The advancements in technology have eliminated the traditional methods of performing transactions using cash and loose money. Now, mobile phones have taken the roles of cheques, credit and debit cards, etc. in a smart and digital manner. With the introduction of digital wallets, people have started using mobile payment applications like Paytm for performing everyday transactions. Paytm, one of the most popular payment apps, is paving the way forward by allowing users to make faster, smarter, and safer payments via UPI and digital wallets.
Table of content
- What is a digital wallet?
- Why are digital wallet applications trending?
- Benefits of digital wallets
- Types of digital wallets
- Features of digital wallets
- How do digital wallets work?
- What can be done from a digital wallet
- What is so special about the Paytm application digital wallet?
- Is it safe to use a digital wallet?
In this blog, we will understand everything about digital wallets, how they work, their advantages, and limitations.
What is a Digital Wallet?
A digital wallet is a digital version of a traditional or physical wallet. Users can use a digital wallet to make transactions such as bill payments, mobile recharges, travel/movie bookings, money transfer from one bank account to another, among many others.
- Digital wallets enable users to make quick payments online
- Users can use digital wallets to book train/flight tickets, complete mobile recharge transactions, pay electricity bills, book gas cylinders, etc.
- A digital wallet requires a user to add money from a linked bank account
- These wallets are secure and can be used for all sorts of transactions
- To complete digital wallet transactions, one must have a smartphone, a payment app such as Paytm, and an internet connection
Why are Digital Wallets Popular- The Benefits
Digital wallets have gained enough popularity owing to the multiple benefits that they offer. Let’s take a look at them in detail-
- Secure – Digital wallets are secure as they are password-protected. Moreover, to complete the transaction using the digital wallet application, the user must enter the password, which ensures that nobody else can perform transactions from your digital wallet. Apps such as Paytm require biometric authentication, resulting offering additional security
- No minimum balance requirement- There is no requirement for a minimum balance in digital wallets. You can simply add the desired amount to the wallet and no penalty will be charged on a low or zero balance
- Quick transactions- Digital wallets process the transactions within seconds. Digital wallet apps like Paytm are simple to use and do not require a lengthy process to complete transactions
- No additional charges involved- There is no cost levied on a user to use a digital wallet. It is available for use for as long as the user requires it
- Ease of use – One can use digital wallets to make payments from anywhere and at any time. Digital wallet apps require only a smartphone, an internet connection, and a linked bank account
- Perform multiple transactions- One can perform all sorts of online transactions such as paying the bills of electricity, gas, mobile, etc. through digital wallets. Users can also perform transactions using a digital wallet by scanning the QR code at the point of sale or by adding a mobile number
What are the Types of Digital Wallets?
Listed below are the types of digital wallets-
- A closed wallet enables users to make payments via an app or website
- They are typically created by businesses that sell products or services to their customers
- Users of a closed wallet can only use the stored funds to complete a transaction with the wallet’s issuer
- If a transaction is canceled or a refund is issued, the entire amount is stored in the wallet
- Closed wallets do not allow users to make payments outside of the wallet
- A semi-closed wallet allows users to easily perform transactions at merchants
- Semi-closed wallets have a limited coverage area
- To accept payment from the wallet, merchants must accept the contract or agreement with the issuer
- Banks provide open wallets which can be used to perform any type of transaction
- Open wallets offer the flexibility to transfer funds easily
- Payments can be made online and in-store at any time
- The open e-wallets service provider allows users to conduct transactions from anywhere in the world; however, both the sender and the receiver must have accounts on the same application
What are the Features of Digital Wallets?
When it comes to digital wallets, there are a plethora of features that have made them a market favorite. The following features are a summary of any payment application and may vary depending on the digital payment application.
Easy registration process
Users can easily create an account with a digital wallet app like Paytm without having to pay any hidden charges or fees. All a user needs to do is follow the instructions-
- Install the Paytm app on your mobile phone
- Log in to the application using either your mobile phone number or your email address
- Enter the OTP to confirm and complete the registration process
- Connect the digital wallet to your preferred bank account of your choice
- Add the desired amount to your digital wallet and perform any transaction!
Digital wallets are clad with QR technology using which a user can simply scan the QR code and make transactions conveniently.
Simplified payment Process
Users can easily pay their electricity, gas, and mobile phone bills using digital wallets. Apart from this, these wallets can be used to book flights, train tickets, and other services. Users can also enable alerts and auto-payment options for timely payment.
E-wallets, also known as digital wallets, are designed with the best features and simple UI for easy and safe transactions. The simplified user interface makes it easier for users to perform and track their transactions. Furthermore, fund transfers, adding money to the wallet, checking balance, and other functions can be done effortlessly.
Chatbots for real-time assistance
The incorporation of chatbots into digital wallets enables businesses to communicate with their customers at any time and from any location. Customers can also easily connect with the 24*7 customer support services of their digital wallet apps in real-time to register their queries about a product or service.
Uses of a Digital Wallet
A number of transactions given below can be done effortlessly from a digital wallet application-
- Bill payments for electricity, gas/cylinder, mobile bills, etc.
- Travel bookings for flights, trains, hotels, etc.
- E-commerce transactions
- Payment at Point of Sale
- Transferring funds to another account or bank account
- Foreign remittances under some guidelines
- Buy subscriptions
Why Use Paytm Digital Wallet?
Paytm is one of the most popular digital payment applications in India. It provides its customers with the financial convenience of transferring money, making payments, opening bank accounts, investing, etc. through a single digital wallet. The following are the reasons why you should use the Paytm wallet to perform transactions-
- Paytm wallet is simple to use; it has clear instructions for users to perform various types of transactions which does not confuse the user
- Paytm does not charge any additional charges to use the Paytm wallet or its associated services
- There is no minimum balance requirement for using the Paytm wallet
- Paytm’s new ‘Automatic Add Money’ feature automatically adds an amount from the linked bank account whenever the wallet balance falls below the set limit
- The automatic add money feature eliminates the need to enter a PIN/OTP in order to add money. The automatic add money feature, which can be enabled via PPBL or UPI, allows users to complete transactions with just one click across 20+ million merchants
- Paytm wallet allows users to complete POS, online, and fund transfer transactions
How to Choose the Best Digital Wallet?
Before selecting digital wallets, the following factors should be considered:
- Ensure that the digital wallet is safe and secure to use
- Check to see if there are additional charges on using the digital wallet and its associated services
- Make sure that the registration process on the app is not too lengthy or complicated
- In general, digital wallets do not limit the types of payments that can be made; however, it is important to determine whether the wallet issuer provides users with a closed, semi-closed, or open wallet
- Compare the features of various digital wallet applications to determine which one provides the most transaction flexibility
- Do not disregard user feedback on the performance of the digital wallet
- Never download the digital wallet from a third-party or spammy website
Final call- Is it Safe to Use a Digital Wallet?
Digital wallets like Paytm are absolutely safe and secure to use. When it comes to Paytm wallet, it is extremely secure, thanks to cutting-edge technology and a well-designed payment gateway. Furthermore, all of the users’ information is stored in the wallet with all of the security measures in place, without any risk of information leakage. The Paytm wallet’s user interface is simple to use. We advise you to install the Paytm application today and explore its digital wallet and many more features on your own!