SMS Banking

SMS banking is a form of mobile banking. It is a facility used by some banks or other financial institutions to send messages (also called notifications or alerts) to customers' mobile phones using SMS messaging, or a service provided by them which enables customers to perform some financial transactions using SMS.

SMS banking services may use either push and pull messages. Push messages are those that a bank sends out to a customer's mobile phone, without the customer initiating a request for the information. Typically, a push message could be a mobile marketing message or an alert of an event which happens in the customer's bank account, such as a large withdrawal of funds from an ATM or a large payment involving the customer's credit card, etc. It may also be an alert that some payment is due, or that an e-statement is ready to be downloaded.

Another type of push message is one-time password (OTPs). OTPs are the latest tool used by financial institutions to combat cyber fraud. Instead of relying on traditional memorized passwords, OTPs are sent to a customer's mobile phone via SMS, who are required to repeat the OTP to complete transactions using online or mobile banking. The OTP is valid for a relatively short period and expires once it has been used.

Bank customers can select the type of activities for which they wish to receive an alert. The selection can be done either using internet banking or by phone.

Pull messages are initiated by the customer, using a mobile phone, for obtaining information or performing a transaction in the bank account. Examples of pull messages include an account balance enquiry, or requests for current information like currency exchange rates and deposit interest rates, as published and updated by the bank.

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