The pandemic has accelerated the use of online money transactions throughout the country. Because of that, more people are using mobile wallets today than at any time previously. Still, there appears to be a long way to go and authorities are working to ensure that most of the remaining population too quickly adopt digital payment. There are several benefits of this mode – easy to open a wallet, hassle-free process, and above all it can be done anytime, anywhere. Amid this, a question that is regularly being asked is whether mobile wallets would replace regular bank accounts in the future?
As of now, a sizeable population is yet to start using e-wallets. With more internet penetration, this can change but how fast can that be achieved is open to debate. Banks currently offer some services that these wallets don't. They allow money transfer from an account in one bank to an account in another bank. That is not yet available in e-wallets.
However, to be able to transfer money instantly, without visiting a bank branch or ATM, makes mobile wallets attractive. Also, the RBI has announced three key measures that could make e-wallets function exactly like banks, further boosting their popularity.
1. The RBI has allowed RTGS and NEFT facilities to their users.
2. It has made interoperability of mobile wallets mandatory so that people could transact between mobile wallets of different service providers.
3. It increased the maximum balance you can hold in your mobile wallets to Rs 2 lakh from Rs 1 lakh.
Announced in April, these steps are aimed at nudging people towards using digital money. But it is too early to suggest that mobile wallets can/will replace bank accounts as there are some issues that this system needs to tackle first.
1. Privacy: Some people find it difficult to change to a new mode of transaction, primarily because of trust issues. It will take some time to gain their confidence.
2. Security: People tend to lose their mobile phones and fear they may lose money too.
There are provisions in wallets to address these issues, but maybe they need to be more publicised.