ATM :: Navigating through the digital banking space

Banks, e-tailers and third-party independent companies are coming up with interesting options for customers
Rachna Monga Koppikar | November 29, 2015 Last Updated at 22:48 IST | Business Standard


Each time Anamika Singh shops online, it takes her 15 minutes to complete a transaction. A wedding and lifestyle photographer, she enters a debit card grid password, apart from a one-time password (OTP). If connectivity is slow, she starts the payment process all over again.

During her latest online purchase, she found a new payment option whereby she could make the payment via an e-wallet. She plans to soon use it. Pawan Saxena, her husband, however, remains wary of doing any online transactions, for fear of fraud.

Leading banks now provide technology-driven payment and money transfer solutions through social media platforms, e-mails, text messages or even by no more than a tap on a smartphone. Non-banking entities like e-commerce companies are offering electronic wallets. “Banking these days is no longer about opening accounts or increasing card usage. Every player wants its customers to transact more and provides them all possible ways of transactions using digital modes,” says Mudit Bhatnagar, marketing head at ItzCash Card, an Essel Group company offering prepaid card solutions.

E-wallets or prepaid instruments

E-wallets may be issued by banks, big e-tailers, third-party independent payment companies like Paytm or Citrus Payment Solutions, and by mobile operators. It is an online prepaid instrument, whereby you load money into this through your bank account, debit card or credit card.

Typically, three types of transactions are done – shop and pay online, pay online and use it offline or shop and use offline. “Our target is to offer digital payments for all three kinds of transactions,” says Kumar Aditya, vice-president at Paytm.

In semi-closed wallets, the maximum reloadable amount and the maximum balance every month is Rs 10,000. This can go up to Rs 50,000 or Rs 1 lakh in the wallet if you supply Know Your Customer (KYC) documents to the issuer.

A major attraction of these are cashback offers, discounts and deals. You spend Rs 500 and get a refund of Rs 70. You save money even as you spend. With almost 60 entities getting registered to provide online wallet services (according to the Reserve Bank of India’s website, as on October 28), choosing a prepaid wallet is a challenge in itself.

How to choose

Depending on the issuer, the wallet will have different features. For instance, one issued by an e-tailer might allow you to buy only its products, a closed wallet. So, you should load only that amount for which you are likely to shop at that retailer’s website. A semi-closed wallet, like Ola Money, will allow you to buy products or services with only its tie-up partners. Independent e-wallet providers like PayUmoney offer guaranteed savings of one per cent (as in you pay one per cent less than the purchase price). So, if you shop for Rs 30,000 through the PayUmoney wallet, you will certainly pay Rs 300 less, beside any other discount that might be offered by the merchandiser. “While the entire online industry is focused on getting online shoppers to spend more, on the promise of the highest ‘discounts’, PayUmoney thrives on savings,” says Virender Gupta, head of PayUmoney Wallet.

Bank-sponsored wallets have now started offering as many cash-back offers as third-party wallet issuers. They’ve also loaded a few banking features to their offerings. ICICI Bank’s Pockets wallet enables electronic payments through a smartphone at physical stores as well. “It’s a digital bank on your mobile phone. It combines e-commerce payments to any website or app in the country, people-to-people payments, gifting and offers,” says Abonty Banerjee, general manager and head, digital channels at the bank. Axis Bank’s’ GetonLime wallet has options like pool money for a group expenditure, a shared wallet so that family members can use the same one.

With HDFC Bank’s PayZapp application, instead of loading an e-wallet, customers can link any of their debit or credit cards to it. “PayZapp’s prepaid card can be used in any Visa/MasterCard merchant and is not limited to the select services the wallet provider offers. This exponentially opens up usage points for the customer as against any third-party service provider” says Parag Rao, the lender’s business head for card payment products.

Real-time transfer

While e-wallets allow you to transfer money to other bank accounts and other wallets, leading banks are also offering payment solutions through every digital medium.

For instance, State Bank of India has announced a plan to add ‘Batua’, a mobile wallet, to its existing mobile app, SBI Buddy.

Kotak Bank’s KayPay allows you to transfer money to friends without asking for their bank account details. You don’t have to be their customer and neither does the transferee need to have a Kotak account. You have to pick up names from your Facebook friends’ list, e-mail ID or their mobile number, authorise the amount to be paid and complete the transaction using an OTP. The bank says it has enrolled around 10,000 customers for the service.

ICICI Bank’s Pockets wallet also allows customers to transfer money through e-mail, Facebook or by mobile, using near-field communication to another smartphone in the vicinity. iMobile, its mobile banking app, allows cash withdrawals at an ATM without actually using a debit card. Its mVisa facility allows customers to scan a mVisa Quick Response code at a merchant location without swiping the card at the machine.

Most features offered by banks are targeted at youngsters, too. There are options like share or split bills, instant money transfer or sharing wallet accounts and payment of college fees.

Both ICICI Bank and Kotak Bank allow banking through social network site Twitter as well. “Our whole payment experience is built in a way that one doesn’t necessarily need an e-wallet for a frictionless transaction experience” says Deepak Sharma, head of digital initiatives at Kotak.

Competition among banks will only make things better for consumers. Apart from technologies like a sound-based payment system, HDFC Bank plans to launch MasterPass, a type of e-wallet that will store all your Mastercard details and while shopping, you can choose which card you want to pay with.

Mobile wallets/e-wallets

Bank-sponsored wallets
ICICI Pockets, Axis Lime, HDFC PayZapp, SBI Buddy

Third-party wallets
PayTM, PayUmoney, Oxigen, Citrus Pay

E-commerce wallets
Flipkart Wallet , Ola Money

Mobile Operators’ wallets
Airtel Money, Vodafone M pesa, Idea Money

Social ways to bank
Tweet to open fixed or recurring deposit accounts
Tweet and buy books or movie tickets
Send money to Facebook friends or email list
Pay through a debit card without swiping it
Share and pool money with friends, split bills and plan holidays

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