Question

describe digital wallet,compare and contrast two types of e-wallet

Answer 1

A digital wallet, also referred to as an e-wallet, is a service that lets you pay for items, usually via a mobile device. It also holds a variety of other items that would contain a typical wallet, such as a driver's license, gift cards, entertainment event tickets and transportation passes. In certain cases , digital wallets are not only easier to use but are often widely recognized as more secure than a conventional wallet.

Closed Wallet and Semi-Closed Wallet

Companies like Flipkart.com, Makemytrip.com, Bookmyshow.com etc. issue their customers with closed wallets. The money deposited in such wallets can only be used for dealing with the companies that have issues with these wallets. Closed wallets are online accounts where cash is credited due to cancelation or return of a good or service in the case of a refund. Some businesses also gain interest on those deposits.

Semi-Closed Wallets are the most prevalent payment wallets in the network. Wallets are branded as semi-closed wallets, such as Paytm Wallet, Freecharge Wallet, Citrus, Oxygen etc. A semi-closed wallet has to be started and controlled with an RBI approval. These wallets can be used for online and offline transactions that include the purchase of products and services, financial services, fee transfers, premiums, etc. through / to retailers that have a clear arrangement with the issuer to accept the payment instruments.

Since such wallets are managed by non-bank agencies (banks and non-bank financial agencies are unable to issue semi-closed wallets), they are forced to deposit this money with a partner bank in an escrow account. Interest on these deposits depends on the contract between the payment firm and the bank.