Key terms related to digital wallets everyone should know
From cashback to tokenization, these 11 terms are a must-know for those who use digital wallets.
Whether it is for paying money to the neighbourhood kirana store or transferring a quick loan back to your friend, you’re probably using a digital wallet. India is fast becoming one of the largest markets for mobile payments with an expected 80% increase in digital transactions for the current fiscal year. With such unprecedented growth in the digital payments sphere, cash transactions are on their way to becoming obsolete, while digital wallets are on their way to becoming the most preferrred mode of payment. Hence, it is important for everyone to understand the key terms related to e-wallets to improve their experience and unlock their complete utility.
11 terms every m-Wallet user needs to know:
1) Open, semi-closed, and closed digital wallets
Open wallets let you transfer money, withdraw cash from ATMs, and purchase goods and services from vendors. They are issued by banks, and offer e-commerce tied up with a variety of e-tailers and offline retailers. M-Pesa, a collaboration between ICICI bank and Vodafone is an example of this.
Semi-closed wallets allows the users to buy goods and services at point of sale terminals. However, they do not let you withdraw cash. That being said, you can perform basic financial services at specified locations. The Bajaj Finserv Wallet is an example of this.
Closed wallets strictly allow financial transactions for a specified company only. They do not allow any kind of transactions outside the parent portal. With open wallets and semi-closed wallets, this type no longer exists.
Cashback is an incentive program that credits a certain percentage of the amount that you spend back into your digital wallet. This not only leads to savings, but also encourages you to use the digital wallet more frequently.
3) Pay by QR Code
This is a feature through which you can pay money at retail establishments with your smartphone and using your e-Wallet. It is a secure way of transacting as the debit/credit card details remain safe with you. Your phone simply scans a code (a square pattern) which then connects it to the relevant page. Since you’re not carrying a physical card or manually entering digits, there is limited scope for fraud.
4) Wallet Limit
This is the amount of virtual money that you can hold in your digital wallet. For example, you can hold Rs.10,000 in your MobiKwik Wallet, each month. In case you submit your KYC details, you can add up to Rs.1 lakh to your wallet.
5) Loyalty Money
This is a marketing strategy, wherein you get rewards for shopping or using the services of the same business establishments via your digital wallet.
6) Wallet Balance
This is the amount of virtual money available in your digital wallet at any point of time. Usually, digital wallets have a minimum balance, which they encourage users to maintain.
7) Auto Recharge
This may refer to two types of transactions within a digital wallet.
- It allows you to set a minimum balance for the wallet, below which your wallet gets automatically recharged with a pre-specified amount from your debit or credit card.
- It is an instruction you give your m-Wallet to recharge your phone or pay recurring bills like electricity or school fees.
8) Upgrade your Wallet
This refers to an app upgrade, where you get access to more services or a better digital wallet interface. It may simply require your Aadhaar number. It usually helps increase your monthly wallet limit apart from other conveniences.
9) Redeem Points
This refers to the use of loyalty points for purchasing goods or services on your digital wallet.
10) Split Bills
A service offered by mobile wallets, this helps you calculate who owes how much when more than one person spends money for a service or activity.
This is an extra layer of security for digital wallets in which your debit or credit card’s 16-digit number is replaced with another number called the token. This process helps to reduce the occurrence of frauds by making the financial transactions safer.
Now that you know the terms, upgrade your digital wallet experience by installing the Bajaj Finserv Wallet! It gives your exciting discounts on smartphones, clothes, home appliances, educational courses, medical services and much more along with EMI offers.