SMS banking’ is a form of mobile banking. It is a facility used by some banks or other financial institutions to send messages (also called notifications or alerts) to customers’ mobile phones using SMS messaging, or a service provided by them which enables customers to perform some financial transactions using SMS.
Push and pull messages
SMS banking services may use either push and pull messages. Push messages are those that a bank sends out to a customer’s mobile phone, without the customer initiating a request for the information. Typically, a push message could be a mobile marketing message or an alert of an event which happens in the customer’s bank account, such as a large withdrawal of funds from an ATM or a large payment involving the customer’s credit card, etc. It may also be an alert that some payment is due, or that an e-statement is ready to be downloaded.
Another type of push message is one-time password (OTPs). OTPs are the latest tool used by financial institutions to combat cyber fraud. Instead of relying on traditional memorized passwords, OTPs are sent to a customer’s mobile phone via SMS, who are required to repeat the OTP to complete transactions using online or mobile banking. The OTP is valid for a relatively short period and expires once it has been used.
Bank customers can select the type of activities for which they wish to receive an alert. The selection can be done either using internet banking or by phone.
Pull messages are initiated by the customer, using a mobile phone, for obtaining information or performing a transaction in the bank account. Examples of pull messages include an account balance enquiry, or requests for current information like currency exchange rates and deposit interest rates, as published and updated by the bank.
Typical push and pull services offered
Depending on the selected extent of SMS banking transactions offered by the bank, a customer can be authorized to carry out either non-financial transactions, or both and financial and non-financial transactions. SMS banking solutions offer customers a range of functionality, classified by push and pull services as outlined below.
Typical push services would include:
- periodic account balance reporting (say at the end of month);
- reporting of salary and other credits to the bank account;
- successful or un-successful execution of a standing order;
- successful payment of a cheque issued on the account;
- insufficient funds;
- large value withdrawals on an account;
- large value withdrawals on the ATM or EFTPOS on a debit card;
- large value payment on a credit card or out of country activity on a credit card.
- one-time password and authentication
- an alert that some payment is due
- an alert that an e-statement is ready to be downloaded.
Typical pull services would include:
- Account balance enquiry;
- Mini statement request;
- Electronic bill payment;
- Transfers between customer’s own accounts, like moving money from a savings account to a current account to fund a cheque;
- Stop payment instruction on a cheque;
- Requesting for an ATM card or credit card to be suspended;
- De-activating a credit or debit card when it is lost or the PIN is known to be compromised;
- Foreign currency exchange rates enquiry;
- Fixed deposit interest rates enquiry.
