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Mobile phone as a local bank
By siliconindia
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Friday, 20 June 2008, 00:53 IST
Hyderabad: Researchers at NXP Semiconductor is working towards to transform people's life in rural areas by offering them access to services of banks and micro finance institutions, reported Business Line.
A wireless technology solution developed by researchers is tried as a pilot in Karimnagar district of Andhra Pradesh and several other parts of the country. The new project is now touching over half a million people across four States.
The project in partnership with SBI and seven other banks has the potential to bring about financial inclusion mandated by the Central Government and the Reserve Bank of India.
The SBI pilot was deployed in Karimnagar in AP, Pithorgarh in Uttarakhand and remote hilly tracts of Mizoram and Meghalaya. Union Bank, Axis Bank, PNB, SBH, Andhra Bank were among others partnering in the project.
How it works?
A bank representative with three devices, a mobile phone, a smart card reader and a finger-print reader, goes to a rural household and helps inmates transact.
All the information related to the account is stored in the mobile terminal. The user has a smart card that stores all his data and which serves as an ID card as well. The third device helps him access his account through finger-print recognition.
NXP's chip uses 'near-field communication (NFC)' technology. It allows each of the three devices to 'talk' to the other two. This helps exchange data between these devices as long as they are located near each other.
For example, if the account holder wants to deposit cash into his account, he hands over the cash to the bank representative. The banker uses the finger print reader to authenticate the account holder's identity. Followed by that, he enters details of the transaction in the mobile phone, which acts as a local bank branch. The smart card reader is then used to update the records in the card the account holder retains with himself � much like a bank passbook.Cash deposits, withdrawals, utility payments, money transfers and micro insurance are among the transactions that can be executed in this system.
This local bank solution was rolled out by NXP in partnership with A Little World, a provider of mobile platforms for inclusive banking.