E-Wallets..Dawn of New Age..!!

A 21-year-old University student from Mumbai ends up in a tough spot after he forgets his wallet at home. After getting down at the station, he has to reach his hostel at the earliest, but doesn’t have the cash or cards to do so. Enter Meru Cabs’ ‘cab wallet’. All he does is tap his mobile app and, voila, the payment is made. “Not only did he reach his hostel safely, but also got a 30% discount''

Several companies, especially those in the e-commerce and telecommunication services sector, have come out with digital wallets to help consumers. All one needs to do is preload money and you can use it to pay for services. If a recent Reserve Bank of India directive is to go by, these digital wallets can soon apply to become ‘payment banks’, financial institutions aimed at “furthering financial inclusion”.

TYPES OF E-WALLETS

In general, as per the RBI, there are three kinds of e-wallets—closed, semi-closed and open

• Closed wallet: A closed wallet is one that a company issues to its consumers for in-house goods and services only. These instruments do not carry the advantage of cash withdrawal or redemption. Several online shopping portals such as Flipkart, Jabong and MakeMyTrip offer such closed wallets. It is basically an account where money gets credited in case of a refund due to cancellation or return.

• Semi-closed wallet: In the payments space, companies such as Airtelmoney,  MobiKwik, PayU and Paytm offer semi-closed wallets. As per the RBI, a semi-closed wallet can be used for goods and services, including financial services, at select merchant locations or establishments that have a contract with the issuing company to accept these payment instruments. ‘Semi-closed wallets do not permit cash withdrawal or redemption by the holder as well’.

• Open wallet: Such wallets can be used for purchase of goods and services, including financial services such as funds transfer at point-of-sale terminals that accept cards, and also cash withdrawals at automated teller machines or business correspondents. These kinds of wallets can only be issued by banks. An example of an open wallet is M-Pesa by Vodafone in partnership with ICICI Bank.

WHO SHOULD USE THIS MONEY

• Since 'Mobile money transfers' are costlier than NEFT (National Electronic Funds Transfer) or IMPS (Immediate Payment Service), therefore ff you use Net banking or make online payments through credit or debit cards, you need not switch to mobile money transfer services like Airtel Money or Vodafone M-Pesa. 

• This facility is useful only for those who don’t have a bank account, don’t use net banking, don’t possess a credit card or don’t prefer making online card payments.

CHARGE SHEET

• There are several charges involved in mobile money and these charges are generally higher than in banking transactions. For example, the registration fee for Airtel Money is R50. The cash-loading charges as shown in picture below.

• Similarly, the charges for money transfer between Airtel Money and a bank account are nil (Rs 10-50), Rs 15 (Rs 51-Rs 1, 000), R35 (Rs 1, 001–Rs 3,000) and Rs 50 (Rs 3,001–R5,000).

ADVANTAGES:

• Discounts while shopping online

• You tend to get several offers through these platforms. For instance, you can get 37% off on shopping for Rs 1,500 from Myntra using Airtel Money. 

• A mobile recharge on Airtel through Airtel Money can give you more talk time.

• Unique Technology

• As they work on USSD (Unstructured Supplementary Service Data) technology, you can communicate with the service provider’s computer without even Internet.