New gateway will speed up payments for mutual funds, ULIPs

For prospective investors in mutual funds and ULIP making payments is now going to be a lot more convenient thanks to a new tie-up between Icra Onlie and an international agency Society for Worldwide Interbank Financial Tele-communication (SWIFT). The two are in talks to set up a new payment gateway in India that will allow users to make SMS payments instead of cheque payments.

The tie-up between credit rating agency Icra and SWIFT, will considerably speed up the turnaround between making payment and receiving units in hand.

Users will need to specify at the time of buying units whether they would make the payment through a cheque or by internet. Once the payment gateway is in place, customers can instruct the fund house to use the payment gateway route. At the same time, by way of confirmation of the purchase or sale order they would be required to intimate the gate company either through SMS or through email.

''This move will enable better fund management for asset management companies and also result in instant transfer of funds for customers,'' said Sanjoy Banerjee, executive director at Icra Online.

Icra's payment gateway service could face tough competition from both domestic and foreign banks as they already operate such services through the net banking route.

''However, we are looking at tier-II and tier-III cities where the mobile penetration is high and usage of internet banking is very low,'' said Banerjee.