Saturday, March 25, 2017

Too many wallets, not enough money.

 

The problem is cost

Looks like latest technology  startups are interested in are online money-wallets. You know, the system which allows you to keep some money in an online account, and use it for online payments. I guess, they identified something banks were totally unaware of , and built up a system to fill that up. But then, other startups too woke up, and started copying each other.  I only realized how crazy it had gotten when today I was trying to make an online payment, and got this screen.

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Thats 10 different wallets !  Some I had not even heard of. So I got curious and searched for ALL the online wallet systems available in India. And I got this:

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Yup. There are a lot of them. Even some mobile network companies (Airtel,Jio) have joined the race. Some banks have also released their apps. But I am not sure if they are solving the existign problems, or adding to users’ woes.

There has to now be some sort of regulation for these wallet guys. For one, there is now way to transfer money between these wallets, without first transferring to a bank. And some of them charge for those transfers. More on that later.

Second, money in the wallets do not accrue interest, like it does in your bank. That is one advantage the bank apps have.

Third, I am sure all these apps have security problems, specially on their andriod versions. Its only a matter of time before some or all of them get hacked. And the lack of IT security laws in this country means there is no proper protection to the end users.

And fourth, the ultimate problem is cost. These are all private players (except SBI). And they need to make their own profit. Which means sooner or later, they are gonna have to charge the customers for their service. What some online sites call “convenience charge”. Being in the IT business, guys like me know there are huge mulitlayered systems which power these online behemoths.  Even if they use open source, they will still need skilled programmers and support guys to power their frameworks. And all these are going to cost.

This is one advantage traditional cash transactions still have. There are no hidden charges. Unless they figure out a way to charge nominal to the customers, most of these apps are not going to survive.

 

 

 

PS: By they way, I have a PayTM account, the only wallet I used. Because they accept these at my company cafetaria.

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