Business-consumer relationship has been becoming increasingly digital in this era of tech-savvy people. Eventually, mobile wallets have become common payment platforms. The need of the hour is to understand mobile wallets as mainstream payment methods. To learn everything about mobile wallets and the way they work, read through this Arthayantra post.
What is a Mobile Wallet?
A mobile wallet is a virtual wallet designed to store payment card information on a mobile device. It is a convenient way to make in-store payments to the merchants listed with the service provider.
For example, if you go to a coffee shop, which is listed with your mobile wallet service provider, you can make payment through your mobile. Using mobile wallets, you can make most transactions from utility payments to offline payments.
Types of Mobile Wallets in India
Four types of mobile wallets are available in India including semi-open, open, closed, and semi-closed.
Open wallets – Allows buying goods and services, transfer funds, withdraw cash at banks or ATMS. Services are launched in conjunction with the banks. Eg: M-Pesa
Semi-open wallet – Allows transactions with merchants that have a contract with the same service provider. Spend the amount you load, as you cannot withdraw the cash back. Eg: Airtel money
Closed accounts – Popular with e-commerce companies. Some amount gets locked with the merchant in case of return of the orders or cancellation or gift cards.
Semi-closed wallets – Do not permit redemption or cash withdrawal. You can buy goods and services at listed merchants. You may also perform fund transfers. Eg: PayTM
How Does Mobile Wallet Work?
Simple steps are involved in the usage of mobile wallets.
- Download the mobile wallet app. Some devices have inbuilt apps too.
- Add your credit or debit card info to open the wallet.
- When buying online, check out and access wallet and make the bill payment.
Are Mobile Wallets Safe?
Reserve Bank of India has set certain guidelines for mobile based payments, considering customer’s interests. Usually, when you register with the service provider, an escrow account is created. Your amount gets deposited in this account when you pre-load the money. Only at the time of payment, the bill amount gets credited to the service account and is then transferred to the merchant, thus keeping your money safe.
Not all mobile wallets need to open the escrow account. So, ensure if the service provider opens an escrow account, before registering. Keep your money safe.
Benefits of Using Mobile Wallet
- Your mobile wallet can neither be misplaced, snatched, or pickpocketed.
- You do not have to worry about the change. Just pay the exact bill amount.
- Unlike net banking services, mobile wallets allow payments in one go.
- Many wallets offer discounts and rewards.
- Mode of payment does not involve the entry of card info at the merchant’s site.
Tips to Use Mobile Wallet Wisely
Now that you learned the basics about mobile wallets, get a few tips to use them wisely.
Lock your phone: Ensure that your phone is always locked for the safety of the money in your wallet. Choose your default credit or debit card wisely. Keep a track on your balance if you used your debit card.
Choose the best service: Associate with well-established mobile wallet service provider. Select wisely. Check for the vendors associated with the service provider. Choose the one that best suits your needs.
Link to right apps: Link your mobile wallet to the right apps, instead of linking it to every app. Check for the trustworthy apps before you connect your wallet.
Track your spends: Avoid overspending. Just because of the simpler process or due to tempting deals, do not spend on unnecessary things. Adhere to your monthly budget.
In a nutshell, your mobile wallet helps simplify your daily expenses in a wise way to manage personal finance. But make sure that you use it only for necessities. Remember that every single financial decision you make would show an impact on your long-term financial goals. Increase your savings by 25% by reducing your non-committed expenses. Save towards accomplishing your goals.
Make life easy, yet value your hard-earned income.