Types of e-wallets
e-wallets are of three kinds:
- Closed e-wallets: Closed e-wallets can be used for making payments for the services provided by the wallet issuer. It cannot be used for making payments to any third party service provider. They do not have a cash withdrawal facility. The money credited into a closed e-wallet has to be used for making payment to the wallet issuer only. Uber Credits is a closed e-wallet that can be used for making payments for hiring cabs only.
- Semi-closed e-wallets: These are e-wallets that can be used for shopping and virtual fund transfer to another user in the same wallet network. These e-wallets can be used only for those merchants who are registered with the e-wallet provider. They do not permit cash withdrawal by the owner. Semi-closed e-wallets are very popular in India and are mostly used for online shopping. The best example of a semi-closed e-wallet is PayTM.
- Open e-wallets: Open e-wallets are similar to a prepaid card, but available online. They are issued by a bank with a pre-funded amount. The e-wallets can be used up to the pre-funded amount. They can also be used for cash withdrawal. They can be reloaded once the pre-funded amount is used up.