The days of toffees and mints as currency are about to end. Remember when you visited your local grocer, you paid with cash and got back candy as change Now, with just your cellphone in your hand, you can settle bill amounts cashlessly — even those awkward amounts ending in decimals.
This payment system, which we call a mobile wallet, allows you to electronically store cash in your account via a transfer from your bank account or credit card. From the wallet, you can make transactions and purchases easily, safely, and quickly.
How mobile wallet works There are quite a few mobile wallet providers in the market such as PayTM, Freecharge, Citrus Pay, mRupee, Mobiwik, Oxigen etc. While some wallets allow you to withdraw money from ATMs, transfer funds, make payment to merchants, and deposit balance funds back into your bank account, other wallets allow you only to use the application to spend money and transact with merchants.
To start using a mobile wallet, you can download the app of the opted service provider on your cellphone. The app will prompt you to create your ID using your phone number, email address and other personal details needed by the service provider. Once the ID is created, you can link it with your bank account, debit card or credit card to start storing currency in the mobile wallet.
Mobile wallets also give you the option of storing high cash volumes, but this needs you to meet KYC norms. For example, PayTM allows you to spend or store Rs. 10,000 ordinarily in a month as per RBI norms. You can upgrade the limit to Rs. 1 lakh by completing the KYC process.
Pros and cons The biggest advantage of the mobile wallet is its versatility. You can make retail transactions in seconds. The money is secure. You can pay bills without requesting for a one-time password (OTP), and there is no need to login to your bank account. You also get attractive discounts from merchants associated with mobile wallet providers. Paying utility bills like electricity, telephone, water and metro recharge can also be achieved with mobile wallets. They are easy to load by using online transfer, cash or debit card at retailers and also at designated offline loading points.
The downside of using a technology that is still young Perhaps your mobile wallet provider would not have tied up with the merchant where you shop the most. Similarly, you may have to maintain multiple wallets to get the most of the discounts and cashback on offer from your desired seller. Most popular wallets charge money for depositing the balance back from your wallet to the bank account. There is also the risk of malware stealing your wallet data.
Though it seems simple to use the wallet, the first-time users may better start transaction with a small amount.
Best way to use mobile wallets Make maximum use of mobile wallets for paying utility bills for electricity, DTH recharge, cellphone, telephone, internet, water etc. and get cashback offers to maximise your benefits. Keep a record of payments made through the mobile wallet every month to check unnecessary expenses. Avoid getting into a buying-spree. Avoid keeping large amounts in your wallet since you won’t earn interest on your balance.
Don’t use more than one or two mobile wallets since it will become difficult to track expenses and you may end up spending more than your desired limits. Always check wallet charges, offers, and facilities before selecting a mobile wallet. There are some wallet service providers that will forfeit the wallet balance if it is not used for the six months. So select your wallet after due diligence.
Changing how you spend money Mobile wallets have impacted the way people spend, share, and transfer money. It has made spending easier thereby making e-tail more accessible. Users also get offers such as cash-back and discounts for transacting by this mode. The wallets adhere to RBI guidelines; if you take due care of your login credentials, the chances of fraud are negligible. Transacting through your mobile wallets also does away with the need for revealing your bank or credit card details to merchants; therefore, keeping not just your bank data but also your cash secure. And unlike a normal wallet which can get snatched away or stolen, mobile phones and mobile wallets are ordinarily password-protected.
