ABN Amro India has launched its Mpower mobile banking and payments platform as a way to better serve its customers and build valuable relationships with wireless operators, banks and merchants. Given the popularity of SMS (short messaging services) in India, the bank found initial pilots of the SMS-based Mpower service to attract over 40 per cent of its client base. A selling point is the ability of consumers to make mobile payments at merchants equipped with Mpower terminals, with the bank validating the transaction data before sending the customer a return SMS message with approval for the payment.

The bank’s use of a single phone number (8877) for mobile payments limits the potential for fraud, and the validation SMS sent to the customer, contains the merchant’s name, transaction total and ABN Amro’s transaction reference number, according to the Express Computer Weekly. After the customer validates the transaction by keying ‘MPA’ and the PIN into their phone, the funds are transferred to the merchant’s account, and a confirming SMS is sent to both parties. In short, the Mpower system is suited to payment at physical retailers, for pizza deliveries, or for the ‘remote’ purchase of cinema tickets.

ABN Amro ensures the security of mobile payments via its Mpower service by assigning a unique PIN to the mobile phone number registered at the bank by the consumer. This way, even if a phone handset is lost or stolen, the PIN is deactivated after five attempts, which means that a third party who manages to compromise both the PIN, and the account number, will have difficulty in making a transaction. Mpower also promises to reduce ABN Amro’s operational costs in that payments take just 40 seconds, versus a minute and a half for a credit or debit card, for which the bank has to give a 2 per cent discount fee.

(The Hindu Business Line)