MMID, IMPS and its rise and usage in India

There is a large percentage of Indian population which is indulged in day to day operations requiring check payment processing through their local banks. Operations at the banks come to a halt during weekends and during public holidays. Closure of banking operations affects the bank's customers who rely on daily transactions and processing of their payments.

In the late 90’s and early 00’s India saw an emergence of cards and ATM’s being set up. This certainly helped solve some cash flow problems. There was still a minor problem which has lived through the emergence of ATM’s i.e. the processing of Banks checks. Even today in some of the remote locations in India, banks take about 2 – 3 days time to process a check.

Recently one of the auditors that I work with introduced me to this new concept called IMPS using MMID (Mobile Money Identifier) and how this has solved the turnaround time of processing a check. Further research revealed that MMID acts as an identifier along with mobile number. The 7 digits of the MMID code, identifies the bank account of a user and the bank the user holds an account with. Through this identification process banks are able to cut down the processing time and transactions made through checks are faster.

According to data gathered from NPCI, Total Revenue through transaction of MMID’s for the month of July stood at 6,688 Million USD. The major contributor to the increase in revenue was rise in the Total number of transactions through Inter Bank. Issue of MMID’s and the number of banks have steadily increased since August 2012.


Source: National Payments Corporation of India

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As per our analysis the rise in the revenue recorded through total transactions is because of the increase in adoption of MMID’s for banking based transactions. The number of transactions is anticipated to go up in the upcoming months. Banks are realizing this trend and are lining up to introduce this service to their existing and future customers. Lack of awareness is still a major factor which is halting the exponential growth in the usage of MMID’s.

There are still untapped masses; people living in rural areas are playing catch up understanding new payment technologies. The population living in Rural India is not literate and there are chances that they may not understand what ATM’s or bank checks could do. SMS or Text based transactions can be introduced to ensure that even the illiterates are benefited from the usage of MMID service.

LTP View: Adoption of MMID’s can see an exponential hike through creating strong awareness channels. Just like how mobile payments were introduced in Kenya and Vodafone poured in advertising revenue to increase awareness. Banking corporations and Government of India needs to take such measures and back the usage of MMID’s throughout India.