Everything you want to know about E-Wallet

In this digital world, mostly we rely on passwords to access our bank accounts, emails or any other social media accounts. Applying one password for everything, it becomes easy for a hacker to steal your information. If we use different passwords for every account, it becomes hard to remember. The best solution for this problem is E-wallet. It enables to store all the passwords in one app.

E-Wallet can be termed as an online prepaid account which allows you to stock money that can be used whenever required. It allows the consumers to buy products starting from grocery to airline tickets without the need of swiping a debit or credit card.  In other words, we can say that these wallets replace the physical wallets.

E-Wallet is an Ilium Software which can be downloaded from an app store or directly from the ilium website. It is available on all devices such as iPad, Android, iPhone, BlackBerry and even in Mac and Windows computers.

The most popular e-wallets are PayPal, PayTM, Mobikwik, Oxigen, M-Pesa, Moneybookers, Google Wallet PayU, Freecharge and Airtel Money.

The eWallets are divided into 4 types based on the kind of usage and payments such as semi-open, open, semi-closed and closed.

The semi-open Payment transaction used at card accepting merchant locations or PoS terminals. However, they do not permit cash withdrawal or redemption except purchasing goods and services. Private label cards issued by merchants are the perfect example of semi-open wallets.

The best examples for open wallets are Visa, MasterCard or Rupay Card. These can be used for the purchase of goods and services along with cash withdrawals and fund transfers. Mostly open wallets are issued by banks.

Semi-closed wallets are used to buy goods and services at clearly identified merchant establishments or locations. These can be regarded as prepaid online accounts, but they are not useful for withdrawal of cash.

PayTM is a semi-closed wallet where the customer can buy goods and services after loading money in the wallet. They can make payments to the merchants who had already tied up with the company. In India, PayTM is one of the largest e-wallet platforms which make arrangements to store money for quick payments. Apart from e-commerce transactions, it allows you to transfer money, pay bills, and avail services from merchants such as entertainment, travel and much more.

Closed wallet, as the name suggests it is issued by business establishments to its customer to buy goods and services only in that company. For example, Jabong.com comes under the closed wallet. These wallets do not allow cash withdrawal or redemption. They function when money gets credited due to cancellation or when a product is returned.

Ewallets are not cheap as they charge transaction fees. Sometimes the charges may be higher than the traditional payment services. Transaction charges vary from one to another. So it is advisable to do some research before opting to any e-wallet.

E-Wallets can be accessed by children if they know their parent’s passwords or if they have any personal account. However, AllCharge e-wallet comes up with a feature that allows parents to create a sub account which acts like a child account.  These accounts can be provided for children with a controlled payment method where parents can limit the monthly purchase of their children.

With the use of e-wallets, the vision for a cashless economy achieved easily.

With the demonetization of high-value currency, RBI increased the limit for digital wallets and prepaid instruments to Rs.20,000 for users and to Rs.50,000 for merchant bank transfers. Customers need to upgrade the KYC (Know Your Customer) norms just like opening a new bank account if the transaction limit is 100K in the wallet. For example, Oxigen Wallet allows a daily transaction of Rs.10,000 and single transaction limit to Rs.5000.

Remember, don’t load your wallet with a large amount of money as it does not earn interest.

E-wallet comes with an advanced encryption standard with 256-bit key which makes it secure. When you create an eWallet password, the data inside gets encrypted thus making it difficult to steal.  It comes with inherent security features.

When you register with an e-wallet like PayTM, an escrow account gets created to deposit the preloaded money. When a purchase or payment is made, only the particular amount credits into the PayTM. Your amount will be safe even during the banking transactions or transfer of money. It does not get stolen by anyone.

If any fraud happens in your Ewallet, file a complaint with the wallet company or any other party such as mobile service provider or third party vendor, that could have been the route of fraud.

The complaints or grievances that come with mobile banking wallets will be covered under the Banking Ombudsman Scheme. If the cellphone is lost or stolen which contains the e-wallet passwords, it is better to block the phone to protect the funds in the wallet.

The biggest problem in our country is the poor mobile connectivity which makes difficult to access the e-Wallets. However, the government is taking measures to solve these problems and make India a cashless economy.