SMS is the shorter term for Short Message Service used by many mobile telephone service providers. Similarly, SMS banking is defined as banking transactions carried out using SMS message service.
In order to use SMS banking services with any bank, initially you need to have a mobile telephone number and a valid SIM card from a mobile telephone service provider. Then these mobile phone details have to be registered with your bank which provides the SMS banking services. Once your mobile phone details are successfully registered with the bank, you can send and receive funds via your handheld mobile phone or device.
It is important to note that your bank will provide you a password protected SMS banking account to ensure your secured SMS banking. The bank will charge a small monthly fee for using this SMS banking services in addition to commission charge per transaction.
SMS banking is now a popular means of money transaction globally. Particularly, it is well accepted among many developing nations such as India, China, Kenya, and Indonesia where access to conventional banking is difficult for people living in rural areas. SMS banking has many advantages and can be used via mobile device to pay bills, send and receive money electronically, deposit money into your account, and pay for goods and services. Like many other online banking services, SMS banking money transactions are carried out electronically. Many who uses SMS banking believes it's secured, simple and quick. Especially, it is the best in handling simple day to day banking transactions which you don't need to visit the bank always.
If you need to cash instantly using SMS banking, you just have to visit a suitable service provider who will help you to withdraw cash from your electronic account. Most of these service providers are either well established banking services or online payment services provided by money transfer companies located worldwide. Alternatively, you can withdraw cash via SMS banking system using your debit card (linked to your electronic account) at a bank teller machine.
In many countries mobile banking or SMS banking is referred as m-banking. SMS banking is usually cheaper than other conventional and online banking services as low transaction fees are charged to the customer. Some SMS banking services do not charge any commissions for receiving money. SMS banking transactions using password protected electronic account proved to be a highly secured and free of theft. There are customers who think saving money electronically is better than saving money physically. Hence, all depends on the customer's preference and expectations.
Research carried out in many developing countries like Kenya, India, Indonesia and Bangladesh shows that SMS banking has enabled to integrate the rural communities to these countries' economy. More importantly, SMS banking has become a very popular transaction method for rural people who never had any opportunity to access well established banking system in those countries. Available statistics indicate the rising market for SMS banking is India, Bangladesh, Kenya and many more, where most of the rural population uses some form of SMS banking. The reason for this current trend is on the one hand is due to rapid economic growth in the developing countries and on the other is due to repaid development mobile technology as well as increasing ownership of affordable mobile handsets. The other benefit these countries have experienced is the reduced travel time so time saved could be used for productive use in those countries.
In view of the above SMS banking will come to stay in many developing countries. It will become one of the popular online transaction methods among many people.
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