It’s a mobile phone-based card acceptance service through which you can use your credit card to buy stuff and pay through the vendor’s mobile phone.
This can be done by attaching a special card reader, called Mswipe, to the phone. The service has been launched by Axis Bank Ltd with Prizm Payments Services Pvt. Ltd, a financial services provider focusing on innovative payment services through electronic channels and Mswipe Technologies, the company which has developed this mobile card reader.
How does the process work?
If you pay through this, your card will be swiped through a machine attached to the audio output slot in a mobile phone and the transaction will go through just as it does at any other point of sale (PoS) terminal in a shop. You can choose to receive an instant intimation of the transaction either on your mobile phone via an SMS or via email.
What it means for vendors?
The service provides vendors a swipe-on kit that has a Nokia phone, relevant data plan loaded on it and the swipe machine. Vendors can also buy the machine separately.
Other than the cost of the kit or the machine, the vendor has to pay a negotiated fee to Axis Bank which is similar to what they pay for using a PoS machine in a shop. This kind of facility is useful for vendors who want to discourage the use of cash; for example, in the case of home delivery of valuable items.
What it means for you?
The objective of such a service is to minimize the need to transact in cash. So if you forget to carry cash on a particular day, you can still pay for a taxi if the driver has this facility on his or her phone. As of now it is available only for cards with a magnetic strip and not for the new chip-based cards. Nevertheless, it will make life simpler for you as the need to go to the bank or the ATM to withdraw money would be lower. But how much this becomes a part of your life depends on how easy and profitable the sellers and service providers find this facility. Also, right now only one bank has launched it; only once all major banks have this facility will it make a bigger impact on making your transactions cashless.
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