Socialising, with help of virtual wallets
FROM
BARTER system to online payments, modes of payment and transferring
money have seen many innovations. One of the more recent additions
to the line is a product by payments solutions company Oxigen
Services (India) Pvt. Ltd. Through its mobile wallet, Oxigen wallet,
users can transfer money to anyone through social media platforms
such as Facebook, Twitter, WhatsApp, Google+ and WeChat, among
others. “If the sender has an Oxigen wallet, she can send money to
any contact on their social media network even if the receiver does
not have a wallet,” said Pramod Saxena, founder and managing
director of the company. The receiver gets a link on their social
media account and will be prompted to open a wallet, if she does not
have a wallet, which is free. It the first wallet service over the
social media for which Oxigen has tied up with Singaporebased
Fastacash.
Similar
services are available in some countries already. For instance, Doku
Wallet in Indonesia also has a tie-up with Fastacash. The service
also allows users to make the transfer a gift and add videos, photos
and messages to it, which makes it, as Saxena said, “a cool
thing”. If the recipient does not open a wallet within seven days,
the money goes back to the sender’s wallet.
The
recipient also has the option to transfer the money to her bank
account. The service can be useful for small transfers for those who
do not have a bank account, said Saxena.
How
do wallets work?
A
mobile wallet is similar to a money wallet that a person carries,
but in a virtual form. It can be loaded with small amounts of cash.
According to the current Reserve Bank of India guidelines, a maximum
of ` 50,000 can be loaded in a mobile wallet, and a maximum of `
5,000 can be spent in one transaction.
A
wallet can be opened even by a person who doesn’t have a bank
account. For know-yourcustomer requirement, any one identification
document, such as Aadhaar, passport, driving licence, among others,
can be used. Money can be loaded online through Net banking, credit
or debit card or IMPS (immediate payment service).
The
wallet can be used online or at stores where the company has a
tie-up.
The
transaction charges vary from operator to operator. For instance, an
IMPS of up to ` 10,000 will cost roughly 2.5%, plus service charge.
But this varies across banks.
The
new money deal
Internationally,
the latest to join the wallet bandwagon is Apple Inc., which
introduced Apple Pay while launching
iPhone
6 earlier this month. In India, almost all telecom companies have a
wallet service. Apart from these, companies such as Paytm and One
MobiKwik, too, offer a wallet service.
“The
reason behind the hype around wallets now is the (increased) use of
smartphones,” said Bipin Preet Singh, founder and chief executive
officer, One MobiKwik. According to a recent report by GSMA
Intelligence, by 2020, two in every three phones worldwide will be
smartphones.
Already
India is the fourth largest market for hi- tech phones as of 2014.
According
to Singh, everyone including e-commerce giants is talking about
wallets because the ultimate aim of the companies is that users
should be able to do transactions on their phones.
But
why should one use a wallet when payments can be made through
Internet banking? Singh says that though mobile wallets also use
Internet, in a wallet transaction, only one entity—the wallet
provider—is involved, whereas in Net banking, there are multiple
parties involved, which increases the chances of transaction failure.
“After
all, it is about better consumer experience,” he said. Many people
are worried about exposing their bank accounts to the very real risk
of hacking and fraud, and wouldn’t want to do so especially when it
comes to small transactions, said Saxena. What should you do? Given
that online frauds are not uncommon, there seems to some logic in
using mobile wallets. However, at the time of t ransfer ring money to
the wallet online, the bank account is as vulnerable as in any other
transaction.
Therefore,
in some sense, the risk of exposure is capped at the amount of money
in wallets. “Technically, it is possible to attack at the time of
transfer,” said Pavan Duggal, a New Delhi-based cyber law expert.
According to him, the current legal regulations have guidelines
around electronic payments but not specifically for mobile payments.
He expects the government to address the space soon.
These
are early days for the mobile wallet service, and the space is
expected to see many innovations, both in terms of offerings and
legalities. Nevertheless, it is one more option available to
customers, among many others.
HT141004
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