Demonetisation has spurred India’s shift towards a cashless digital economy where all money transactions can now be completed through the mobile phone.
While this is a very welcome and desirable move, do we all really understand the process and implications of transferring money through mobile phones?
With any development in technology comes the concomitant danger of its potential misuse and so we need to carefully understand how to use this technology and how to prevent its misuse.
Let’s have a look at the process of mobile money transfers and how we can secure ourselves from misuse of this technology that could prove very costly for us.
Understanding the difference between ‘Net Banking’ and ‘Mobile Wallet’
Net Banking involves performing any transactions like receiving or transferring money within India or overseas, requesting a cheque book or e-statement, getting a print-out of your bank statement etc, all without having to stand in the queue at your bank branch. You can access your bank account using a PC, tablet or mobile phone from anywhere anytime. The amount of receipt or transfer made does not matter.
To access your account, all you need to do is go to your bank’s website and feed in your user name and password following which you get access to your bank account and can perform any of the above mentioned banking tasks. Some banks have a second layer of security and generate a One Time Password (OTP) which is sent to your mobile to enable you to transfer money.
Net banking can be accessed from anywhere including public networks.
This is a more recent development in India, wherein a user can download a mobile wallet application (‘app’) and then deposit a certain amount into the mobile wallet. From this wallet, one can transfer money to another person’s wallet provided that person has the same app too. The limit is the maximum which is permitted by the wallet and needs to be topped up regularly.
How to protect your Net Banking and Mobile Transaction facilities from misuse
- We need to understand that the first level of security is the password. Global studies have shown that most people tend to use predictable passwords i.e. names of pets, children, birthdays and common combinations such as xxx, 007, 1212 etc. So, the first precaution to be taken is to ensure that the password is a combination of letters of the alphabet, numbers and symbols such as #, @, *, etc. The longer the combination, the more difficult it will be for a hacker to break in.
- Change the password frequently. The big mistake most users do is retain one password for years. Try and change the password at least monthly, if not more often.
- Do not save the passwords in your mail account or in an open folder in your PC. Ideally, it must not be saved anywhere in your PC or mobile phone. But if you must, then create a password lock for a specific folder in your PC and follow the above suggestion for creating a complex password and to keep changing it frequently.
- In case of mobile phones, always keep your phone under password lock. Passwords must NEVER be shared with anyone, not even family members.
- If you lose your mobile phone then: a) call the mobile service provider immediately and get the phone blocked; b) call your bank and request them to block all transactions.
- If you still need to keep your personal information or password in your mobile, then you must download Apps that allow you to create a password protected folder in your mobile.
- Hackers are getting more sophisticated and malware can also infect your PC, Tablet or Mobile. Most people are not aware that mobiles too are equally vulnerable to hacking and therefore all devices must have anti-virus software loaded to protect. Unfortunately, while people take the initiative to use anti-virus in their PCs, their mobiles remain without any anti-virus protection.
- With mobile transactions set to increase dramatically in India also comes the chances of its misuse. Therefore, if you have not downloaded an anti-virus on you mobile, please do so immediately.
UPI – A safe game changing development in the offing
Unified Payment Interface (UPI) is a payment enabling platform developed in India by the National Payments Corporation of India (NPCI) in collaboration with Reserve Bank of India and the Indian Banks Association (IBA).
At present, 30 banks are offering their own platforms which operate independently. With UPI, all banks will operate on a single platform and this will enable seamless transfer of money between banks and customers through their mobile devices. In other words, the mobile phone itself will function like a debit card.
What’s more, UPI will work with all feature phones and this platform can be used by anybody anywhere in India. Presently there are around 23 crore e-wallets in use and around 40 crore smartphone devices. The numbers are set to rise dramatically and UPI is going to provide stiff competition to existing mobile wallet players.
The benefits of switching to UPI are several. First, the fact that over 30 banks will migrate to UPI with more on the anvil, will make it very attractive for users to opt for it.
NPCI, which developed UPI, is also the developer of RuPay, an interbank payments processing service similar to VISA and MasterCard. RuPay is rapidly gaining popularity as it is indigenously developed and the service charge per transaction is much lower than that of Visa and MasterCard. The set-up charges for merchants is also lower.
UPI is making financial transactions very safe by creating a unique identification or address for each user which is separate from the bank account of the user or credit/debit card.
Unlike mobile wallets which use ‘push’ facility to make payments, UPI uses ‘push’ and ‘pull’ to send and receive money. One can transact up to Rs 1 lakh per day, with money in your bank account continuing to earn interest, unlike in e-wallet.
To start using UPI, one has to download it on their mobile and get allocated a virtual address. After the first transaction, an MPIN number is generated and one can send money to another person. All one has to do is feed in the other person’s UPI Id or bank details and the transaction goes through. UPI uses a two-step security and is the safest for mobile-based transactions.
It is time to give up using cash and make the switch to cashless transactions. Ensure safety precautions and go digital today!