In one more tale of high-technology being used to eliminate the middleman, Indian banks have begun directly connecting with overseas counterparts in the Asian region to help cut cash withdrawal costs for traveling clients.
In the process, they skip using international inter-change networks such as the ones run by Mastercard and Visa.
With increasing cross-border trade and travel in the Asian region, Indian banks have been bending backwards to help clients access their money from wherever they are.
Individual banks in various countries are increasingly connecting their domestic networks to reduce the transaction fee to be paid by the card holder.
If you are a Punjab National Bank client in India, for instance, and are travelling to Nepal, you will very soon be able to withdraw money from the ATM of any bank in Nepal at almost one-third the transaction fee charged by banks that use international inter-changes.
PNB has become the first bank to make a foray into cross-country ATM sharing agreement. Under this agreement, PNB’s 870 strong network of online ATMs can be used by cardholders of Nepali banks also. Similarly, card holders of the Indian bank shall be able to use ATMs of the participating banks in Nepal.
With this, PNB proposes to cut down the ATM transaction charges payable by its ATM-Debit cardholders to Rs 50 for cash withdrawals from their accounts from ATMs of participating banks in Nepal. At present, PNB’s debit card holders can use the ATMs of banks abroad having arrangement with MasterCard at a fee of Rs 150-Rs 160 for each cash withdrawal. Software solution providers are now assisting banks in different countries to connect their ATMs using domestic networks.
"We have an agreement with the Everest Bank that will do the reconciliation with 13 other banks in Nepal so that people travelling out of India get seamless access to their money at a lower transaction fee from any of these banks," says PNB’s General Manager, operations and payment settlement division, KS Bajwa.
FSSNeT, the outsourced services arm of Chennai-based local transaction switching vendor Financial Software Services (FSS), would enable interchange connectivity and ATM sharing services for the two partners.
"So far, transactions were routed through international interchanges using Visa or Mastercard networks. But with the use of domestic network facilitated by companies like ours on the Indian side and Smart Choice Technology on the Nepali side, consumers can save a lot of money," saiid Financial Software Solutions (P) Ltd’s head of consulting practice, GP Shekar.
"We are working towards extending similar agreements with other countries in the region including Singapore, Malaysia, Thailand, China, Australia, and Middle East. This will help us optimise our investment on infrastructure and also go a long way as a brand building exercise for PNB in other countries," adds Bajwa.
With this beginning made, more banks are likely to follow suit. "FSS has connectivity with 22 main banks in India. This connectivity can be used by any international bank to its advantage to reduce the transaction fee for cardholders," adds Shekar.
E-mail Prerna K Mishra: firstname.lastname@example.org