With cash transactions hitting a standstill due to the government’s demonetization drive, the switch to digital payment formats, such as cards, online transfers and mobile wallets, is inevitable. E- Wallet eliminates the need of re-entering your account information again and again. Once you’ve created your e-wallet account, you can make payments faster and without much hassle. With so many mobile wallets available in India, it is now all the more crucial to know the benefits and rewards associated with each.
Types of e-wallets
Closed Wallets– These are payment instruments issued by a business entity to use it for their respective entities only. These wallets are used to facilitate the purchase of goods and services. These types of wallet do not permit redemption or withdrawal of cash.
For example: E-commerce website like Jabong.com, flipkart.com and makemytrip.com offers e-wallets to make the payments of the services and the products purchased from them. Cab services and mobile companies also offer closed wallets. These wallets provide cashback for the payment made through their channels to gain the trust and loyalty of their customers.
Semi Closed Wallets– These wallets are slightly different from the closed wallets. These wallets are used to facilitate the purchase of goods and services made through merchants who have a specific contract with the issuer to accept the payment instruments. You can transact online and offline which include buying goods and services, financial services, payment of fees, premiums, etc. These wallets are issued by non-banking institutions. They are required to deposit the money in an escrow account under a partner bank.
For example: Paytm is the largest and fastest growing e-wallet which can be used to directly send the money to the bank account. Freecharge is also a semi closed wallet just like Paytm.
Open Wallets– These wallets are different from closed wallets and semi closed wallets. These wallets can be used to facilitate the purchase of goods and services as well as financial services like fund transfer with cards accepting the merchant locations and point of sale. These types of wallets also permit withdrawal of cash. However, cash withdrawal is permitted only up to limit of 1,000 per day.
For example: M-pesa by Vodafone India Ltd in partnership with ICICI Bank Ltd is an open wallet.
Top 5 e-wallets in India
Paytm– It is the fastest growing e-commerce company that has carved its name in a short span of time. It supports both online and offline payments. Money can be transferred from the wallet to the bank account.
Freecharge– Owned by Axis Bank, freecharge is also one of the largest digital payment platforms. Users can receive and send money instantly using freecharge.
Mobikwik– Mobikwik made the online payment of bill and recharge easy and prompt. It is also among the top e-wallets in India. It has lots of distinctive features and provides various offers.
Airtel Money– With Airtel Money you can enjoy benefits like shopping, recharges and ticketing. You can also easily send money to any bank account through NEFT.
Oxigen– It is also India’s leading digital payment provider, partnered with VISA and issued a virtual Prepaid VISA feature which lets users to pay online with Oxigen wallet.