Navigating the maze that is personal finance

Monday, 5 December 2016

Which mobile wallet to choose in India?

Mobile wallets are a relatively new phenomenon in India. Even so with the growing usage of smartphones, robust mobile internet penetration, growth of e-commerce sector and increasing disposable incomes, mobile wallet (m-wallet) use has been growing in India at a healthy clip.  According to a recent report by Assocham ‘The Indian m-wallet market in FY 2016 was around Rs. 154 crore, and it is expected to grow at a compounded annual growth rate (CAGR) of 141% during the period between 2015-16 to 2021-22 and reach till Rs. 30,000 crore by the end of FY 2022’.

What are mobile wallets?
These are digital wallets on your smartphone. M-wallets are primarily used in three ways (segments): transferring money from wallet to wallet, wallet to bank and vice versa; bill payment for services like mobile, DTH, electricity, water bills, etc.; paying insurance premiums, online shopping, ticket reservations, etc. The 3 segments contributed to 38%, 31% and 31% of the total mobile wallet revenues in 2016. 

The major mobile wallets players are Paytm, Freecharge, Mobikwik, Jio Money, Airtel Money and Pockets by ICICI. 

How do I choose which mobile wallet to use?
Given the large number of mobile wallets available out there I am sure that you have the question ‘which mobile wallet is the best for me’? There is not much to differentiate between these wallets if you look at the transaction limits. These wallets are regulated by RBI. So as a normal user you can transact up to Rs. 20,000 per month. For KYC compliant customers, this limit is one lakh or less.

One way to decide what wallet to use is to identity what you plan to use the wallet for. Your chosen wallet should be compatible with your most used apps. For example if you use Uber frequently, it makes sense to use paytm since it can be used to make payments for the trips made using the app.

Another way to decide can be the popularity of the wallet which can be gauged by the number of times it has been downloaded from the app stores.

The wallets typically charge a fee for transferring your money to your bank. Different wallets charge differently. So this can be another factor to help you decide. 

I am sharing the download stats and charges of some of the most popular wallets below.

Paytm
Paytm is short for Pay Through Mobile. It is the largest mobile commerce platform in India and has over over 1.6 crore customers. The Paytm App is available on IOS, Android, Blackberry & Windows and has been downloaded over 30 million times.

Transferring money from your Paytm Wallet to bank account is free till Dec 31, 2016 for merchants who are KYC compliant. All other users have to pay a fee of 1% to do so. (Paytm used to charge 4% for a non-KYC compliant user and 1% fee for a KYC compliant user.) You need to transfer a minimum of Rs. 100 to your bank account. You can transfer up to Rs. 5,000 at a time, the monthly limit being Rs. 25,000.

MobiKwik
MobiKwik is one of India’s largest mobile payments network that connects over 35 million users with 100,000 retailers.  It allows you to shop at your favorite stores, pay bills, recharge, send money and accept payments.  MobiKwik allows transfer from wallet to the bank up to INR 1000/-  per transaction and INR 2,000/-  per month. Total daily & monthly cumulative count of permitted transactions is 1 and 4 respectively.

MobiKwik has made it free to transfer money from your wallet to the bank account after demonetization. Earlier, it  used to charge 4% for a non-KYC compliant user and 1% fee for a KYC compliant user.

MobiKwik offers its customers a couple of unique ways to load cash into their wallet like Cash Pickup and Deposit at Bank features. Cash Pickup facility lets you add money to your Mobikwik wallet using their network of Cash Pickup agents. You can do this by raising a request on the App. The Deposit at Bank feature allows you to add money to your MobiKwik wallet offline by visiting your nearest ICICI bank.

FreeChargeFreecharge is owned by Snapdeal. It provides online facility to recharge any prepaid mobile phone in India. The amount paid by the user for recharge is returned in form of shopping coupons of some of the top retailers in India, thereby making the recharge virtually free.

Freecharge allows you to transfer Rs.5000 per transaction and maximum of Rs. 25,000 in a day to your bank account. In addition, the limit on withdrawal to your account per month is Rs. 25,000.

Freecharge has a number of unique features like FreeCharge Go which is a virtual card powered by MasterCard.  The virtual card  linked to your FreeCharge Balance and can be used to transact online on Indian websites like Snapdeal, BigBasket, Flipkart, Amazon etc. An important thing to keep in mind is that this card cannot be used to transact offline.

Freecharge also allow you to recharge, pay or send money to your friends using Whatsapp.  Such money transfers can only be done by and to Freecharge users and the feature is currently limited to Android users.

ICICI Pockets
Pockets by ICICI is an e-wallet powered by VISA. Pockets can be used by a customer of any bank can to recharge mobile, send money, shop anywhere, pay bills and much more.

The unique benefit of Pockets is that it comes with a physical shopping card which can be used to shop on any website or retail stores.

Airtel Money
Airtel Money is the flagship product of the newly launched Airtel Payments Bank. Like other semi-closed wallets you can load money and then use it for a host of services. You can send money, pay bills and recharge, directly from your mobile.

The unique benefit of Airtel Money is that you it works on any mobile model / handset. You do not need GPRS or a data plan. You just have to dial *400# and you will be able to use the menu.

Airtel Money has a slab wise pricing to send money to bank account. These charges are reproduced below:

Amount Transferred: Charges
<=50 : Rs2
51 – 1000 : Rs20
1001 – 2000 : Rs 40
2001 – 3000 : Rs60
3001 – 4000 : Rs80
4001 – 5000 : Rs100

Jio Money

Jio Money is the semi closed wallet provided by Reliance. JioMoney offers two types of accounts:

1.Basic Account: Transaction limit is capped at INR 20,000 per calendar month. No documents are required for 'Basic Account'.
2.Advanced Account: Premium customers can keep up to INR 100,000 stored in their JioMoney account for any calendar month, however you can do unlimited transactions above INR 100,000 for that calendar month.

So what mobile wallet do you use? Let me know in the comments section below.
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4 comments:

  1. Hi, can you tell what is the advantage of a mobile wallet over credit card.

    ReplyDelete
    Replies
    1. The main advantage of using a mobile wallet is that your liability is limited to Rs. 20000 for a non KYC compliant account and to Rs. 100000 for a KYC complaint account in case your account is compromised. In addition, you do not have to carry your physical wallet making it shopping offline more convenient.

      Delete
  2. Why not Chillr and other UPI apps thanks

    ReplyDelete
    Replies
    1. Hi Sri,

      There is no reason not to use the Chillr app, especially if it is compatible with other apps that you are using.

      You can use UPI apps provided by the banks as well. However, given that they have been introduced recently not many people are using them at this point in time.

      Delete

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