Mobile phone can soon be used, not only to order for your favourite pizza or to book a movie ticket but also to make payments for the services availed. Interbank Mobile Payment Service (IMPS), which is now being used only to transfer funds from one bank account to another through the mobile phone, will be extended to include merchant transactions also from next month.

National Payments Corporation of India (NPCI), which has developed IMPS is at present testing the possibility of using the service for merchant transactions too. It has received permission from the RBI to also extend the service for the payment of utility bills, fees, donations and also for routing of transactions initiated through ATM and internet channel through IMPS platform.

“We have been conducting pilot studies with select bankers and merchants. We hope to roll out the service in October through all our 28 member banks,” said M Balakrishnan, chief operating officer, NPCI.

NPCI is also working out the possibilities of providing remittance services through IMPS, which will do away with the requirement of the receiver to register for the service.

Almost all the leading banks in India, including SBI, ICICI Bank, HDFC Bank, Punjab National Bank and Citibank, are members of the IMPS and offer money transfer service through mobile phones to their account holders.

The IMPS service helps users to transfer funds simply through an SMS, enabling owners of even basic cellphones to transfer funds. The mobile number of the user would be linked to his bank account number and his unique mobile money identifier (MMID), which would help identify the sender and the receiver of the funds. NPCI has issued over 14 million MMIDs through its 28 member banks.

Since the launch of the IMPS service in August 2010, the volume and value of funds transferred through the channel has been growing significantly. For the month of August 2011, about 10,000 transactions, amounting to Rs 2.90 crore took place through IMPS, compared to 8,900 transcations involving funds worth Rs 2.49 crore that took place in July 2011.