On account of the recent demonetization and increased demand for cashless transactions, we decided to shed some light on digital currency aka virtual money, digital wallets, mobile wallets and e-Wallets.
We are already familiar with digital currency and internet based transactions, where money has no physical form but still serves the purpose. So this trend of the cashless economy has demanded other easy modes of payment and Reserve Bank of India (RBI) came up with prepaid payment instruments. These instruments include smart cards, magnetic stripe cards, internet accounts, internet wallets, mobile accounts, mobile wallets, paper vouchers and any such instrument which can be used to access the prepaid amount.
According to RBI, the mobile wallets which are a form of prepaid payment instrument falls into three categories, viz (i) Closed (ii) Semi-closed and (iii) Open. These vary in their functionalities like cash withdrawal and redemption. A closed wallet lets you pay at the merchants portal, a semi-closed wallet lets you pay and withdraw, and an open wallet allows you to perform financial transactions in addition to normal functions.
List of Popular e-Wallets in India
|Paytm||OLA Money||SBI Buddy||PhonePe powered by YES Bank|
|PayUmoney||Itzcash||HDFC Chillr||Airtel Money|
|Mobikwik||mRupee||HDFC PayZapp||Idea Money|
|Citrus Cash||Pockets by ICICI bank||LIME by Axis Bank||M-Pesa by Vodafone|
|Oxigen Wallet||M-Clip by Bank of Baroda||Citi MasterPass by Citibank||JioMoney by Reliance Jio|
|Freecharge||DBS aka DigiBank||DigiPurse by Union Bank of India||Future Pay powered by Oxigen|
|Udio by RBL (Previously Shmart)||RuPiZo by DigiBank||PayApt by IDBI Bank|
Most of the digital wallets listed above are Semi-closed type and only a few are of an Open type. The e-Wallets usually come with transaction limits, however, a user can upgrade them after KYC verification. Most of the wallets now offer Aadhar-based e-KYC verification which is easy and offers instant account activation/upgrade. To load money to wallets you can use your existing debit cards, credit cards or net banking. Many wallets companies also offer cash pickups through agents. To withdraw money or to transfer to a bank account is mostly done via IMPS – MMID/IFSC and takes one to three days. Wallet providers like Vodafone m-pesa offer cash withdrawals through Vodafone M-Pesa outlets across India.
Digital wallet features
- Digital wallets can be conveniently and securely used for online shopping, recharge, bill payment, send and receive money, and offline purchases.
- Shop owners can set-up a merchant account on the wallet providers website or app to accept payments digitally. These accounts have comparatively reduced transaction charges after KYC verification.
- Wallets come with a limit of Rs 10,000 for non-KYC users (limit increased to Rs 20,000 till 30th December 2016) and up to one lakh for KYC verified users.
- Money can be loaded to wallets through Debit cards, Credit cards, net banking, receiving money from others, through pickup agents or from company/bank outlets.
- Wallet providers offer virtual and physical cards that can be used like regular bank debit/credit cards on most online and offline stores.
- Money in a wallet can be withdrawn to one’s bank account for free up to a limit or with a small transaction charge.
As a way to promote the adoption, wallet providers occasionally issue offers like cash back and discounts. Using these wallets you can save money during online shopping, recharges, bill payment and day-to-day purchases. We will now explore some of the popular e-Wallets.
Benefits & Offers of Some Popular e-Wallets
- Paytm – They started off as a recharge portal, but now is one of the biggest shopping portals too. You can use Paytm Wallet to shop online, pay for recharges and bills, send and receive money, withdraw money to a bank account and do other transactions. You can also use Paytm Wallet to pay for your vehicle fuel, pay tolls on the highway, pay for your food bill at restaurants and cafes and on purchases from nearby stores and merchants.
- PayUmoney – PayU launched the e-Wallet service back in 2014. This wallet offers a key feature, the PayUmoney buyers protection, which ensures that the customer gets the purchased product or service or else we can initiate a dispute to get the refund for the same.
- Pockets by ICICI – This is an open type e-Wallet which provides added facilities like a savings account and internet banking. A customer can link his pockets account to other ICICI savings accounts via the banking portal.
- PhonePe by FX Mart – A Flipkart subsidiary company and its nation’s first UPI-based mobile payment app powered by YES bank. All you need to do is link your bank account to the PhonePe app and make hassle-free, secure payments directly from your bank account 24/7.
- FreeCharge – A Snapdeal subsidiary company offers a full-fledged digital wallet like Paytm. You can use the FreeCharge wallet to shop online, recharge your mobile and pay bills. They also provide a virtual credit card for convenient online and offline shopping.
- Future Pay – This is a digital wallet for shopping across Future Group stores such as Big Bazaar, Ezone and Home Town. You can load money online or offline by paying cash at Future Group stores. The price match feature in this app helps you to save more.
e-Wallets in general, can be used for shopping, doing recharges, booking tickets, cabs and much more. Some e-Wallets like Udio, Digibank, Pockets, etc. provide virtual and physical cards which can be used like regular bank cards on most online and offline stores. Physical cards from Pockets, Digibank can also be used at ATMs to withdraw money, whereas certain cards only let you get the balance statement from ATMs.
Disadvantages & Limitations of e-Wallets
Most e-Wallets have daily and monthly usage limits. Some e-Wallets convert money to points or other forms retaining its value, but can no longer be converted back to real money. The following table gives you an idea about the limits and various facilities of some popular e-Wallets.
|e-Wallet Name||Virtual Card||Charges To Transfer The Amount To Bank||Amount you can transfer to bank per transaction/day/month (Rs)||Maximum Wallet Balance limit per month (Rs)||Maximum Cash load per transaction/month (Rs)||Extra|
|Paytm||No||1.01 percent||Minimum Rs 100 per transaction, Rs 3000 maximum per day, Rs 10,000 maximum per month||Rs 10,000||Rs 10,000||Transfer charges for KYC users are 0 percent|
|Oxigen||Yes||3 percent and minimum Rs 5||Rs 5000 per transaction, Rs 10,000 per day and per month.||Rs 10,000||Rs 2000 per transaction||New users cannot do bank transfer the loaded cash for first 72 hours|
|ICICI Pockets||Virtual/Physical Card||0 percent||Rs 10,000 per transaction/per day and per month||Rs 10,000||Rs 10,000 via Net banking and Rs 2000 via Debit cards||1. You can’t load money via credit card.|
2. Bank withdrawals are processed via NEFT for non-ICICI account and instant for linked ICICI accounts
3. Overall maximum load via different Debit cards is Rs 5000 per day.
|Citrus Cash||No||0 percent||Rs 3,000 per transaction and per day, Rs 10,000 per month||Rs 10,000||–||1.Any withdrawals over Rs 3000 will be transferred to your initial payment mode (Used to add money to the wallet) instead of your bank account.|
2. Transfers are processed via NEFT.
|Mobikwik||No||0 percent||Rs 2,000 per transaction, per day and per month||Rs 10,000||–||–|
|PayU||No||0 percent||Rs 2,000 per transaction and per day. Rs 10,000 per month||Rs 10,000||Rs 10,000||1. Money added via Credit Card is not transferrable.|
2. Money added can be transferred to bank only after 7 days.
3. Transfers are processed via NEFT.
|HDFC PayZapp||Yes||No withdrawals||–||Rs 10,000||Rs 10,000||1. Do not allow withdrawals.|
|AXIS Lime||Yes||4 percent + tax||Rs 10,000 per transaction||Rs 10,000||Rs 10,000||–|
|Udio||Virtual/Physical Card||0 percent up to Rs 2000 per month and 2.95 percent above that for non-KYC customer. For KYC Customers 0 percent up to Rs 20,000 per month and above that 1 percent will be charged.||Rs 5,000 per transaction. Rs 10,000 per day and per month.||Rs 10,000||Rs 5,500 per transaction and Rs 10,000 per month||1. Bank transfers via NEFT and processed after 24 hours|
2. Official FAQs: [undioforyou.com/faq].
|SBI Buddy||No||0 percent||Rs 2000 per transaction and per day. Maximum Rs 10,000 per month.||Rs 10,000||Rs 10,000||1.Money can be added via Debit card and Net banking (IMPS)|
2. Official FAQs: [sbi.co.in/Buddy]
3. Transfer limits have been changed to Rs 2000 from Rs 5000 earlier
|Freecharge||Yes||0 percent||Rs 5000 per transaction. Rs 10,000 per day and per month.||Rs 10,000||Rs 10,000||1. Official FAQs : [freecharge.com/Faq]|
2. Money added to wallet can be transferred to bank only after 7 days.
|DigiExpress DBS||Yes||0 percent||Rs 2000 per transaction and per day||Rs 10,000||Rs 10,000||1. Refer. [dbs.com/digibank]|
2. Official FAQs: [dbs.com/digibankFAQ]
3. Load wallet using Debit card and Netbanking. No credit card allowed.
|DigiPurse||Yes||0 percent||Rs 2000 per transaction and per day. Rs 10,000 per month.||Rs 10,000||Rs 10,000||1. Initial top up amount is Rs 2000|
2. Official FAQs: [unionbankofindia.co.in/digipurse]
|PayApt IDBI||Yes||–||–||Rs 10,000||–||1. Do not allow withdrawals.|
2. Money can be loaded through Credit card and Debit Card only
Above list is not exhaustive, comments on any changes are appreciated and we will update the sheet as per.
RBI has doubled the balance that can be kept in non-KYC semi-closed prepaid payment instruments including e-Wallets and cards to Rs 20,000. For merchant accounts, the limit is set to Rs 50,000. This relaxation will be applicable until December 30, 2016.