The country was taken by surprise when the Prime Minister of India announced the permanent ban of old 500 and 1000 rupees notes on 8th November 2016. The step of demonetization was taken in order to curb the black money illegally circulating throughout the country. As the demonetization has come into effect, there has been a sudden rise in the use of mobile wallets. Until now, the citizens of India preferred cash-based transactions instead of using mobile or internet wallets. The sudden demonetization measures have forced the citizens to get accustomed to using mobile or e-wallets. Here’s a ready guide to understanding mobile wallets.
Mobile Wallet: What is it?
There are several companies that have launched mobile wallet services to smoothen up cashless transactions. Many companies and individuals are switching over to mobile payment space for paying and receiving payments.
Mobile wallets are basically mobile-based virtual wallets that allow you to preload the desired amount in the personal account that you have created with the mobile wallet service providers’ application and you can use it to pay for online or offline transactions. But while paying online or offline, you must check if the merchant you are willing to pay is listed in the mobile wallet, or else you cannot proceed with the payment. However, almost all major businesses are listed in the wallet as it has gained widespread acceptance in society.
- The customer can safely store their digital information, i.e. information of debit and credit cards in mobile wallets
- Loyalty cards, tickets, coupons, etc. can also be stored in your virtual wallet
- Specific information and personal identity are secured in mobile wallets
Mobile wallets can be categorized further, the types of mobile wallets available in India are as follows-
Open Wallet: These are wallets with which you can buy any goods and avail services, withdraw cash from your ATMs or banks, and transfer the amount to a third party. It allows you to transfer money to a mobile number bank account. M-Pesa by Vodafone is an amazing example of an open wallet.
Semi-Open Wallet: It also allows you to make transactions to those merchants who have agreed to a contract with Airtel. One very popular example of a semi-open wallet is Airtel Money.
Closed Wallet: It is popularly used by e-commerce companies. The brands issue it for allowing the consumers to make cashless transactions for buying items from the specific site or app only. Amazon, Flipkart, Jabong are some of the frequently used eCommerce sites which operate through closed wallets
Semi-Closed Wallet: One can withdraw or redeem any cash from semi-closed accounts. The credited amount can only be used for buying goods and services. Paytm is one semi-closed wallet.
There are plenty of secured mobile wallets that are available in the digital market.
Advantages of Mobile Wallets:
Mobile Wallets are replete with multiple benefits. Some of them include:
- Minimal chances of pickpocketing or misplacing of wallets. However, there are possibilities that your mobile can be stolen, but always remember to log out from the wallet after the transaction is done. All your personal information is secured in the mobile wallet unless it accidentally falls into wrong hands
- You do not have to waste your time by standing in long queues for withdrawing a certain amount of cash
- All payments are done just in a single tap after the verification is successfully executed
- You can make payments of complex numbers such as Rs.932.14 with your mobile wallet
- You will receive multiple rewards, cashback, and discounts once you start using mobile wallets. It saves a lot of money!
The majority of the Indian population, especially in rural areas, are trying hard to come to terms with some of the side-effects of demonization. As the cash withdrawal has been limited per person, people are switching over to cashless transactions by using mobile wallets.
This hassle-free method has saved the Indian Economy from falling down drastically, but there are many individuals who are still not clear about the use of mobile wallets. They would do well to update themselves with this simple concept and understand the nuances of mobile wallets, which saves time and energy for the individuals without compromising on security.