Almost 6 months after receiving a semi-closed prepaid wallet license, and five months after Mobikwik launched theirs, One97’s digital payments company Paytm has launched its semi closed mobile wallet Paytm Cash Wallet. This wallet differs from “Paytm Cash”, its closed wallet system: while the closed wallet can only be used to purchase services provided on Paytm, it cannot be used to purchase third party goods and services. More on the types of wallets below.
The semi closed wallet allows Paytm to allow users to pay postpaid and utility bills using the wallet, and bring on board third party vendors and expand the portfolio of goods and services on offer, and build the digital goods marketplace it has planned. In addition, as per the FAQ’s, it plans to allow customers to shop of websites on third party websites and apps. Bear in mind that the wallet space is getting crowded: telecom operators like Airtel, Vodafone and Idea Cellular have their own wallets, as do other companies like My Money, Mobikwik, Atom, Payworld, Paymate, Oxigen, Times ofMoney, Zipcash, among others. Online marketplace Flipkart has also applied for a prepaid wallets license.
Transitioning Users & Cash In Inactive Accounts
The tricky part of the launch of this wallet for Paytm will be transitioning users from the closed wallet (explained below) to the semi closed wallet. They cannot just transfer the cash from the closed to the semi closed wallet, so we wonder how they will manage the confusion around customers having both wallets at the same time. Perhaps one solution will be to allow customers to make a part of the transaction via the closed wallet (and empty it out), and the remainder with Paytm Cash.
What would also be interesting to learn is how many inactive wallet accounts Paytm has, and what it does with that money. Paytm is yet to respond to a query sent by MediaNama last week (following a Techcircle story) on the inactive wallet users that have been inactive for 6 months, and the unused balance in inactive wallets. How do telecom operators deal with this?
We’d requested Paytm for the following data, and will update in case they respond:
– Total number of active users (and monthly trends, if possible)
– Total transacting users (and monthly trends, if possible)
– Total number of transactions (and monthly trends, if possible)
– Total amount transacted (and monthly trends, if possible)
– Number of wallet users at the end of December 2013
– Active wallet users in December 2013
– Total wallet transactions in December 2013
– Amount transacted by wallet users in December 2013
– Inactive wallet users that have been inactive for 6 months
– Unused balance in inactive wallets
Realistically, we can’t expect them to share such granular data, but the number of wallets, wallet transactions, inactive wallet users and how they deal with inactive wallets would be useful. Nextbigwhat has some data on types of Paytm transactions.
Types of Pre-paid Wallet Instruments
1. Closed System Payment Instruments, which are not reloadable with cash and do not permit cash withdrawal (for example: phone calling, prepaid voucher and gift vouchers)
2. Semi-Closed System Payment Instruments, used at merchant locations, and which can be reloaded, but do not allow cash withdrawal (for example: cash cards and smart cards)
3. Semi-Open System Payment Instruments: these can be reloadable or non-reloadable, and can be used at any point-of-sale terminal, but they do not allow cash withdrawal. For example: gift cards issued by banks
4. Open System Payment Instruments: these can be re-loadable or non-reloadable, but most importantly, they permit cash withdrawal at ATMs. Examples of such cards are the Payroll cards and travel cards