Here's How You Can Make Safe Online Transactions!

Wednesday, September 03, 2014:  Online payment gateways are under major development phase right now. Reserve Bank of India (RBI) is publishing more secure guidelines to private and corporate banks to make their online payment gateway more secure. Some e-wallet, mobile payment services such as Airtel Money, Oxigen, ITZCash, YPayCash are being governed by RBI. The Payment and Settlement Systems Act is applied to all these systems.


Non-banking payment providers such as e-wallets, mobile payment services, YPayCash etc. issue payment instrument in form of e-wallet, internet account, plastic cards and sometimes paper vouchers. Ravi Jagannathan, MD and CEO of YPayCash said, “These semi closed payment systems are different than cash cards, prepaid cards issued by banks. These systems are specifically designed for some particular transaction task like, money transfer, DTH recharge, mobile recharges, bill payments etc. Users can load upto Rs 10,000 with just minimal verification documents but to load between Rs 10,000 to Rs 50,000 detailed procedure has to be followed, it is much more like KYC norms followed by banks.”

These services are provided by providers on website, mobile apps or their distributor’s outlets. You can sign up by providing KYC documents. These prepaid wallet or cards cannot hold the balance more than Rs 50,000. There are some sublimits on fund transfer. It varies from provider to provider. The validity of e-wallet, prepaid card varies from six month to one year depending upon the product.

For some users who have bank accounts with internet banking or a credit cards, it may not make sense to sign up for such additional services but according to Mr Surya, “Prepaid card is a tool for expense management. It is not linked to your savings account in bank and hence you have more control on your expenditure. In case your prepaid card, wallet or its sensitive information gets compromised, the risk and potential loss is less as compared to credit/debit card issued by banks.”

Users can make transaction from any location and anytime using internet. These services make sense in remote areas where there is lack of proper banking channels. Parents or relatives in small towns can use these systems to easily transfer the money to their children. Entrepreneurs can use these services to make electronic payment to their employees.

There are some extra charges that these services add during transactions. Like, ITZCash charges min Rs 5 to max 2% of the amount to mapped account or another user’s account. Airtel Money charges Rs 20-50 for loading amount over Rs 2,000 in mobile wallet using credit card.

Some private banks such as HDFC bank, Axis Bank, Kotak Mahindra Bank offers virtual cards for transaction. These banks allow user to create card with limited validity period. Users can make online purchases without worrying about threat to their savings account balance.