Indian fintech companies, including Paytm and Google Pay, have filed a plea with the Centre to consider in-app alerts as an alternative to the mandated SMS notifications for banking transactions, quoting multiple sources ET reported on Thursday.
In their petition, the fintech firms cited higher SMS costs as well as security concerns as triggers behind the move. The fintech industry has also proposed that users can be given the option of choosing both or either options for a smooth transition.
According to the report, Nasscom on May 30 has requested the Reserve Bank of India (RBI) to consider allowing app-based notifications for banking transactions.
The RBI guidelines say that currently the banks should send only SMS alerts to customers for each transaction with the cost borne by the RBI-regulated entities that includes all banks and financial services companies.
The industry body in its representation to the RBI mentioned that the SMS charges are estimated at Rs 0.12 per message, while the cost of an ‘In-App notification’ is pegged at Rs 0.001.
Nasscom said that India registered digital payment transactions worth Rs 8,734 crore in FY22, while the cost of SMS-based notifications would therefore have added up to about Rs 1,048 crore. On the other hand, in-app notifications would have cost Rs 8.8 crore, the fintech association said.
Ashish Aggarwal, Nasscom’s public policy vice-president said, “The intent of RBI is to ensure that a consumer is aware of activities in her transaction account. Focus of a regulation should be to enable secure and efficient access to information instead of limiting the method of information transmission or storage.”
Nasscom has also said that customers be given an option to choose either or both SMS and ‘In-App notifications’ initially for a transaction amounting up to Rs 10,000. Any transaction higher that Rs 10,000, SMS and ‘In-App notifications’ could be mandatory and the thresholds could be increased, the association stated.
A report by National Payments Council of India (NPCI) mentioned about 87 per cent of households received SMS alerts from banks in 2020.