Payments

MMID, IMPS and its rise and usage in India

MEDICIFounder and Chief Strategy & Innovation Officer

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.

Rise of MMID's

IMPS Statistics

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.

Amit Goel

MEDICIFounder and Chief Strategy & Innovation Officer

“Amit Goel is the Founder & Chief Strategy & Innovation Officer for MEDICI. Amit’s vision is to build a strong FinTech market network that involves financial institutions, banks, startups, investors, analysts & other key stakeholders across the ecosystem – helping each one of them in a meaningful way by removing the asymmetry of information and providing a platform to engage & transact.\ \ Amit is passionate about bringing actionable FinTech-focused insights, innovative products & services for the FinTech ecosystem. Some of his work involves startup scores, bank scores/assessments, predictive viewpoints & other innovations that have helped MEDICI’s customers and the ecosystem. He has been named amongst the Top 100 FinTech thought leaders/influencers in the world & Top 10 in Asia multiple times by reputed agencies, consulting firms as well as financial institutions. Amit has built MEDICI (formerly LTP) as a new-age, tech-enabled advisory/research firm, which is now considered the #1 global research & innovation platform for FinTech in the world.\ \ Amit has been writing pioneering viewpoints on financial technology space that have been ahead of the curve since 2010. His data-driven predictions have helped the customers as well as the ecosystem. His past work experience includes a strong background in strategy & market analysis and advisory to clients (from big business houses to Fortune 500 firms) in payments, commerce, financial services & IT/technology. In the past, Amit had also founded a successful consulting & research practice called GrowthPraxis and has worked at Boston Analytics, Frost & Sullivan, and Daimler Chrysler in strategy & research.”