Mobile Wallet

Mobile wallet is a virtual money wallet that can be used to make instant payments. Domestic e-commerce companies, such as Flipkart, plan to launch a wallet soon, while a few payment gateways, such as Paytm and Mobikwik, offer semi-closed wallets already. Telecom operators also offer this facility internationally. Apple Inc. also introduced an iPhone Wallet, which will have tie-ups with Visa Inc., Master Card Inc., and American Express Co.

Mobile wallet is going to next wave of change in the way people make payments. Let us see more about what is Mobile Wallet and how is it going to work? It is a virtual money wallet that can be used to make instant payments same as with a physical wallet. It is an application stored in cell phones, which enable users to make payments for utility bills, book tickets, transfer money, other such transactions. It can also be used to make e-payments while shopping, in physical stores or at e-stores.

Once an application is stored in the phone, a user is registered and knows your customer documents are submitted, a user can transfer money to this wallet and then make payments. Customer can provide any of his documents such as driving license, passport, voter identity card, Aadhaar card, and PAN card for identity and address proof. Bank account statement can also be given for address proof. The outlets where payments can be made depends on the wallet- closed or semi-closed. Closed wallets generally allow payments only at particular merchants, while semi-closed wallets allow payments to a group of establishments that have agreed to accept payments through the wallets.

It is more convenient to use it than a web based payment method such as paying through a website. The payment can be made over a mobile network as well as through a message using the unstructured supplementary service data platform. Users can make payments without using cash, debit cards, and credit cards, while in a store. This protects users from card data being misused through phishing and cloning. Since the application requires a Mobile personal Identification Number (MPIN) to make transactions, even if the mobile is stolen or lost, without the MPIN, a transaction will not be possible.

Daily and monthly limits to the number of transactions are the big hurdle while making big purchases. It cannot be used at all outlets is also a worry. Mobile wallet will have money stored in it, it will not earn any interest, while money in a bank savings account earns 4-7% interest, depending on the bank.