PROSPECTIVE mutual fund and ULIP investors can now use the standard messaging service or SMS to make payments, rather than issuing cheques, while buying units. Icra Online has entered into a strategic tie-up with an international agency for setting up a new payment gateway in India.
Credit rating agency Icra’s tie-up with SWIFT, or Society for Worldwide Interbank Financial Telecommunication, is aimed at bringing down the turnaround time between making payment and receiving units in hand.
When an individual buys units of a mutual fund, he has a choice to make the payment through a cheque or by internet. Once this payment gateway is in place, the customer can instruct the fund house to use the payment gateway route. At the same time, he will be required to confirm the purchase or sale order to this payment gate company either through SMS or through email.
“This move will enable better fund management for asset management companies and also result in instant transfer of funds for customers,” said Sanjoy Banerjee, executive director at Icra Online.
Icra’s payment gateway
service could face stiff competition from private and foreign banks as they already provide customers the option to make their payment through the net banking route. “However, we are looking at tier-II and tier-III cities where the mobile penetration is high and usage of internet banking is very low,” said Mr Banerjee.
SBI Asset Management — the mutual fund arm of SBI — recently enabled its customers to make their payment through State Bank of India’ ATM debit card.
“The service will be available from the fourth quarter of 2010-11,” said Arun Tiwari, head of Indian-sub-continent at Swift. Icra Online and Swift will have to tie up with fund houses for offering this service. The Belgium-based Swift provides financial messaging network and facilitates transfer of funds between Indian and overseas banks.