Pay Premium via Mobile Phones
By Pankaj Maru
Mumbai, May 30, 2008

In a bid to build a strategic business, Max New York Insurance, a private sector enterprise with over 2.4 million policy holders and about 38,500 advisory agents spread across India has gone a step ahead to offer value added services backed by innovative service.

Recently, it has initiated a unique premium payment solution via cell phones for its policy holders. The solution uses mChek's mobile application for security and authentication of transactions, while Citibank's cash management service is responsible for the settlement issues.

Along with premium payments, the solution enables policyholders to subscribe and top-up investments in ULIPs (Unique Link Insurance Policies) and links the charges to their preferred bank account or credit card.

According to Sanjeev Mago, executive vice president (customer operations and service delivery) of Max New York Insurance, as business grows, the importance of value added services become critical in the efficient handling of customer relationships.

"We now have sold over 2.4 million policies on its books and have always endeavored to achieve greater height keeping in mind the quality of advice and service. Ensuring smooth process flow of approvals, payments and claims has contributed significantly in creating a customer centric environment and reduced time to serve our customers," says Mago.

"The mobile payment uses mChek's PIN (a 6 digit customer identification number) and 3DES (triple Data Encryption Standard) for validating and authorizing every transaction and, managing any sensitive data like card numbers, mini statements etc," explains Sanjay Swamy, CEO of mCheck.

3DES is the encryption standard defined in ANSI X9.52 (American National Standards Institute) and is widely used by payment networks around the world. "mChek uses the same proven standard for protecting all sensitive data. All the data transmitted between the mChek application on the customers mobile and the mChek server is encrypted using 3DES," adds Swamy.

How the transaction works

First, mChek collects customer's details (credit card / debit card / bank account) on their mobile phones and allows authorize transactions using the mChek PIN.

Also, the transaction can be initiated from any e-commerce site (makemytrip, bookmyshow, futurebazaar, etc.) or by a call center or by a physical merchant (any restaurant / super market) after the customer buys / configures his order. Then, the transaction details are sent to mChek backend by the merchant and mChek sends an authorization request to the customer on his mobile phone.

Once the customer authorizes the transaction by entering his mChek PIN, the payment is deducted from his credit card / debit card / bank account and then credited to the merchants' credit card account. And finally, a notification is sent to the customer and the merchant on completion of transaction.

This new payment service is available freely across India to the all the customers of Max New York Insurance. Further Mago adds, "Due to payments delays, many policies lapse or policyholders have to pay additional charges for policy revival. This new service is an attempt at streamlining timely payments by policyholders to ensure they remain financially protected throughout the term of the policy."

While, mChek assures the security and authentication of transactions with its mobile application, Citibank handles the financial settlements of the payments and transactions.

The financial settlement is done by debiting the user's bank account through ECS (Electronic Cash Service) or bilateral arrangements with partner banks.

"Citi has assessed and defined the technical standards of security for this channel. Citi has audited the mChek system extensively to ensure end to end compliance with its own standards," says Ashish Bajaj, managing director of Citibank Global Transaction Services (India subcontinent).

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