A smart way to pay

On a busy work day, it is common to remember the most important pending bill payment for electricity or a DTH recharge at the end. Worry not, a plethora of mobile wallets have mushroomed to ensure that consumers need to do less when it comes to making a number of transactions. Says 26-year old Mumbai based Rohit Sharma, “I pay my mobile bill, recharge my DTH connection and also make payments for movie tickets via Citrus Pay wallet.” Sharma is one of the many satisfied customers who swear by the convenience of transacting through mobile wallets.

The rise of smartphone usage in India has given rise to extensive usage of mobile apps, which are fast leaving a trail on the way we spend our money and time. It is in this vein that mobile wallets came into existence and have flooded the markets with PayTm, Ogigen, ItzCash, and many others. To bring these entities under regulation, the RBI came up with the Payments and Settlement Systems Act, 2007. The RBI has laid down guidelines for the issuance and operation of pre-paid payment instruments and a master circular consolidating all regulations on the same was notified on July 1, 2014.

First, a mobile wallet is a virtual place where you could hold some of your money online. You can make payments using this wallet instead of using a credit or debit card or net banking. This means that you don’t need to directly access your bank account to make payments. This is the biggest advantage with mobile wallets—even if there is any security breach, only the amount in your wallet is compromised. Your bank account remains safe. Money in the mobile helps in paying for an app based cab ride, pay utility bills such as landline phones and electricity bills, shopping on a plethora of ecommerce sites, book flight tickets and transfer funds to anyone in your phone’s contact list.

Safe, secure and beneficial

Says Amrish Rau, managing director, Citrus Pay, “We have implemented a wallet app with a taxi company, where the customer can simply walk away at the end of the ride. Similarly, one cinema hall chain has used our services to be able to order food from the seat itself.” One can go on and on with the convenience that these wallets offer and the ease of using them with just a touch on your phone. Moreover, most wallets offer several incentives to users in a bid to retain them. The idea being, incentivise the user to spend more because that is how the wallet earns. It is for this reason that discounts, cash backs and loyalty points have become common. “The wallet reminds me of my pending payments, captures useful information and I get cash back, which is an add-on,” says Sharma.

For many users, who do not have access to a credit or debit card, these wallets are indeed a boon. All the users need is to make a visit to the local kirana store and top-up their mobile wallet by paying cash over the counter. And, unlike net banking transactions, where one has to enter their personal details frequently, in case of mobile wallets, there is no such trouble. “The best advantage of mobile wallets is the speed of doing transactions with them. You experience a faster checkout and transactions are just a click away,” says Pramod Saxena, founder and CMD, Oxigen Wallet.

According to Naveen Surya, managing director and CEO, ItzCash Card, “With digitisation of money, it becomes extremely convenient for the user to transact using a mobile device in real time and with better control.” Now, you can also withdraw cash at an ATM using your prepaid mobile wallet; with some allowing you to withdraw cash up to Rs.1 lakh using the wallet. For instance, BSNL recently launched a wallet service known as Speed Pay in partnership with Pyro, a technology company, to offer higher withdrawal through ATMs. Says Paritosh Reddy, CEO, Pyro, “The daily cash withdrawal limit is Rs.5, 000, but for the customer whose KYC (know your customer) compliance is in place, the permissible withdrawal can be as high as Rs.1 lakh.”

But, what is always worrisome is the safety in using these wallets. Fortunately, that is the best feature of mobile wallets—they are highly secure and difficult to hack. “Oxigen Wallet gives customers the security by providing an OTP (one time password) on the registered mobile number for every online money transfer one makes,” explains Saxena. For instance, the OTP is required to complete the transfer and all wallet providers have multiple layers of security to ensure there is no breach of data or details of the user, which limits the chances of fraud.

Smart users

Many shopkeepers are finding these wallets beneficial in helping them manage businesses better. In smaller towns, mobile wallets are very useful, especially when transacting in the absence of credit or debit cards. Take, for instance, 30-yearold Manoj Lodha from Bhilwara in Rajasthan, who is an interior designer and hotelier, and finds them very handy and safe to use.

“Someone once transferred Rs.3,000 from my mother’s account fraudulently. All I did was to call up the customer care and they immediately took action on the fraudster’s account to stop any further misuse,” narrates Lodha. In a matter of few days, his mother’s account was reconciled. The entire process of loading money into the mobile wallet and paying is so convenient that it has made users addicted to mobile wallets and experiences like that of Lodha are further helping spread their use in making financial transactions.

Nowadays, even NRIs are using prepaid wallets when they are in the country. This gives them freedom from carrying around travellers’ cheques and currency conversions or worrying over lost cards. The wallet can be loaded for up to Rs.2 lakh and cash withdrawal of up to Rs.50, 000 per month is permitted. The wallet can be loaded in an overseas branch of an Indian bank and would get activated as soon as the NRI arrives in India.

With the explosion of the smartphone culture, mobile wallets have everything going for them. Moreover, the government’s initiative to encourage card usage and cashless transactions will only give further boost to mobile wallet usage.

To add to this, in order to keep pace with changing technology in the digital commerce space, the RBI too is updating the rules associated with flow of money in the virtual economy on a periodic basis. If it was mobile phones that revolutionised communication, there is little doubt that mobile wallets will transform the way one transacts without cash.  

olmdesk@outlookindia.com