The mobile wallet is the digital equivalent to the material wallet in which we carry money. It is an online platform allowing a user to deposit money in it, just like a bank account. A user needs to create an account with a mobile service provider. After which money is added to the mobile wallet account using a debit, credit, online transactions from the account, or via cash.
Difference between a mobile wallet and an online transaction
The main distinction between a mobile wallet and online transactions via bank account is that unlike banks, the mobile wallet does not charge any money on every transaction and saves the customer from the trouble of entering card details and PIN for each transaction. The mobile wallet is often confused with mobile banking but is a much broader concept that includes using the mobile phone as a mode of payment. It is the digital equivalent to the physical wallet we already have in our pockets today. Our mobile phones are with us on all occasions, and as we use them for payments to retailers, travelling on public transport and endless other things, the need for physical cash diminishes.
Mobile wallets in India
As per the Tech Science Research report, the mobile wallet market in India proposes to reach US 6.6 billion dollars by 2020. The mobile wallet market in India predicts an exponential growth on account of surging smartphone infiltration rate, growing mobile internet user support, and increasing government support. Besides, mobile wallet companies operating in India are also offering engaging deals and incentives to lure new users.
In recent years, wallet companies have increasingly formed collaborations with service providers and financial institutions to offer a robust and seamless mobile wallet platform to the users. Usage of the mobile wallet is expanding across various applications such as money or banking transactions, mobile recharge and bill payments, ticket bookings, utility applications, etc. Furthermore, approval of payment bank licenses of significant companies such as Paytm, Vodafone, Airtel, etc.; is forecasted to drive growth in the number of banking transactions through mobile wallets over the ensuing five years.
RBI’S initiatives towards mobile wallets
Mobile wallet is a virtual wallet service rendered by individual service providers, wherein people can load a specific amount of money to spend at any online and offline dealers listed with the mobile wallet service provider. Mobile wallet digital payment service works as a cashless payment service, wherein people do not have to pay cash or swipe their debit or credit card at offline merchants. One of the significant driving factors of the Indian mobile wallet market is the upward trend in the usage of mobile internet. This is primarily because the telecom operators have reduced their internet charges due to extensive competition and advancement of new technologies.
Four types of mobile wallets in India:
- Open wallet: It is the one that allows a user to buy goods and services, withdraw cash at ATMs or banks, and transfer funds. Only banks are authorized to launch these services. Additionally, it allows its users to send money to any mobile number bank account. Example: M-Pesa by Vodafone and ICICI and JETIRBP06099.
- Semi-open wallet: It is the one that allows its users to transact with merchants that have a contract with the semi wallet company. A user cannot withdraw cash or get it back; he will have to spend the amount he had loaded. Example: Airtel Money.
- Closed wallet: It is quite popular with eCommerce companies. Here, the merchant secures a certain amount of money in case of a cancellation or return of the order or gift cards. Example: Flipkart e-wallet.
- Semi-closed wallet: It does not permit cash withdrawal or redemption, but allows users to buy goods and services at the listed merchants. Example: Paytm.
- Airtel Money: With the Airtel Money app, users can instantly recharge prepaid accounts or pay postpaid bills. It also offers online shopping if the digital wallet has cash loaded in it. It is also extremely safe as every transaction or payment you make requires a secret 4-digit mPin.
- Freecharge: Freecharge, one of the most well-known names right now when it comes to digital payment in India, Freecharge targets the youth in all their promotions. With an equivalent amount of coupons given for every recharge you make, it is an excellent option to save while paying your bills online.
- JioMoney: JioMoney, launched recently in 2016 by Jio, is a digital payment app. With JioMoney, one can receive great discounts and offers. Users can also bookmark their frequently visited retailers, so shopping can be made quicker than usual.
- Juspay: JusPay Safe is a payment browser with over 650+ transactions in a day. They offer a browser with which users can make payments quickly via cards with two clicks.
- Mobikwik: Mobikwik is a Gurgaon based e-wallet payment system in India that helps its users store their money. Founded in 2009 by Bipin Singh and Upasana Taku, this digital wallet enables users to recharge, pay bills, and make third-party purchases with one tap.
- Paytm: Paytm, launched in 2010, is currently the largest mobile wallet app in India. With payments via Paytm being accepted almost everywhere; it is hard not to switch to it completely. From paying mobile bills to buying movie tickets, there is virtually nothing you can’t do BMwithPaytm.
Mobile wallet payment is a big platform for new technology that promotes financial institutions in India through mobile technology and also helps to increase their customers and its usage. The security issues are tightened and are reduced will automatically increase the adoption of a mobile wallet. Recently, everyone has a smartphone, but there is a need to create awareness and acceptance about the mobile wallet services which is comfortable, very secure, confidential, safe, and convenient without any efforts and interruption.