E-wallets to the rescue: How to turn credit card money into hard cash

And it is free if done through e-wallets. But wallet companies can block repeat offenders

 

Latest News - A few weeks earlier, Paytm had started charging its customers a two per cent fee for adding money to the wallet using their credit cards. However, the mobile wallet company withdrew the fee after a week, saying it would cause inconvenience to a large section of their customers.

So, how does one transfer credit card money into a bank account via an e-wallet? The mechanism is quite simple. A user sends money to the wallet through his credit card, say Rs 15,000. Well-established mobile wallets such as Paytm, MobiKwik and FreeCharge allow funds in the wallet to be sent to any bank account. All the person has to do is enter his account number and the National Electronic Funds Transfer (NEFT) code. He can send the entire Rs 15,000 to any bank account he wishes to. 

Most wallet companies don’t allow transfer of funds immediately. One can send the money to a bank account only after 48 hours. The best part: There are no charges on deposit or on withdrawal of money from the wallet. The wallet provider bears the cost. 

It’s a smart way to get a hassle-free loan. An individual does not need to fill up an application form, share documents, wait for the approval, and so on. There’s no fear of rejection because of a low credit score. It can also be at zero cost if the person pays back the issuer before the due date. To many, it may look line an easy credit line, but it’s not.

A few do it to earn points on their credit card without actually spending on anything. But banks have to report to the income-tax.(read more...)

Cash-short payment options grow

Quickly changing tack and game plan, online marketplaces and mobile wallets, 48 hours since the announcement of banning Rs 500 and Rs 1,000 notes, have been busy pushing old and new digital payment options.

The aim is to hold on to their cash-based customer base, as well as maintaining their gross merchandise value targets.

Online mobile wallet major Paytm is adding a feature of geo-locating all the offline points where their wallet is accepted. Snapdeal is now accepting payments via their mobile wallet, Freecharge, on delivery of the product.

With the cash on delivery (COD) customer base accounting for 60 per cent of total transactions, online marketplaces are eager to retain this customer base but minus the hassle of getting the cash back into the company. So, instead of COD, they are opting for mobile wallet on delivery, so that people who have stopped shopping as they are staunch believers of COD can have the satisfaction of paying only when they get the product at their doorstep. This, it is hoped, would help online marketplaces get back the customers they fear losing.

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