MUMBAI: Several banks have started offering cardless withdrawal facilities to their customers. ICICI Bank is the latest to join this bandwagon. Bank of India had launched a similar facility earlier this year.Other players in this space include Axis Bank and IndusInd Bank. Customers of the banks can use the facility to transfer funds even to those who do not have a bank account.
"The sender needs to have an account with us and he can use either internet banking or walk into a branch to send money to a beneficiary's mobile numbers. The beneficiary need not have a bank account," says Rajiv Anand, group executive and head, retail banking, Axis Bank.
For example, if you are living in a metropolitan city and wish to transfer funds to your family member who does not have a bank account, you can make use of this service.
However, the recipient should have a mobile phone connection to complete the transaction. The entire transaction can be completed online, and the process for initiating transfer and withdrawing the amount is similar across the banks.
How does it Work?
To begin with, you must add the name of the recipient to the list of cash withdrawal beneficiaries and provide the mobile number, name and address to the bank.
Once your request to register this recipient is accepted, you can select the recipient and initiate the transfer. You will get a numerical code on your cell phone, which should be shared with the recipient. The system will send an SMS containing another code (onetime password) to the recipient's mobile, too.
The recipient can visit specified ATMs, enter both the codes, mobile number and withdraw the transferred amount.
Remember, any variance in these sensitive details could lead to termination of the transaction -the funds will be credited back to the sender's account. Also, you should make sure that the recipient withdraws the money before the deadline specified (subsequent midnight to 14 days, depending on the bank).
Banks have set a limit of Rs 5,000-10,000 per transaction for the sender using this facility. The monthly cap for each recipient is Rs 25,000.You, as the sender, will have to pay charges of Rs 25 for every money transfer made.
Money transfer apart, you can make use of this facility for other purposes too, particularly when you are travelling. "The facility can be used by the account holder, both for self withdrawal in case of lost card, or for remittance to any beneficiary who may not be an account holder," says Ritesh Raj Saxena, EVP and head, direct banking and savings, IndusInd Bank. That is, if you add yourself as a beneficiary, you can use your mobile to initiate the transfer and withdraw money from the bank's designated ATM. The assumption here is that your mobile phone, with Internet access, is secure in your pocket. Ascertain the Reach
While the facility seems attractive and comes at very little cost, the only hitch is the limited reach -some banks allow cashless withdrawals at select ATMs, while others have a smaller network of ATMs. You need to enquire whether the facility is enabled only at selected ATMs -if the recipient does not live close to such an ATM, travelling to the location could be a hassle. In contrast, non-banking mobile payment entities have a wider network--of distributors and franchisees--though the charges could be higher depending on the issuer and amount transferred.
"However, mobile-enabled money transfers require bank accounts or wallets at both ends and do not facilitate instant cash out," says Anand. Lastly, you should be careful while sharing the code sent to you. Advise the recipient to carry out the transaction herself.Sharing the code with the security guards or others in the ATM can compromise the transaction.