• The unending currency hassles following demonetization has forced millions of Indians into using e-wallets for essential purchases and payments. But you have to decide what works best for you

The fortnight gone by has seen a sharp increase in people signing up to use mobile e-wallet apps. This is a side effect the government's clumsy arrangements in banks and ATMs to offset the effects of demonetization.

Millions of hapless citizens who are outside the banking and card-based payment system continue to experience pain and experience in accessing their own hard earned money.

But those of us who are among the relatively fortunate few to have bank accounts and are not intimidated by having to use our mobile phones for money transfers, at least have an option.

Indeed the travails visited upon lay citizens by this monumentally unplanned exercise has spurred popular acceptance of cashless e-payments in a way no amount of normal marketing could have achieved. Was this a cynical but intended by-product? Who knows — but in a perverse way it is pushing lakhs of us willy-nilly into paperless payment avenues and a digital commerce arena.

The advantage of the half dozen or so e-wallet apps available in India is that you don't need a debit card, credit card or access to internet banking for making payments You need to pre-loading your e-wallet ofcourse with some money and this is easiest done by an online transfer from your existing account, using conventional Net Banking methods of funds transfer. But once your wallet is loaded, you can make a variety of payments at merchants, taxis, theatres, restaurants as well as paying almost all kinds of monthly utility bills.

It is good to understand that there are e-wallets and e-wallets —infact three distinct classes:

1. Closed. This can be used only for one merchant: like Flipkart, OlaCab, Jabong etc

2. Semi closed: Most of the popular e-wallets, that you may seen advertised in huge front page advertisements in recent days fall in this category: They work at multiple — but not at all —merchant sites. Each has its client list.

3. Open. These are created by banks ( HDFC Chillar, DBS Digibank, ICICI Pockets etc) and additionally can be used to withdraw cash at ATMs through a physical card ( hardly a plus point right now!). All of them are now part of government's Universal Payments Interface. Basically the strength of these open bank operated wallets is that you can do person to person payments very fast.

Some popular semi-closed e-wallets are listed below. Each has links with a fixed number of enterprises that accept payment. Some are primarily for mobile recharge and TV bill payments. Unlike in the case of the 'Open" bank wallets, the money in semi-closed wallets needs to be shifted to the wallet before you can start using. If you operate multiple e-wallets — say one for your favourite taxi cab, another to pay groceries or order food — you end up locking your money in multiple wallets. Once the current cash crises is over — will you still use the e-wallets or will you go back to cash and carry? Give it a thought!

Some Indian e-wallet apps

Paytm. Possibly the most widely used and has the largest tie ups with merchants

PayUMoney. Offers fixed discounts on payments .Claims over 1 lakh merchants

MobiKwik claims 25 million users; has recently taken a lot of grocery chains and food outlests on board

Oxigen is one of the first in this business. Money can be transferred to any mobile number — which is great for small vendors and friends.

FreeCharge as the name indicates was primarily a "recharge with benefits" service — but it has expanded into other vendors.

CitrusPay is another combo of payments plus cash transfer service.

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Topics : #banking

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