<p>Major fintech companies, including the likes of GooglePay and Paytm, have requested the government to consider in-app notifications over mandatory SMS notifications for bank transactions, citing security risks and higher costs borne by the industry.</p>.<p>The National Association of Software and Service Companies (NASSCOM) sent a representation on May 30 urging the Reserve Bank of India (RBI to allow app-based notifications for banking transactions. As per RBI norms, it is mandatory for banks to send only SMS alerts for the banking transactions, the cost of which is borne by the RBI-regulated entities including banks and financial services firms.</p>.<p>The industry representation flagged to RBI that each SMS incurs a cost Rs. 0.12 against Rs. 0.001 for in-app notification, the ET report stated. Google, Paytm and RBI didn't respond to ET's queries.</p>.<p>The lobby added for a total transaction of Rs 8,734 crore in FY22, the SMS-alert cost added Rs 1,048 crore approximately. In comparison, the bill would have been just Rs 8.8 crore if the in-app notifications option would have been in place, the group said. The body also suggested a two-tier alert system for transactions below and above Rs 10,000. It said, customers can be given an option to choose either, or both SMS and as in-app notifications, initially for transactions valued up to Rs 10, 000. For transactions above Rs 10,000, the lobby suggested mandating both SMS and in-app notifications.</p>.<p>The lobby also asserted that such provisions will reduce the chances of fraud through SMS. Besides in-app notifications eliminate third parties as they are direct communication channel between the customer and the bank. “The intent of RBI is to ensure that a consumer is aware of activities in her transaction account. The 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's public policy vice president Ashish Aggarwal told ET.</p>
<p>Major fintech companies, including the likes of GooglePay and Paytm, have requested the government to consider in-app notifications over mandatory SMS notifications for bank transactions, citing security risks and higher costs borne by the industry.</p>.<p>The National Association of Software and Service Companies (NASSCOM) sent a representation on May 30 urging the Reserve Bank of India (RBI to allow app-based notifications for banking transactions. As per RBI norms, it is mandatory for banks to send only SMS alerts for the banking transactions, the cost of which is borne by the RBI-regulated entities including banks and financial services firms.</p>.<p>The industry representation flagged to RBI that each SMS incurs a cost Rs. 0.12 against Rs. 0.001 for in-app notification, the ET report stated. Google, Paytm and RBI didn't respond to ET's queries.</p>.<p>The lobby added for a total transaction of Rs 8,734 crore in FY22, the SMS-alert cost added Rs 1,048 crore approximately. In comparison, the bill would have been just Rs 8.8 crore if the in-app notifications option would have been in place, the group said. The body also suggested a two-tier alert system for transactions below and above Rs 10,000. It said, customers can be given an option to choose either, or both SMS and as in-app notifications, initially for transactions valued up to Rs 10, 000. For transactions above Rs 10,000, the lobby suggested mandating both SMS and in-app notifications.</p>.<p>The lobby also asserted that such provisions will reduce the chances of fraud through SMS. Besides in-app notifications eliminate third parties as they are direct communication channel between the customer and the bank. “The intent of RBI is to ensure that a consumer is aware of activities in her transaction account. The 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's public policy vice president Ashish Aggarwal told ET.</p>
