e-wallets have become immensely popular with people after the demonetisation drive in 2016. The increasing use of smartphones and internet has boosted the use of digital payments. With the rising popularity of online shopping due to huge discounts and attractive offers, e-wallets have emerged as a convenient option for shopping from office, home and any other remote location. It is thus a preferred mode of payment for many consumers. It not only reduces your dependency on cash and cards, but also provides you with a safe and secured option for big and small transactions.
A digital wallet is a virtual wallet in which you can pre-load any amount of cash to use for transactions with merchants that support this. You can store cash in your digital wallet like you save in your bank account.
Type Of e-wallets
There are generally three types of e-wallets as approved by the RBI.
Closed: As the name suggests, it has restrictive functions as it allows transactions or buying goods and services with particular service providers only and do not permit cash withdrawals.
Semi-closed: You can use this e-wallet to buy goods and services at specified establishments. It does not permit cash withdrawals.
Open: These are similar to semi-closed e-wallet in terms of features, but they come with an advantage of allowing cash withdrawals too.
Security features in e-wallets
These applications are secured yet convenient to use. You can use an e-wallets by just logging into your digital wallet account. As mentioned earlier, you have to pre-load the wallet with some amount for making payment. It doesn’t require card details or PIN numbers for every transaction and is safe to use. Here are some pointers on its safety features
- Heavy encryption and secured networks make your personal and financial data safe in the e-wallet
- Phone lock and one-time password (OTP) make e-wallets extremely secure to use. Some providers use a biometric verification, which makes it triple safe.
- If you lose your phone, you can even delete the wallet data for e-wallets that come with provisions for it.
This digital mode of payment has made financial transactions easier, faster and cost-effective. As a consumer, you don’t need to carry cash at all if you are using e-wallet as it has now become the preferred mode of payment for everyone, especially among the millennials.
Digital payments come with cashback offers, coupons and gift cards. You can also make inter-bank transfer using e-wallets and multiple accounts simultaneously.
When it comes to e-wallets, you usually associate it with smartphones as you pay through mobile apps or by logging on to these apps through laptops, desktops or tablets. But now you can also access these e-wallets through wearable devices such as a wristband. A prominent fitness tracker company recently acquired a wearable payment platform to enable e-wallet use through a wearable device, and pay anytime and anywhere.
More than just transfer money
Most of the consumers are of the notion that e-wallets are meant to transfer money to buy and sell goods and services only. But it is more than that. It has advanced services such as:
- You can book flight, movie tickets and even concert passes with e-wallet.
- You can pay your utility bills with e-wallets.
- You can earn cashback, coupons, reward points on e-wallets and use them in return to pay for other goods and services.
- You can store your payment information, debt and loyalty cards as well.
In short, e-wallets can just be the alternative to using cash or plastic money, which can be easily lost and stolen.
(The writer is CEO, BankBazaar.com)