• Function Of Digital Wallets
• E - Wallet Example
• Digital Wallet India
Digital Wallet or E- Wallet or Virtual wallet
Digital wallet is a software application, usually for a smartphone, that serves as an electronic version of a physical wallet.
Cash went out of fashion ahes ago and instead of having to rely on a credit or debit card companies now want you to pay for just about everything using a virtual wallet. After facing regulatory troubles Uber India has now tied up with paytm to handle its cashless payments while others like Ola have chosen to launch wallet systems of their own.
The basic concept is really simple - a virtual wallet just serves as a place to hold of your money online. You make payments using the money stored in your wallet instead of using a credit card, debit card or net banking, which means your bank account doesn't need to be accessed. Of course, adding money to the wallet still requires you to use one of those methods.
Once you stored the money in wallet you can use it to make payment to the wallet provider or to third party services depending on the type of wallet you've signed up for. Most services also come with a mobile app so you can easily check your balance and make purchases. Some wallets services such as Paytm are built around their own stores where you can buy goods, and some let you buy recharge for your phone or pay your DTH bill. You can also use these wallets to make payments at others websites- Foe Example BookMyshow and JustEat.in both support Paytm.
Why would you want to do this ?
The Biggest result is probably ease of use something that is particularly true for mobile users. Unless the site you want to make a payment on lets you save your credit or debit card details, you're going to have to spend a fair bit of time typing them in every time you need to make a payment.
Add to that the fact that the RBI has decided that all transactions need to be secured by a second verification code or one-time-password, and the process of paying online using your credit or debit card become extremely cumbersome. Paying with a wallet can also be safar the wlet itself might not be required to have the same level of security as your credit card but since your bank account isn't touched amount of harm that's possible if the seller is compromised, is limited.
That's beacuse mobile wallets in India are limited to a maximum account to have of Rs. 10,000 and are typically expected to be used for small payments. Therefore wallets are not subject to the same security restrictions. This means that you can use one of these wallets services to quickly and conveniently make payment from your mobile phone after loading it with cash when you have free time you could even do this from your computer where entering all the bank details is easier.
And since the concept of a mobile wallet is still pretty new in India almost all the companies that offer them are also offering deals discounts and free top ups.
Ola Launched its wallet with an offer to dubble the money you stored in it and Paytm has regular discounts on products, offered as credit added to your wallet that can be used to shop some more.
Not everyone is convinced that this concept is going to succeed universally through For Example- Zomato is planning in bringing payments to its app soon it is not looking at a wallet as a solution. Wallets work when the spend is low and a one - time significantly low value recharge can work for multiple uses.
There are two main types of virtual wallets right now the single purpose closed wallets and the more versatile semi closed wallet which is growing in popularity now.
Closed:
A closed wallets is one where the flow of money is one directional. You can put your money into the wallet but can't leter withdraw it. A closed wallet can't be used for making payments to third parties it is in effect a prepaid card for these different services. Paying with a closed wallet is usually automatically like a pre paid card your balance gets deducted as you use the service.
So for example- Ola has a closed wallet for its taxis, and the money that you put into the service can only be used to pay for those taxis. It will never expire, though and since Ola controls the wallet it can give you loyalty rewards and discounts with ease.
Semi-closed:
A semi-closed wallet lets you take money out of it and put it back into your bank account. This means that you have full control over your money and it can be used to pay for wide range of services. Some well-known ones are Paytm Oxigen and Mobikwik. These are much more flexible then fully closed wallets but also come under far more oversight from the RBI. The concept os quickly gaining in popularity though. Paytm launched in January 2014 and is now being used for over 8 lakh orders par day
Mobile app has veen downloaded by 12 million people and Paytm has total of 22 million members now.
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