With the tremendous increase in our dependency on digital wallets to make financial transactions, the room for error/fraud has spiked too. Here’s how you can use digital wallets effectively for all your online transactions.
Of course, smartphones have made booking movie tickets, ordering food and paying for cabs so much easier. And now, you don’t even need to whip out your Debit Card or Credit Card every time either. Digital wallets have made the payments process way faster and convenient than before.
In today’s fast world, making payments with just a tap makes all the sense, right?
Additional Reading: All About Digital Wallets
What exactly is a digital wallet?
Digital wallets allow you to make payments online without having to access your bank account. Just load cash in your digital wallet and then use it for making payments. Today, digital wallet payments are accepted across online vendors, e-retailers, and for various other services such as making mobile bill payments, payments for cab services, etc. You can also use your digital wallet to make a purchase even on the move.
Types of digital wallets
Closed wallet: A closed wallet is offered by a retailer to purchase goods from their store only. Many e-retailers, like Myntra and Flipkart, have their own digital wallets. Telecom companies also offer closed wallets, like Airtel Ltd’s Airtel Money, Aircel’s Mobile Money and Tata Teleservices’ Ltd’s mRupee and Amazon’s Amazon Pay.
Semi-closed wallet: Semi-closed wallets allow you to make purchases across multiple vendors as per their approved merchant vendor listing.
Open wallet: Open wallets are provided by banks, allowing all functions of semi-closed wallets plus the added benefit of cash withdrawals at ATMs. Open wallets can only be issued by banks as of now.
Just like your regular wallet allows you to store more than just cash, you can also store loyalty card information and digital coupons along with cash in your digital wallet.
Additional Reading: An Introduction To Popular Digital Payment Platforms
Three reasons why you should be using a digital wallet
- Increased safety layers: Every time you make an online purchase, you pay either through net banking, Debit or Credit Card, thereby revealing your identity and financial details. Although the data is encrypted, you are still leaving a small window for your financial account to get compromised.
When using a wallet, you don’t need to access your bank accounts or cards for any purchases.
- Availability of discounts and loyalty: Using a digital wallet comes with the added advantage of special offers. Especially since digital wallets are in a growing phase, companies are offering discounts in terms of cash backs, exclusive deals and free DTH or mobile recharge top-ups to win more customers.
- Ease of usage: As per RBI guidelines, banks have no choice but to implement the two-factor authentication which includes providing your personal password and a one-time system-generated password to approve payments.
Sometimes, due to heavy traffic or lagging servers, you may not receive the one-time password (OTP) on time. This can delay your payments. Mobile wallets have no such hassles. The payments are quick and convenient once you’ve loaded cash into your wallet account.
Tips to keep your digital wallet safe
With e-wallet usage picking up steam, here are some tips to help you transact safely if you’ve never used one before:
- While installing an e-wallet, make sure you download the app from the app marketplace instead of the internet. This way you reduce the chances of installing a compromised app that can potentially put your personal data and money at risk.
- With your phone turning into a financial powerhouse, it’s important that you keep it secure, just like you would with your laptop or desktop, by installing anti-malware and anti-virus apps. Remember, your phone now contains your personal financial details. Any malware downloaded and installed by mistake could potentially steal your personal information, leading to unauthorised transactions.
- Some e-wallets do not ask for a two-factor authentication and let you transfer funds without any confirmation from your end. So, losing your phone could expose you to the risk of identity theft and financial loss. In order to protect yourself, it is imperative that you use a screen lock as well as an app lock on your phone.
- Most e-wallets keep you logged in once you start using them. To maintain safety, it would be wise to log out of your e-wallet every time you are done using it.
- What if all your safety measures fail to protect you? Your money will be at the mercy of the person who has your phone. To minimise this risk, you must always keep a low balance in your e-wallet. Anyway, you can top it up whenever you need to use it.
E-wallets are relatively new and there’s more work required to improve their safety features. However, they are certainly fast and easy to use and have definitely made payments smoother.
Psst! A Credit Card makes a perfect mate to an e-wallet. Explore our range of Credit Cards and pick your favourite.