A sneak peek into the world of Digital wallets

When we first made the move from cash to plastic, two things happened — it was easier to carry more plus safer to use, both at home and abroad. Now that we are embracing all things digital, why not make the move from plastic money to digital money? Digital wallets are even safer than carrying cards plus they offer a lot more convenience. Karan Bajaj & Hitesh Raj Bhagat sift through some of the more popular services

What is a Digital Wallet?
A digital wallet is a virtual storage system that can contain money, coupons and a digital certificate of your identity. Money can be added using a credit/debit card or net banking. It can then be used at supported merchants for utility bill payments, prepaid mobile/DTH recharges or purchases. Wallet services can be accessed via a browser, through apps or even by SMS (in case of limited internet access). The technology has evolved to use NFC in supported hand held devices to make payments. With NFC, you have to just tap the device on an NFC enabled payment kiosk and then authorise the payment with a password/pin.



UPSIDES

SAVES TIME

Usually, making payments using credit/debit cards or net banking requires you to input information regarding your card/account each time & then authorise through a payment gateway. With a digital wallet, you only need to login to to make a payment — no more going through multiple bank and payment gateway sites.

SAFER THAN MOST METHODS

Most wallets use rigorous security measures to protect your data. RBIauthorised payment gateways are used and the information is encrypted so that even the wallet providers cannot access any personal information. In addition, you do not share any information regarding your account or credit/debit cards while doing a transaction, so there is no way anyone can get access to your bank account.

EASIER TO TRACK SPENDING

Any transaction done on the mobile wallet, be it adding or spending money via the wallet, can easily be tracked from your account. This makes it rather easy to understand where and how your money was spent. You can even set a limit for your monthly spends — add only that particular amount to your wallet for expenditure.

DISCOUNTS ARE THE NORM

Almost all mobile walletproviders offer on-the-spot discount schemes for various merchants. These could be in the form of discount coupons or cashback on purchases. The catch is that you have to use the mobile wallet for making payments to the said merchant in order to avail the scheme.

DOWNSIDES

LIMITED MERCHANTS

While the number of merchants that support mobile wallets is growing, not every one is onboard yet. Mobile/DTH operators and utility services are available but not all online shopping portals support this payment feature — Amazon India is one such example.

NO BATTERY? NO PAYMENT

Usage of this service depends largely on access to a laptop or a mobile/tablet. However, if your device runs out of battery, then you cannot do anything with a mobile wallet. This could be a big reason why a mobile wallet can never completely replace actual cash or cards.

NO INTERNATIONAL USAGE

Each country has its own services. It is not possible to use a digital wallet service from India in other countries and vice versa. This limits usability for regular travellers.