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Going cashless – the E-wallet way!

Updated: Mar 21

Mobile commerce is booming in India and businesses are fast leveraging the explosive mobile growth to offer a common platform for daily financial transactions. Mobile friendly websites and apps are all making it possible to shop online, book movie, tickets, pay bills, etc. The governments audacious demonetisation move and the massive push to go cashless has given further impetus to mobile wallets, popularly known as E-wallets.

What are E-wallets?

E-wallets or mobile wallets are the digital version of your physical wallet, i.e., a digital payment application. It stores your money in digitized form for instant payments. In simple terms, no cash or debit /credit card is required to conduct a transaction. All you require is a smartphone and internet connection. Mobile wallet enables a user to not just make purchases but also transfer funds to another person using the same wallet. These wallets are governed by RBI rules.

How do they work?

You can install any e-wallet app from the Google or Apple play store. Security is very important and it is thus prudent to download from official stores rather than third party stores for financial transactions.

After downloading the wallet, you just need to open the app and follow instructions. Most wallets require you to sign up with your mobile number. Once that is done, you can create a password and start your account. Alternately, you can choose to log in via your Google or Facebook account, whichever is supported by the app. You can then choose the add money option and load the walletvia net banking or debit/credit card. The maximum amount that can be loaded in a wallet per month is Rs.20,000 for non-KYC customers and Rs.1 lakh for KYC customers.


  1. Digital Wallets are convenient to conduct transactions from your mobile phone. Bank accounts and debit/credit cards linked under one platform help in efficient management & timely payment of bills and for other transactions. You can bid goodbye to your bulky wallets as there is no need to carry cash or even plastic money. You also do not require to visit the ATMs very frequently.

  2. They are easy to use with just a one click pay. One can pay immediately with no hassle to fill in the card numbers and passwords each time.

  3. They are useful to make purchases, pay bills (utility, mobile, internet, DTH., etc.) transfer funds to a person having the same wallet facility or anyone having a bank account. It is not just the established merchants from entertainment, travel, food and retail industry who have partnered with e-wallet companies. Post demonetisation, small shopkeepers, especially the traditional kirana stores registering for digital wallet services have been on the rise. During the one month following demonetisation, when hard cash was in short supply, people found convenient to pay their kirana bills and other small vendors through e-wallet for daily activities. The beauty of this e-wallets is that you can transact in small denominations. Even a minor Rs.20-50 purchase can be conveniently done through e-wallet. So, there are no hassles of searching for a change.

  4. One of the myriad benefits that come along with using digital wallets is reward points, cashbacks and discounts on offer.

Some popular mobile wallets in India:

There are a host of mobile wallet companies available in India. Paytm is the most popular e-wallet service and has a first mover advantage over other players in the market. It has gradually roped in a lot of merchant partners to get accepted at more and more places by customers. Other e-wallet companies include Mobikwik, Freecharge, Oxigen, PayUMoney, etc. Many Indian banks also offer their own wallet services. For e.g., HDFC Bank has PayZapp, ICICI Bank offers Pockets, SBI has Buddy, Axis Bank offers Lime. There are also wallet services for specific transactions. For e.g., IRCTC wallet allows you to book your train tickets as per your convenience.


  1. Mobile & Internet connectivity: While there has been an explosive growth in the number of digital wallets users, especially post demonetisation, it is still a long road ahead. For a developing country like India, limited mobile network and slow/lack of internet connection, particularly in semi-rural and rural areas are the biggest impediments. Digital wallets are in the form of an app mostly on smart phones and more than half of India’s mobile phone subscribers use basic phones. Presently, not all e-wallet services support basic phones. Although some companies like Paytm and Mobikwik offer non-smart phone users a toll-free number to enable instant fund transfer and recharge mobile phones, the awareness about such services is limited.

  2. No inter-operability: Wallet services are rigid in the sense that you can only transfer funds or do transactions with the other party using the same wallet. For instance, a person using Patym wanting to transfer funds to his relative/friend cannot do so if the latter is using another wallet, say, Mobikwik.

  3. Limit & charges on fund transfer: If there is an emergency to instantly transfer funds to your family members/relatives, you can only transfer up to a maximum limit of Rs.25,000 per month. Further, transferring money from your wallet to bank account attracts a significant 4 per cent charge, i.e., Rs.1,000. If you have done your KYC with the wallet company, you will be charged 1 per cent of the transaction.

  4. Security: As the number of e-wallet subscribers rise by the day, there are legit security concerns in their usage. Just like your bank account, most e-wallets adhere to all RBI security specifications and also have extra layers of security. The authentication in the form of a PIN or fingerprint can protect your sensitive financial data, even in the case of your handset being stolen. However, e-wallets are still as vulnerable as net banking, debit/credit cards, etc. Cyber frauds are possible in the case of mobile wallets too through methods such as phishing, identity theft, etc.

There are dozens of wallet solution providers today who are making rapid strides tapping the huge customer base and making it convenient to manage any financial transaction under one roof. Customers have a wide array of services to choose from and some use more than 1 wallet service. However, it is better to spread out your options and conduct transactions through other platforms too like online banking, credit cards, debit card, etc. Use e-wallets for convenience and not with the sole objective of earning cash backs and discounts. Over dependence on just one technology to manage something as important as your financial transactions could be dangerous.

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