How does mobile banking work?

Many people have started maintaining bank accounts to store their wealth, jewellery, assets, and other valuable things. They prefer to store them in a safe and secured place where there is no fear of them getting misused or misplaced. All these facilities encourage the rest of the population to start saving for the future and invest in other financial resources for lifetime benefits on returns.

With the introduction of smartphones, all services have become digitalised. Banks have started offering mobile banking services where account holders can track their transactions, pay their bills, transfer funds to other accounts, etc. using their phones. The need to rush to the bank for minor tasks is no longer required, and people can focus on other priorities.

Online banking operates using three methods: SMS, mobile web, or specialised applications for Android and IOS devices. SMS facility includes mobile texts and alerts to transfer funds, check the bank account balance, pay bills, and lots more. Users can log on to their accounts using the web browser and conduct all banking transactions.

E-banking applications connect users directly to the bank’s server without using a mobile web browser. They are available for download on several platforms. Some banks are also offering additional services like account rewards confirmation, person-to-person payments (P2P), and Remote Deposit Capture (RDC) facility. RDC enables users to scan checks and transmit the images to banks for clearing. It means that customers can access their money faster while automating yet another deposit feature.

Why does it matter?

For consumers, internet banking is beneficial. They can manage administrative tasks without any hindrance like closing a sale, meeting new customers or smoothing back office shipping glitches. Banks can focus on fulfilling the needs of customers while managing processes to meet the demands of the generation.

Nowadays, many apps facilitate digital banking in India. One of them is the BHIM app which does not require an internet connection to make payments. Users can dial *99# from their phones and use its features. Following are the facilities available on this application:

• Sending money: It enables users to send money using the Virtual Payment Address (VPA) or a combination of the Account Number and IFSC. They scan the QR code to make payments.
• Requesting money: Users can initiate a collect request using the Virtual Payment Address (VPA). They can also transfer money using their phones from the number registered with the app. They have to compulsorily link their mobile number to the bank account to access the services.

Transactions: Users can check their transaction history and pending BHIM UPI collect requests. They can check their account balance and report issues as well.