Mobile Wallets in India: A comparison

Published: November 16, 2016 at 9:45 am

Last Updated on

Here is a comparison of charges, limits and key features of mobile wallets in India. This is a guest post byPranav Date – the guy singularly responsible for making the monthly returns calculation such as this possible: November 2016: Equity Mutual Fund SIP, Lump sum returns & capture ratios.

The yapping below is mine. Pranav supplied the key data and insights which made this post possible. He does not endorse all my opinions about wallets 🙂

This is a companion post to Comparison: Options Available For Cashless Transaction

Mobile wallets are online accounts that enable a user to transfer cash from one person to another and make purchases (with/without a quick response code).  The Wallet companies earn by taking a cut off the purchase price. For example, Paytm charges merchants 1.99% + service tax on each sale. As of now, there are no charges involved in transferring money from a bank or credit card to wallet because they are betting on us spending it soon enough.

Therefore in order to compete with credit cards that offer reward points, the e-wallet firms offer a cashback. Since the idea of an instant discount is a lot more appealing than credit or reward points, there is an increase in their usage. Once the demonetization ripple settles down, it would be interesting to track

  1. if mobile wallets can overtake credit card usage. According to this report, their growth is significant but cards are still ahead
  2. how long the cash-backs last.
  3. if mobile credit cards (not pre-paid wallets) can make an impact.

Since there is no difference in terms of convenience between credit cards and e-wallets, it would be very interesting to see learn about developments in this space. From a distance, of course – I am a “direct” consumer 🙂

Before we begin the comparison, it is important to recognise that wallets are meant for spending. Wallets are not meant for transferring money to the bank. If you choose a wallet that has more tie-ups and offers more cashback, then you will have to pay a price for transferring money from wallet to your bank, and vice versa.

Also, the comparison is only with regard to the features, not the extent of cash-back offered or merchants they work with.

These wallets are governed by RBI rules. For “basic” users who have registered ID and address proof with the wallet issuer (KYC) can only transact up to 10,000 a month. For KYC compliant customers, this limit is one lakh or less. I think there is not much to differentiate wallets in terms of these limits.

Another common factor is that most (if not all) wallets can be loaded by net banking, credit and debit cards. Might as well use the cards without the wallets if we don’t care about cashback! QR code, Made with QR code, Made with

Wallets meant to make us spend more in search of fringe benefits like cash-back – a fancy word for peanuts thrown to the wallet user by the issuer and merchants to increase sales volume.

On that wonderfully optimistic note, here goes.

Disclosure: I started writing this post as I was reading about the wallets. Mid-way I realised that the key difference among wallets are how much discounts they offer and what they charge for transferring to the bank. The other limits are either mandated by RBI or are not too different to impact our choice. When the money hits our bank depends on whether the wallets use NEFT or IMPS. However, this is not a big deal.


Not only is there a 4%(+service  tax) (update:) 0% charge for transferring from wallet to bank, one can only transfer Rs. 500 per transaction and a max of Rs. 2000 a month.  Paytm has a similar charge before monetization and smartly reduced this to 1% (update 0%).  Read more here.

Citrus Wallet

This has no charge to transfer to banks but has a limit of Rs. 3000 a month. Merchant refunds up to Rs. 25,000 are supported. See rules here.


There is no charge for transferring to the bank but there is a limit of Rs. 2500. Very uninformative website – thumbs down.

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Probably one of the few wallet issuers likely to survive for next few years? They smartly reduced the wallet to transfer fee from 4% to 1% for all (buyers and merchants) immediately after demonetization and yesterday, made it 0% for KYC merchants* (and users)! On Nov. 9th they issued a two-page ad in the Hindu (and perhaps other dailies?) thanking the PM for the move – must have cost them anywhere between 20-25 Lakhs that day alone.

* Up to Dec 31st and this does not apply to merchants who gives ~2% of profits to Paytm. They can hike it back up to 4% once the drama dies down.

If you asked a small shop owner to accept Paytm money, please make them aware of these developments and implications. Hope they do not have to pay because we prefer “cashless”.

Although a user has to shell out 1%, they can transfer up to 25000 to the bank. This is a good deal for sellers instead of registering with them shelling out 2% to Paytm.

A simple glance at their site website is enough to recognise that they have one of the highest number of merchant tie-ups and attractive cash-backs (for now).


No charges for transfer to the bank. Max of Rs. 5000 in a single transaction and Rs. 25,000 a month.  Freecharge offers you a virtual MasterCard (pre-paid). ICICI Pockets also has one from Visa.

There are a few more (pre-paid) wallets, but at this point I am bored. Except for the transfer-to -bank fees; tie-ups they have, cash-back they offer, there is not much to differentiate among these.

Unified Payment Interface

I think the Unified Payment Interface is a better option (cheaper; faster and less restrictive) for those who do not think much about the discounts and like using mobiles for transacting.  Makes me wonder if the govt should have pushed the UPI harder, established it and then went ahead with the demonetization. Just an ignorant thought.

Virtual Credit Cards?

Correct me if I am wrong, but I think we do not have virtual credit cards like Samsun Pay in India. All we have is pre-paid cards tied with credit card companies. It would be interesting to see how they fare.

Personally, I like the idea of a virtual credit card because it offers me credit instead of a pre-paid wallet where the carrot is only cashback.

Parting thoughts

Wallets are meant for spending – (to be used) by those who can control urges.  However, just like a diversified portfolio, other forms of payment like NEFT, credit card and good old cash are equally important and relying too much on mobile is not a great idea.

I find it amusing that to get a cashback, I need a smartphone and an internet connection. Unless I have other uses for these  (yes , yes most people do), I am paying more than I think I am. As long as I have desktop payment gateways, NEFT, debit cards, credit cards and of course, cash, I don’t see any need for wallets or the UPI.

Over-reliance on any one technology, especially like a smartphone is always dangerous. We need to be diversified. Thank god for the RBI limits!

No one ever got rich by using coupons or focussing on cashback or reward points. They are fringe benefits. I would like to remind myself about that often.

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  1. Useful info about wallets. I didn’t know that Paytm reduced the 4% charge to 1% on Nov.9!!

    It may also be useful to inform readers that apart from wallets, there’s another smart option of getting paid online. It’s Instamojo which is not a wallet but simply gets your money in your bank account.

    Here’s an invite from Instamojo (with my sign-up code) that can get users a Rs 500 opening balance!!

  2. I use wallets in mobile only because they are easy to use and mobile friendly, all bank websites except ICICI have no mobile friendly login screen.

  3. Good Article. But in comparing wallets to credit cards, i think you missed on one feature, that you can load your wallet through credit card too, combining benefits credit and usage.

  4. HDFC offers Virtual Credit Card where we can create as many credit cards and use them instantly or upto expiry date. Those can be used for single transaction only and have assigned limit (assigned during creation of virtual credit card). However limit is blocked on credit card once virtual credit card is created and returned back when the first transaction happens or credit card expires.
    One of the advantage of using it that we can create virtual credit card for non-trust worth websites where we do not trust them in storing credit card info.

  5. Yes. You Can
    But you will not get Reward Point benefits from credit card if you do so. As almost all Credit card company do not allow this.
    Only one advantage is you can use that money; interest free for 1 month & your saving account/MOD account can earn some interest on it.

  6. Yes.
    You Can
    But you will not get Reward Point benefits from credit card if you do so. As almost all Credit card company do not allow this.
    Only one advantage is you can use that money; interest free for 1 month & your saving account/MOD account can earn some interest on it.

  7. I feel that if banks/govt spends money on awareness of UPI, no wallet would be able to match the convenience. If we have a barcode with UPI and our mobile banking app allows it to scan it, there would be nothing better than UPI.
    – UPI directly credits the money into bank account. No third party involved such as wallets.
    – UPI is by the bank/NPCI. So, in case of any issues we can directly check with them.
    – Until now, there are no transfer charges in UPI.
    – No need of adding the bank account. Also, UPI validates the Virtual Payment Address before transferring it.

    I just hope that everyone gets on the UPI bandwagon at the earliest.

  8. UPI is a good option as we don’t require account number, IFSC code etc. and waiting period for payee confirmation. one need to just enter VPA to whom payment needs to be done, enter amount , remark n done.. 🙂

  9. Debit Cards, UPI etc dip into your bank balance. For those interested using their Credit card and also get cashbacks, Wallets are good. Most Wallets can be used from Desktops and mobiles are NOT A MUST. By using Wallet, you limit exposing your Card details only to a limited # of websites and you can use the Wallet for innumerable websites reducing opportunities for hack. Wallets can be filled by any Dr/Cr Card for the exact amount when you need and you need not store any money there. Also, for Ola/Uber/Meru type of Cabs, this is the best not only because of any discounts, but also you never need to haggle with the driver for change/balance. Net Net, there are effective and efficient ways to use Wallets through Mobile as well as Desktops. User be smart to do that.

  10. I do not think there is any pain from you. It increases my ability to think deep in order make you understand the new generation tools 🙂

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