After demonetization everyone started using Paytm, but what was the hype all about? Why not pay regularly through a credit/debit card or even cash?
If you are still wrapping your head around the entire Paytm trend, here’s a guide highlighting the important things you need to know about it:
What is Paytm ?
Paytm, an e-commerce company launched in August 2010 was initially a platform to recharge your mobile phone or pay utility bills. But now it offers consumers a wide variety of services out of which its Digital Wallet is pretty useful.
What is a digital wallet?
A digital wallet is a wallet on your phone/laptop to store & transfer cash, pay bills, buy movie tickets, shop and do all the things you would with a regular wallet. You can add up to Rs. 20,000 in your Paytm digital wallet and to increase this limit up to Rs. 1 Lakhs you need to fulfill a few KYC (Know Your Customer) processes.
How to create a Paytm Wallet?
Here is a 4 step guide for creating a Paytm Wallet:
Step 1: Set up your Paytm account using email ID and mobile number.
Step 3: In order to transfer money to someone else, select ‘Pay or Send’ option.
Step 4: You can make payments to others or to bank accounts on Paytm by scanning a QR code.You can also send money to another Paytm user via their phone number.
Paytm can let you do transactions offline too, here’s how:
In case your data is low or you don’t have access to the internet while you are shopping Paytm gives you the option to pay offline too. If the retailer accepts Paytm as payment mode you can use QR code or bar codes provided by him. Select the “Pay or Send” option and choose between QR Code or Barcode. Once you scan the code you will receive an OTP on your number to authorize offline payment.
Apart from Paytm, there are other digital wallets too:
Many companies licensed by RBI are coming up with digital wallets. Few banks have also come up with their own digital wallet. Some of them are Oxigen Wallet, FreeCharge Wallet, MobiKwik Wallet, PayUMoney, Vodafone M-paise, Citrus Pay, Jio Money.
Why do people use digital wallets when they can use their debit/credit cards?
There are many benefits of using digital wallets over debit/credit cards:
1.) Cashback: Specific cards also provide cashback but you need to buy that card to avail it. Whereas with digital wallets almost all wallets give a wide variety of cashback opportunities.
For e.g. On Paytm you can get Rs. 65 cashback for bill payments above Rs. 500
2.) Easier transactions: You don’t need to authenticate transactions every time you make payments from your wallet, you only need to type in an OTP to authenticate yourself
3.) Offers and Discounts: Paytm, Freecharge, etc. offers deals and discounts on certain websites.
For e.g. 10% cashback for booking tickets on BookMyShow if you pay using Freecharge.
4.) Convenience: Many local vendors, kirana stores, small shops might not accept cards but accept Paytm. With digital wallets, you do not need to carry tons of cash, plastic cards, or even queue up for ATM withdrawals. It’s a safer and easier spending option when you are traveling.
For e.g. You’ve gone for your jog with only your phone and suddenly you remember you need to buy some groceries for the night, using Paytm or any digital wallet you can just pay with your phone!
5.) Digital Tracking: These wallets help you track your money digitally on a regular basis and this can help keep a control on your spending.
Is it easier to use digital wallets over netbanking?
For small transactions like paying phone bills, paying a friend a small amount, shopping online, ordering food etc. a digital wallet is a more comfortable option because you can put through a transaction with a click whereas net banking transactions go through a two – step authentication (This means every time you make a transaction you need to type in your login password and also type in an OTP sent to your mobile number).
For bigger amounts that need to be transferred or received net banking is a safer option.
Despite the benefits why do people still prefer traditional wallets over digital wallets?
Despite the many benefits, there are a few cons to digital wallets:
1.) Losing your phone: If you lose your phone anyone can easily access your digital wallet.
2.) Identity Theft: There are people who can hack into your digital wallet and make payments on your behalf. These frauds are increasing as more and more people go digital.
3.) Inadequate and slow procedures to resolve problems: If people lose their money or problems occur while making payments the process to recover your money tedious and long. That’s why you should use digital wallets only for making small payments.
4.) Not many people are tech-savvy: People are stubborn with the ways they handle money. Suddenly hopping onto the digital trend might be difficult for someone who isn’t very tech savvy. That’s why many people still use the traditional modes of transferring money.
5.) Internet: To register on a digital wallet internet connection is required. Many remote areas have weak internet service or no internet at all cannot avail the benefits a digital wallet.
Now you see what the hype is all about? Try it yourself and see. If you still have any questions comment to let us know.