Finance Minister Arun Jaitley on Thursday announced more reasons to go cashless — among them, discounts on insurance, automobile fuel, highway toll and train tickets paid for using credit/debit cards and e-wallets; accident insurance for railway tickets bought online; transaction fee waivers in online dealings with the government and PSUs; and service tax exemptions on credit/debit card transactions up to Rs 2,000.
The announcement provided compelling financial reasons for heeding Prime Minister Narendra Modi’s advice, in his Mann Ki Baat radio address, to drastically cut cash transactions. It also indicated the opening of new opportunities for e-wallets such as Paytm, MobiKwik, and FreeCharge. In the financial ecosystem that the central government envisages — and has been pushing aggressively — these apps that primarily started for mobile recharges could now be used everywhere from vegetable vendors to high-end salons.
What exactly are digital wallets, and why has their use seen such a boost since November 8 when Rs 500 and Rs 1,000 notes were demonetised?
How do you get hold of a digital payments app — or a “mobile wallet”?
With a smartphone, it’s easy. Paytm, MobiKwik, Freecharge, or even ones like Oxigen, are available on the official Android Google Play store or the Apple App Store. Make sure you download them from the official stores only; you will use them to make financial transactions, security is very important, and it is not wise to go to third-party stores. Banks like HDFC, ICICI and SBI have their own digital wallet apps, so you can choose them as well — but again, check the publisher’s name and ratings so you don’t fall for one of the several fakes in the store with misleading keywords in their names. Definitely don’t click on WhatsApp or Facebook links that promise to guide you to these apps — even if they have been forwarded by friends.
For those who have basic smartphones that can’t access the Google Play store, MobiKwik, which claims to be the second biggest mobile wallet in India, has launched a 1MB app that can be downloaded by giving a missed call to a number. MobiKwik says the app works even on 2G/Edge connectivity.
How do you set up and load your wallet?
Once you have downloaded the wallet, you just need to open the app and follow instructions. Most digital wallets let you sign up with your mobile number. Once that is done, you can create a password and start your account. Or you can choose to log in via your Facebook or Google account, depending on whether the app supports it.
After this, tap on the ‘add money’ option. Do this via netbanking or debit/credit card. You have the option of saving your debit/credit card details to make future transactions faster. Some apps have services for cash pick-up in Delhi-NCR and Mumbai.
Most wallets have a tab that shows how much money it has. RBI has increased the limit for these wallets to Rs 20,000 per month until December 31; it was Rs 10,000 per month earlier. Which means if you’re planning to depend on an e-wallet for a lot of transactions, it might make sense to have multiple accounts with several apps.
What can you use these apps for?
Demonetisation has forced a lot of places to accept digital payments. MobiKwik, Paytm, and FreeCharge are being accepted at toll plazas; in Mumbai, FreeCharge is an option for paying police challans. MobiKwik is accepted by IRCTC, Paytm supports flight tickets within the app. Reliance Jio plans to get 10 million merchants on board for its Jio Money Merchants solution. All of these apps are aggressively targeting smaller merchants to ensure they are accepted at more and more places. Your neighbourhood grocer might have switched already.
If both you and your friend/relative has a Paytm or MobiKwik account, you can transfer money by entering their mobile number and the amount. You also have the option of sending money straight to someone’s bank account. Most wallets have cancelled the 1% transaction fee they would charge earlier.
OK, but why a smartphone app — and not a debit card?
As of August, India had only 14.6 lakh point of sale (POS) machines. The demand for these machines has spiked since November 8, but their numbers will likely stay far short of requirements for quite some time. A digital wallet is seen as a convenient and safe way to pay by smartphone users. India has an estimated 240 million smartphone subscriptions; the number is projected to more than double to 520 million by 2020. The user can just load the wallet, with no need to save bank or card information. At the merchant location, the money can be transferred without need for swiping a card. Most apps are offering consumers cashbacks and discounts for transactions.
What are the limitations of e-wallets?
The monthly limit shackles both consumers and merchants. There’s the option of getting an eKYC and raising the limit to Rs 1 lakh for consumers, but again those without Aadhaar are left out.
Digital wallets are for those with some experience of the way digital transactions work. The unlettered, the elderly, and those without smartphones will be largely left out. Poor connectivity and patchy Internet are serious challenges.
The announcement provided compelling financial reasons for heeding Prime Minister Narendra Modi’s advice, in his Mann Ki Baat radio address, to drastically cut cash transactions. It also indicated the opening of new opportunities for e-wallets such as Paytm, MobiKwik, and FreeCharge. In the financial ecosystem that the central government envisages — and has been pushing aggressively — these apps that primarily started for mobile recharges could now be used everywhere from vegetable vendors to high-end salons.
What exactly are digital wallets, and why has their use seen such a boost since November 8 when Rs 500 and Rs 1,000 notes were demonetised?
How do you get hold of a digital payments app — or a “mobile wallet”?
With a smartphone, it’s easy. Paytm, MobiKwik, Freecharge, or even ones like Oxigen, are available on the official Android Google Play store or the Apple App Store. Make sure you download them from the official stores only; you will use them to make financial transactions, security is very important, and it is not wise to go to third-party stores. Banks like HDFC, ICICI and SBI have their own digital wallet apps, so you can choose them as well — but again, check the publisher’s name and ratings so you don’t fall for one of the several fakes in the store with misleading keywords in their names. Definitely don’t click on WhatsApp or Facebook links that promise to guide you to these apps — even if they have been forwarded by friends.
For those who have basic smartphones that can’t access the Google Play store, MobiKwik, which claims to be the second biggest mobile wallet in India, has launched a 1MB app that can be downloaded by giving a missed call to a number. MobiKwik says the app works even on 2G/Edge connectivity.
How do you set up and load your wallet?
Once you have downloaded the wallet, you just need to open the app and follow instructions. Most digital wallets let you sign up with your mobile number. Once that is done, you can create a password and start your account. Or you can choose to log in via your Facebook or Google account, depending on whether the app supports it.
After this, tap on the ‘add money’ option. Do this via netbanking or debit/credit card. You have the option of saving your debit/credit card details to make future transactions faster. Some apps have services for cash pick-up in Delhi-NCR and Mumbai.
Most wallets have a tab that shows how much money it has. RBI has increased the limit for these wallets to Rs 20,000 per month until December 31; it was Rs 10,000 per month earlier. Which means if you’re planning to depend on an e-wallet for a lot of transactions, it might make sense to have multiple accounts with several apps.
What can you use these apps for?
Demonetisation has forced a lot of places to accept digital payments. MobiKwik, Paytm, and FreeCharge are being accepted at toll plazas; in Mumbai, FreeCharge is an option for paying police challans. MobiKwik is accepted by IRCTC, Paytm supports flight tickets within the app. Reliance Jio plans to get 10 million merchants on board for its Jio Money Merchants solution. All of these apps are aggressively targeting smaller merchants to ensure they are accepted at more and more places. Your neighbourhood grocer might have switched already.
If both you and your friend/relative has a Paytm or MobiKwik account, you can transfer money by entering their mobile number and the amount. You also have the option of sending money straight to someone’s bank account. Most wallets have cancelled the 1% transaction fee they would charge earlier.
OK, but why a smartphone app — and not a debit card?
As of August, India had only 14.6 lakh point of sale (POS) machines. The demand for these machines has spiked since November 8, but their numbers will likely stay far short of requirements for quite some time. A digital wallet is seen as a convenient and safe way to pay by smartphone users. India has an estimated 240 million smartphone subscriptions; the number is projected to more than double to 520 million by 2020. The user can just load the wallet, with no need to save bank or card information. At the merchant location, the money can be transferred without need for swiping a card. Most apps are offering consumers cashbacks and discounts for transactions.
What are the limitations of e-wallets?
The monthly limit shackles both consumers and merchants. There’s the option of getting an eKYC and raising the limit to Rs 1 lakh for consumers, but again those without Aadhaar are left out.
Digital wallets are for those with some experience of the way digital transactions work. The unlettered, the elderly, and those without smartphones will be largely left out. Poor connectivity and patchy Internet are serious challenges.
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