for Short Message Service used by many mobile phones.
SMS banking is defined as banking transactions carried out using SMS messaging service.
It’s a facility used by banks or other financial institutions to send messages or alerts to customers mobile phones using SMS messaging, or a service provided by them which enables customers to perform some financial transactions using short message service.
Banking Apps are slowly replacing Text Banking in developed countries.
Today’s generation preference for instant gratification; don’t like visiting brick and mortar banks or ATMs, but fully depend on their mobile phones to deposit checks, transfer money and pay bills in real time.
What is mobile banking and how it works?
In order to use SMS banking services with any bank, initially you need to register your mobile phone number with the bank.
Once your identity is approved by your bank, you can send and receive funds via your handheld mobile phone or device.
It is important to note that your bank will provide you a password protected SMS banking account to ensure your secured SMS banking.
Mobile devices continue to replace legacy hardware tools across organizations, providing latest platform for new tools and processes. This shift has contributed to the ongoing expansion of the mobile ecosystem, as well as an increase in mobile app development in the financial services industry.
What is a OTP ?
One-time password (OTPs) are the latest tool used by financial institutions to combat online fraud. Instead of relying on traditional memorized passwords, OTPs are sent to a customer’s mobile phone via SMS, who are required to repeat the OTP to complete transactions using online or mobile banking. The OTP is valid for a relatively short period and expires once it has been used.
What is difference between mobile banking and net banking?
The primary difference between mobile banking and internet banking is that mobile banking is accessed through banks app on the smartphone, or sms on regular cell phones, whereas internet banking is accessed through a laptop or desktop computer.
Is there a fees for SMS Banking ?
The bank will charge a small monthly fee for using this SMS banking services in addition to commission charge per transaction.
SMS banking is now a popular means of money transaction in developing countries. Particularly, it is well accepted among nations such as India, South Korea, China, Sweden, Australia, African countries (Botswana, Kenya, Uganda, Tanzania, Cote d’Ivoire, Zimbabwe) and Indonesia where access to conventional banking is difficult for people living in rural areas.
SMS Banking in india
Mobile Banking is emerging as an alternate channel for providing banking services in India as its the second largest telecom market in the world.
Most Indian banks offers a range of mobile banking solutions, so that you can access your account information, make transactions and receive alerts on the go.
Irrespective of whether it is a public sector bank in India or a private one, the minute you open a new bank account, your mobile number is linked to that account. Existing customers too can ask the bank to upgrade their details and include their cell numbers.
Allahabad Bank, Indian Overseas Bank, Andhra Bank, Oriental Bank of Commerce, Bank of Baroda, Punjab National Bank, Federal bank, Catholic Bank,
Bank of India, Syndicate Bank, Bank of Maharashtra, Union Bank of India, Canara Bank, United Bank of India, Central Bank of India, Punjab & Sind Bank, Corporation Bank, UCO Bank,
Dena Bank, Vijaya Bank, Indian Bank, Axis Bank
SMS Banking Advantages
SMS banking has many advantages and can be used via mobile device to
- Pay bills
- Send and receive money electronically
- Deposit money into your account
- Pay for goods and services.
Like many other online banking services, SMS banking money transactions are carried out electronically. Many who uses SMS banking believes it’s secured, simple and quick. Especially, it is the best in handling simple day to day banking transactions which you don’t need to visit the bank always.
If you need to cash instantly using SMS banking, you just have to visit a suitable service provider who will help you to withdraw cash from your electronic account.
Most of these service providers are either well established banking services or online payment services provided by money transfer companies located worldwide. Alternatively, you can withdraw cash via SMS banking system using your debit card (linked to your electronic account) at a bank teller machine.
In many countries mobile banking or SMS banking is referred as m-banking. SMS banking is usually cheaper than other conventional and online banking services as low transaction fees are charged to the customer.
Some SMS banking services do not charge any commissions for receiving money. SMS banking transactions using password protected electronic account proved to be a highly secured and free of theft. There are customers who think saving money electronically is better than saving money physically. Hence, all depends on the customer’s preference and expectations.
Research carried out in many developing countries shows that SMS banking has enabled to integrate the rural communities to these countries’ economy.
More importantly, SMS banking has become a very popular transaction method for rural people who never had any opportunity to access well established banking system in those countries.
Available statistics indicate the rising market for SMS banking is India, Bangladesh, Kenya and many more, where most of the rural population uses some form of SMS banking.
The technological advancements of mobile phones have simplified the common man’s life by allowing him to check his balance, facilitating fund transfers, depositing cash and even shopping without hard cash.