'Visiting' your bank with your own cellular phone

'Visiting' your bank with your own cellular phone

Jonminofri Nazir, Contributor, Jakarta

Every bit of news on Bank Central Asia (BCA) always draws
public attention. Not because of its political nuance, but more
due to the fact that many people depend on this bank. Just
imagine, no less than eight million Indonesians entrust this bank
to manage their money, be it in the form of their savings or
deposits, and almost all conduct their financial transactions
through its widespread Automated Teller Machines (ATMs).

On top of that, most companies, from the giant-sized to the
smallest, have accounts with this bank. So do their employees. At
the end of every month the financial departments of these
companies transfer employees' salaries through this bank.
Transfers take place only at BCA's computers, but the actual
money does not go anywhere, it remains in the bank's safe.

A BCA official said that according to a survey it was found
that almost the entire country's employees with salaries of Rp
500,000 and above keep their money in the bank's Tahapan savings
account.

Based on this fact, it is easy to understand why most cellular
operators are racing to work with this bank in the coordinating
mobile banking (M-banking) service.

"We will launch our mobile banking service by the end of the
third quarter," said Gede Krishna Jaya, the Mobile Data
Development Manager of PT Indosat-M3, who handles IM3's M-banking
products.

Telkomsel, another major cellular operator, has also informed
the media that it will soon start its joint venture with BCA for
its mobile banking service, which is planned this year.

So far, among the GSM-based cellular operators, only Satelindo
has not announced any similar plans, while PT Excelcomindo
(proXL) pioneered it long before any others, which means that
other operators can learn a lesson or two from this company's
past experiences or failures, should there be any.

Not only is it important for BCA and cellular operators, the
cooperation between both sides is actually major news for the
bank's customers.

The reason is that cellular operators can use this new service
to lure BCA's eight million customers to become their
subscribers. For BCA, the profits lie in the fact that when its
customers actively conduct transactions through M-banking it does
not have to add to its number of branches or ATM sites. The prime
convenience of M-Banking is that transactions can be conducted
from almost anywhere, even when one is in the bathroom.

Obviously, this concept greatly benefits BCA's customers who
happen to be GSM subscribers. Because a visit to the bank's
premises, queuing at ATMs or Internet banking at internet cafes
become unnecessary. This way customers can save their time, avoid
the heat of the sun and the parking fees at the bank's branches
or ATMs.

These are some of the reasons that make the cooperation of IM3
and Telkomsel with BCA welcome news for BCA's customers and GSM
cellular subscribers, as both can enjoy the convenience of
financial transactions conducted through m-banking.

What's next? The BCA mobile banking in partnership with proXL,
which was launched over a year ago, has greatly assisted BCA's
customers in their transfer of funds to others who also hold
accounts in the bank. Compared to Internet banking, mobile
banking is more secure. Though the proof of transfer is only a
Short Message Service (SMS), there have not yet been any
complaints of any loss of money from transactions conducted in
this way.

What customers do complain about, as far as readers' letters
in the media indicate, is that they still have to pay Rp 1,000
even if the transaction fails and Rp 2,000 for a successful
transaction.

The secure feeling provided by mobile banking is because the
entire network used for the transaction is a special network,
which means that it cannot be used by anyone else. Only the
cellular operator and the bank have access to the customer's
personal data. This is unlike the Internet, where a hacker can
slip into anyone's computer, wherever it is.

Albeit safe and secure, the use of mobile banking has not
boomed, as compared to the use of debit cards, because, until
now, mobile banking has not been able to be used for purchasing
or, to use the more sophisticated terminology, m-commerce.
Transactions on the cellular screen are limited to the services
provided by the bank's ATM or even less than that, because, of
course, one cannot make a cash withdrawal.

Viewing these current limitations, Novian Abdurahman, Gede
Krishna's colleague at IM3's Mobile Data Development, said that
this latest operator with the GSM 1800 system is planning further
steps in the mobile banking services by providing m-commerce.

Actually m-commerce is very much like e-commerce, or as it is
popularly called in Indonesia, "shopping on the Net". The
difference is that an e-commerce transaction is conducted through
the Internet network, which involves a bank, a credit card
company, a merchant, an Internet service provider and the
customer. In Indonesia this method of transaction is not very
secure as many crimes using stolen credit cards are known to have
frequently occurred.

M-commerce, on the other hand, has a shorter route as it
involves fewer parties; a bank where a customer has his savings,
a cellular operator, a merchant and the customer with his
cellular phone along with the GSM card.

In theory at least, this type of transaction has a higher
level of security, because only the owner of the cellular, who is
also the owner of the savings account, can carry out the
transaction. As long as the cellular is not lent to anyone and
the PIN number is kept secret, along with the bank account
number, an illegal transaction seems highly unlikely.

The cellular phone owner can use m-commerce for various
purchases as far as the merchant has a business agreement with
the bank. Dining in restaurants, buying a pair of shoes, a can of
Coca Cola or anything else is no problem as no cash is required.

IM3 has tried this facility without involving any bank in the
purchasing of soft drinks from vending machines. The method is
simple. Just enter the purchase code into the machine and in a
few seconds out comes the can of Coca Cola. The payment here is
deducted from the units in the user's cellular phone account.

However, according to Novian, the expansion of m-commerce has
become problematic as it does not involve a bank. The reason is
that in Indonesia it is not legally permitted to conduct any
financial transaction using units from cellular phone accounts.
According to the current law, such purchases must be paid with
cash in rupiah.

For IM3 providing m-commerce facilities is a must, because the
company's vision is to form a multi-media mobile community as
reflected in the company's name and one of the community's
characteristics is the application of m-commerce.

Apparently m-commerce cannot function without the support of
m-banking, because all financial transactions occur without the
physical presence of money. Customers' money move to the
merchants' pockets through a bank. This means that what really
happens is that only the records of money change, while the
actual money remains in the bank's safe.

With this reasoning it is understandable why IM3 not only puts
BCA on its list as its m-banking partner, but also the names of
several other large banks that can offer their large number of
customers. By involving a greater number of banks along with
their numerous merchants, IM3 ensures its subscribers more
flexibility and a wider choice in conducting their financial
transactions.

In line with IM3's aspirations to create a multi-media mobile
community, the application of m-banking is a must, because only
through this way can the cellular operator provide its
subscribers with m-commerce facilities.

Indeed, not every feature of m-commerce facilities can be used
immediately. As it is still at an early stage, IM3 can only
provide basic m-banking facilities, which will be followed by the
facilities for purchasing cellular account units. Only next year
will other m-commerce conveniences be enjoyed by both its
subscribers and the customers of the related banks.

By providing m-banking, IM3 will be able to fully realize its
dream of creating a multi-media mobile community.