India has always been a cash-based economy, where most transactions involve using physical currency over cards or other online transactions. This tradition continued until 2016, when the introduction of the Unified Payments Interface (UPI) coincided with demonetisation, the rise of accessible internet, and the increased adoption of smartphones propelled this digital payment system out of the stratosphere.
Today, in 2024, UPI is making strides in online transactions. With over 3 billion transactions every month and an estimated increase of up to 1 billion daily by 2026, UPI is the preferred payment method in India.
From street buskers to roadside stalls, autorickshaw drivers to 5-star hotels, today, UPI has been popularised to a never-before-seen extent due to the simplified and accessible payment apps with their user-friendly phone wallets. Here is how UPI and digital wallets are helping enhance online shopping in 2024.
What are digital wallets?
Digital wallets are online services and software programs that enable the transfer of digital currency or currency stored digitally, mainly peer-to-peer or peer-to-merchant, depending on the type of wallet. In addition to this transfer facility, digital wallets enable the secure storage of bank, debit card, or credit card details and the completion of transactions to a third party without hassle. They offer a safe and user-friendly way to make or receive payments without needing additional devices, as all transactions can be completed right from an app on your phone.
What are the benefits of using digital wallets?
Digital wallets have become immensely popular in India due to their benefits, which range from the convenience of not having to enter card details to the security of safe storage of funds and savings in cashback and instant discounts. Here are some of the key benefits of using digital wallets in 2024.
Convenience of Digital Wallets
- Easy Checkout Process
Making or receiving payments is simplified to ensure hassle-free payments from anywhere at any time with near-zero delay. In fact, scanning a QR code, inputting a PIN, and making the payment is much quicker than pulling out your wallet with the card, having the attendant manually choose the amount, inputting the PIN, waiting for confirmation, etc.
- Quick Access to Payment Information
With digital wallets, as the bank details are already stored, no one needs to keep entering the details before every transaction, making online shopping faster and more efficient.
- Integration with Shopping Apps, Vendors & Retailers
Most online shopping platforms have integrated options for accepting digital payments through e-wallets. In addition, local vendors, retailers, and stores offer the option to make payments by scanning a QR code.
Enhanced Security Features
- Encryption and Secure Transactions
E-wallets are encrypted with advanced technology, ensuring that transactions and stored data remain safe, significantly reducing the risk of unauthorized access.
- Two-Factor Authentication
Many wallets offer two-factor authentication (2FA) to enhance security further. This adds an extra layer of protection by requiring a second verification step, such as a code sent to the phone.
- Reduced Risk of Fraud
E-wallets help minimise the risk of fraud by keeping a history of past transactions, providing receipts for assurance after payment, and transferring funds directly to the other party’s bank, eliminating the space for fraudulent activity.
Savings and Rewards
- Cash Back Offers and Discounts
Many digital wallets offer exclusive cashback deals and discounts on your transactions, which can be stored and redeemed later.
- Loyalty Program Integration
Some app wallets offer credit points and a few added advantages to frequent users under their Loyalty Program.
- Tracking and Managing Expenses
Some digital wallet platforms offer options for tracking and managing expenses every month to encourage savings.
How do Digital Wallets compare to Traditional Payment Methods?
While traditional payment methods like debit/credit card payment or Netbanking have been reliable options for decades, the entry of digital wallets has brought a new level of convenience, speed, and security to transactions.
- Comparison with Credit/Debit Cards
The instant payment facility has been a game changer. You no longer need a physical card; the digital wallet is sufficient. Its security features are comparatively more advanced and accurate than traditional payment methods.
- Advantages Of Bank Transfers
Initially, bank transfers were the only option for making payments digitally. However, compared to bank transfers, an online wallet is quicker and more user-friendly. While bank transfers are much more secure and enable transactions of larger sums, making transactions takes longer in this case compared to instant transfer in UPI.
Popular Digital Wallet Options
The Indian market has been flooded with multiple digital wallets from various companies. Some major ones include Bajaj Pay by Bajaj Finserv, PhonePe, GPay, Airtel Pay, and Paytm. All these wallets not only help you complete transactions but also help with several other tasks like bill payment, account transfers, and mobile recharge. Since they are app-based, they become easier for you to manage.
Conclusion
Shopping online can be easy if you have a digital wallet. Almost all the major shopping platforms accept payments through their wallets, making online shopping easy and convenient. You will be happy with most of the leading wallet options, with the key differences being the UI and trust. However, many experts recommend using Bajaj Finserv for its security, speed, and convenience while also being a super app for all of your finance needs.
