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 Karo’ 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 has become very popular.
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 fulfil 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 your email ID and mobile number.
Step 3: In order to transfer money to someone else, select the ‘Pay or Send’ option.
Step 4: You can make payments to others by scanning a QR code or via their phone number.
Paytm can let you do transactions offline
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 money offline. Just use the QR code or bar code option to pay someone, scan the code and you will receive an OTP, on your number to authorize offline payment.
Apart from Paytm, there are other digital wallets
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?
1.) Cashback, offers and discounts: While many debit and credit cards offer cashbacks and discounts, you need to have that specific card to avail certain offers. For instance some cards give offers on movies, come might give offers at restaurants. Whereas with digital wallets almost all wallets give a wide variety of cashback opportunities across different categories. For e.g. On Paytm you can get Rs. 65 cashback for bill payments above Rs. 500. On freecharge, you get a 10% cashback for booking tickets on BookMyShow.
2.) Easier transactions: You don’t need to authenticate transactions by typing in your card or bank details every time you make payments from your wallet, you only need to type in an OTP to authenticate yourself.
3.) 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 travelling. So the next time you’ve gone for a jog and need to buy some groceries, don’t worry if you forget your wallet just Paytm Karo!
5.) Digital Tracking: These wallets give you a passbook of your transactions on the app itself, this way you can help keep control on your spending.
Is it easier to use digital wallets over netbanking?
For day-to-day petty transactions like paying phone bills, paying a friend some money, shopping online, ordering food etc. a digital wallet is the better option because transact at 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). But use netbanking, for bigger amounts because its a safer option.
Despite the benefits why do people still prefer traditional wallets over digital wallets?
1.) Losing their 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 is 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 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 of 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.