Ignoring technological change in a financial system based upon technology is like a mouse starving to death because someone moved their cheese”– Chris Skinner
What are mobile wallets?
A mobile wallet refers to a virtual wallet that stores a person’s virtual payment information and payment card information on a mobile device. It is a payment service that allows people to send and receive money virtually. It is a technology that is used as a substitute for a wallet that people carry in their pockets. Some common examples of mobile wallets are Paytm, Airtel Money, Oxigen Wallet, mRupee, Vodafone m-Pesa, Mobikwik.
Types of mobile wallets:
There are four different types of mobile wallets, namely: open, semi-open, semi-closed, and closed. Open wallets are issued by the bank and allow us to withdraw cash from ATMs, purchase goods and services, and also transfer funds. Semi-open wallets do not allow the individuals to withdraw funds or get it back but can be used to transact with merchants that have a contract with a particular brand. Semi-closed wallets allow purchasing of goods and services from the listed set of merchants and also perform financial services at identified locations but do not enable withdrawing money. Closed wallets are issued by individual companies to their customers to buy goods and services exclusively from their company. In this type of wallet, customers cannot withdraw money.
Advantages of mobile wallets:
Unlike a regular wallet, mobile wallets cannot be snatched or lost anywhere. It is easily accessible and allows us to make transactions by one-tap, unlike net-banking or everyday non-virtual transactions that take a lot of time and energy. Our confidential information remains safe in case of mobile wallets, unlike the net banking facility or credit/debit card payments that ask for our sensitive data every time we need to make a transaction. In the case of mobile wallets, an individual can pay the exact amount and need not pay a round figure. Another benefit of using mobile wallets is that we get discounts, vouchers, gift cards, and offers.
Disadvantages of mobile wallets:
This is an easy method of payment only for mobile-savvy individuals; others might find it difficult to operate it. It also requires a good internet connection, without which there are chances that the transaction might fail. Till date, there are only a few merchants and shopkeepers who are listed in mobile wallet services, and therefore this is not an option in all situations. Large transactions cannot be carried out using mobile wallets as there is a limit on the amount that can be deposited and spent daily. An individual cannot entirely rely on mobile wallets as there are chances that the battery can run low or the mobile phone can also be lost or snatched.
This is an age of technology, and almost every individual owns a smartphone. So mobile wallet services are becoming common all around the world. All of us must go hand in hand with the new inventions and make use of it to make different activities in our lives easier.
Source: The Economic Times
Author Name: Anita Babu.
Biography: She is a postgraduate student pursuing Masters in Psychology HRDM from Christ (Deemed to be University), Bangalore. Content-writing has always been her favorite hobby and she likes gaining knowledge about new topics.
Edited by: Shweta Mittal, team SciComm