Mobile Wallet – Breaking New Grounds

By susheelkumar | June 3, 2016


Smartphones are creating a revolution of sorts with each passing year. As mobile technology grows at lightning speed, it continues to eliminate many physical and virtual gadgets. The transformation of a mobile phone into a smart device has been phenomenal. Just about a decade ago, mobile phones were merely known for their basic features such as calling and messaging (SMS), not to ignore utilities such as calculators and games. The addition of a camera, internet browsing capability and other high end tracking features such as GPS and so on, only to add to its versatility.

Today, the utility of this once upon a time humble mobile instrument has reached avenues which we could have not have imagined in the late 90s or the early 21st century. India has been one of the foremost countries to embrace mobile technology for banking transactions. Off late, the advent and rapid progress of Mobile Wallets has been redefining the way we pay for goods and services. Let’s learn more about this mobile based payment system that is giving cash and card payments, a run for their money.

What is a Mobile Wallet?

As simple as it sounds this is a mobile app based virtual wallet, used to make payments to offline and online merchants. As a holder of this wallet on your phone, you load money on it (through various channels such as net banking) and use it accordingly with service provider affiliated merchants to settle payments seamlessly. This eliminates a tangible exchange agent such as cards or cash. It’s quick, secure and of course, mobile! As a user, you can explore a plethora of ways to use the cash in your mobile wallet such as via apps, on websites, through SMS and tech based environments such as NFC (Near Field Technology).

Why use a Mobile Wallet?

Well, the benefits of using virtual mobile based apps to transact financially are many. One of the most visible advantages is the fact that it eliminates the need to carry hard currency or other negotiable instruments such as cards and cheques. It’s instant, secure and can be used without much hassle. Secondly, the user can avail of attractive discounts and goodies since most mobile wallets offer mind boggling deals that help you save money. Owing to the massive growth in technology, the penetration in terms of its outreach is growing at an exponential rate. You should not be surprised if your local kirana store accepts payments through mobile wallets!

Types of Mobile Wallets

Let’s explore the various genres of Mobile Wallets.

1) Open Wallet: Sits on top of the pyramid in terms of the utility factor. Here, you can not only buy goods and services (online & offline), but also use other core banking services such as cash withdrawals from ATMs and electronic money transfers. Open wallets also allow you to send money to bank accounts. Some examples are Citrus Wallet and Oxigen.

2) Semi-Open Wallet: Here, the user can buy goods and services at affiliated merchant establishments, both online and offline. The wallet service provider has tie-ups with merchants in various categories and offers products / services as an exclusive deal. You cannot withdraw cash or receive it back.  Think Airtel Money

3) Semi-Closed Wallet: Similar to semi-open wallets, here the service provider offers payment options to the user with partnered merchants and stores. The user can use virtual money to pay at select merchant outlets. However, cash transactions such as withdrawals will not be permitted. mPesa from Vodafone is an example of a semi-closed wallet.

4) Closed Wallet: As the name suggests, money held here can only be used to pay for goods and services offered by the company in question. It cannot be used outside the published network. This is offered by e-commerce companies to shop on their websites. Flipkart and BigBasket offer this facility.

Mobile wallets are here to stay. This industry has been witnessing some hectic activity over the last year or so, getting good attention, both from investors and users. If you’ve not tried it yet, we suggest you give it a shot and see how your day to day financial transactions can be a flawless affair.

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Category: Money Management

About Susheel Kumar

Susheel Kumar is a banking enthusiast. Based in Bengaluru, he has a bachelor’s degree in management from Bangalore University & over 6 years of combined professional experience in finance/accounting BPO & content writing. Susheel likes exploring the world of personal finance product offerings and curates resourceful articles, news & blogs for

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