Mobile wallet, the next big idea, is catching up

First came the cards that advocated ditching cash for plastic money. Now mobile phones want to do the job. So what are the options in mobile wallet today? And how is it different from mobile banking?

What it does
Apart from taking away the load from your wallet, the mobile wallet allows you to transact on the fly. The place where it manages to leave its big brother, mobile banking, behind is that to access your mobile wallet your phone does not need to be internet enabled.
The leading players in the mobile wallet segment are Oxicash, Paymate and Airtel Money. In the mobile banking segment, all telecom companies have tie ups with different banks that allow you to avail banking services.

“Unlike mobile banking, a mobile wallet is not confined to one particular account holder. You don’t have to be a particular bank’s customer to use its services on your mobile wallet,” says Ajay Adeshan, CEO of Paymate.

Banking on mobile allows you to recharge your phone, pay utility bills and transfer money, bidding goodbye to long queues.
All you need to know is the other person’s account number and a few clicks and the money will get transferred.

For loading cash into your mobile wallet, you will have to go to the respective wallet service providers. In a semi-closed wallet, apart from a bank, you can also transfer money to another mobile wallet.

These are referred as semi-closed wallets because once the cash is loaded into your mobile phone, you can use it for carrying out a transaction but you are not allowed to withdraw the money.
Whereas there are mobile wallets in countries like Kenya where once the money is transferred to your phone it can also be withdrawn. These are called open wallets.

Experts believe that India can be a big player for mobile phone transactions because of the number of people who have access to cell phones.

February data from the Telecom Regulatory Authority of India show there are 13.54 million internet users in the country compared with 911.17 million mobile phone users.

But the concept of mobile wallet is yet to catch up in a big way.
“The convenience of getting money transferred to the desired place or destination without an internet connection is one of the strong points of this big idea. Financial inclusion will be much more effective with such facilities as it is easier to reach out to the unbanked and those in rural areas,” said Srinivas Nidugondi, head - mobile financial solutions, Comviva.

What you need to pay?
There is a minimum fee for each transaction. For instance, a transfer of up to Rs500 will cost Rs5, while transactions more than that and up to Rs10,000 will draw a fee of Rs10.

Under mobile banking, apart from the transaction charge, one also pays internet charges for the phone.

The Reserve Bank of India (RBI) has capped the transaction limit to Rs10,000 for all essential services like ticketing, utility bill payments etc.

For non essential transactions, the limit is set at Rs5,000. There is also a ceiling of Rs50,000 for loading the wallet.

Should you consider it?
Apart from the convenience, players such as Airtel Money have special offers on phone recharge.

So if a vendor offers you a talktime of Rs192 on a recharge of Rs200, Airtel Money gives a talk time of Rs210. Ramesh Menon, chief executive officer, Maharashtra & Goa, Airtel, said another plus point of mobile wallet is that it’s a safe and secure.