{"id":34001,"date":"2021-08-06T12:50:43","date_gmt":"2021-08-06T07:20:43","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=34001"},"modified":"2021-08-06T12:51:03","modified_gmt":"2021-08-06T07:21:03","slug":"close-and-semi-closed-wallet","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/close-and-semi-closed-wallet\/","title":{"rendered":"Close and Semi-closed Wallet: Know the Key Differences"},"content":{"rendered":"\n<p class=\"has-drop-cap\">A digital wallet, broadly known as an e-wallet is a software-oriented system that securely spares consumer\u2019s payment details and passwords for various payment methods and websites. Digital wallets have mitigated the requirement of carrying physical wallets by storing payment detail promptly and securely. Besides, digital wallets are a boon to industries that amass consumer data. The digital wallet falls under three vital categories i.e. closed, semi-closed, and open. Technically, to facilitate such services to end-users one has to obtain <a href=\"https:\/\/corpbiz.io\/prepaid-wallet-license\"><strong>Prepaid wallet License<\/strong><\/a> from RBI. In this write-up, we will look into key differences between a close and semi-closed wallet<\/p>\n\n\n\n<p><strong><em>Key points to ponder<\/em><\/strong><\/p>\n\n\n\n<ul><li>Digital Wallet refers to a financial tool that enables end-users to store funds, make or receive payment, &amp; keep the tap on the payment histories <\/li><li>These tools cum software may be incorporated in the bank\u2019s mobile application oras a payment platform like Pay TM or Alipay.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Types of Digital Wallets<\/h2>\n\n\n\n<p><em><strong>Following are the different versions of Digital Wallets <\/strong><\/em><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"998\" height=\"407\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/08\/Types-of-Digital-Wallets.png\" alt=\"Types of Digital Wallets\" class=\"wp-image-34060\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/08\/Types-of-Digital-Wallets.png 998w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/08\/Types-of-Digital-Wallets-300x122.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/08\/Types-of-Digital-Wallets-768x313.png 768w\" sizes=\"(max-width: 998px) 100vw, 998px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">1. Closed Wallet<\/h3>\n\n\n\n<p>A company selling items or services can create\na close wallet for end-users. Users of a close wallet can use the spared funds\nto make online transactions with the issuer of the wallet. The money from\nreturns, cancellations, or refunds finds its way to a secured server, which is\naccessible on the wallet as well. Amazon pay is the best possible example of a\nclosed wallet. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Semi-closed Wallet<\/h3>\n\n\n\n<p>A semi-closed wallet enables end-users to make transactions at listed merchants &amp; locations. Although these wallets lack widespread applicability, both online &amp; offline buying can be done via them. But, merchants need to sign contracts or agreements with the issuers for accepting payments from the mobile wallets. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Open Wallet<\/h3>\n\n\n\n<p>Banks or institutions working in partnership\nwith banks issues open wallet. <\/p>\n\n\n\n<p>Users having open wallets can utilize them for all transactions permitted with a semi-closed wallet in addition to the transfer of funds and withdrawal of funds from ATMs and bank <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/online-payment-bank-license-things-you-need-to-know\/\">Payment Bank License \u2013 Things you need to Know <\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Difference between Closed and Semi-Closed Wallet<\/h2>\n\n\n\n<ul><li>The concept of E-wallets is not new for Indian consumers. E-wallet services find its way into the Indian market about a decade back and since then it has been secured a massive pool of consumer. Digital wallet is aggressively used in the e-commerce industry and has become a viable alternative to payment banks. <\/li><li>A close wallet is more of platform-specific wallet services facilitated by the service providers to its customers. It is mainly used by web-based companies to garner a loyal customer base. It allows customers to make prompt payments and earn available cash backs. <\/li><li>In semi-closed wallets, one can do online shopping and send money to another recipient in the same wallet network. Such a wallet also enables users to transfer a prescribed amount of wallet balance to their legit bank account.<\/li><li>Semi-closed wallet has a widespread reach in the Indian market. These wallets have transformed the way people make payments against online services. Semi-wallets are prompt and secure in comparison to other counterparts. Moreover, such a wallet facilitates swift transactions and seamless refunds. Widespread adoption is another vital factor that contributes to the massive growth of semi-wallet in India. <\/li><li>A closed wallet has limited applicability and it caters to a limited pool of customers. <strong><em>Myntra<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Myntra\"><strong><em>[1]<\/em><\/strong><\/a><\/sup> wallet or Amazon Wallet is a common example of a closed wallet. It is important to note down that a closed wallet doesn\u2019t offer benefits like cash withdrawal or redemption to the customers <\/li><li>Semi-close wallets are extensively used in India owing to their matchless flexibility and widespread applicability. Wallet services such as Citrus, Paytm, Free charge, Oxygen, etc are the best example of semi-closed wallets. A Reserve Bank approval is mandatory for startinga semi-closed wallet service in India. <\/li><li>These wallets can be utilized to transact online &amp; offline which includes availing online services, buying goods online, availing financial services, paying fees, premiums, etc. via\/to the merchant which have a legal contract with the issuer to accept payment instruments<\/li><li>Since such wallets are administered by agencies other than banks, they are mandated to send this money to the escrow account with a partner bank. Interest applicable to such deposits varies in accordance with the terms of the agreement between the bank and payment company. <\/li><\/ul>\n\n\n\n<p><strong><em>The prepaid payment instrument is classified\ninto four important categories i,e. <\/em><\/strong><\/p>\n\n\n\n<ul><li>Closed system payment instruments<\/li><li>Semi-Closed system payment instruments<\/li><li>Semi-Open system payment instruments &amp;<\/li><li>Open system payment instruments<\/li><\/ul>\n\n\n\n<p>Closed system payment instruments refer to the\npayment instruments typically bestowed by the businesses for use at their\nestablishment only. Such instruments do not render services like cash\nwithdrawal or redemption. Free charge credit, Ola money falls under this\ncategory, <\/p>\n\n\n\n<p>These tools are redeemable at an identified merchant locations which contract specifically with the issuer to accept the payment instrument. Further, these tools do not allow cash withdrawal or redemption by the holder. The leading platform Pay TM comes under this category. <\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  <strong><em>CLOSED WALLET<\/em><\/strong>\n  <\/td><td>\n  <strong><em>SEMI-CLOSED WALLET<\/em><\/strong>\n  <\/td><\/tr><tr><td>\n  Closed Wallet refers to an e-wallet\n  granted by an entity to a client for buying goods &amp; services exclusively\n  from that entity\n  <br>\n  Examples: \u2013 Amazon.in, Clear trip\n  <\/td><td>\n  Semi-Closed Wallet is an e-wallet\n  that can be utilized to purchase goods and services, as it is a payment\n  instrument that is redeemable at identified merchant locations that contract\n  specifically with the issuer to accept the payment instrument\n  &nbsp;\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  Closed Wallet can be utilized \u2013\n  To receive funds and cashback\n  To purchase only from issuer\n  merchant\n  To pay the seller of issuer merchant\n  <\/td><td>\n  Semi-Closed Wallet can be used \u2013\n  To pay affiliated merchants against\n  the goods and services purchased. \n  To purchase goods &amp; services\n  from the issuer\n  To transfer funds between users\n  <\/td><\/tr><tr><td>\n  Cash Withdrawal is not possible for\n  the users of closed wallet \n  <\/td><td>\n  Cash Withdrawal is not possible for\n  the users of the semi-closed wallet\n  <\/td><\/tr><tr><td>\n  Not explicitly prohibited.\n  Permissibility is unclear and will depend on the type of transaction.\n  <\/td><td>\n  Allowed for full KYC semi-closed Not\n  for min-KYC semi-closed e-wallets\n  <\/td><\/tr><tr><td>\n  RBI authorization or PPI License is\n  not a compulsion for clients seeking to leverage closed wallet \n  <\/td><td>\n  Banks can work without a PPI license.\n  But the same is not true with Non-bank entities<br>\n  <br>\n  \n  <\/td><\/tr><tr><td>\n  Given person to merchant spending, the\n  transaction under closed wallet only existsbetween wallet holder and issuer. \n  <\/td><td>\n  Allowed only with contracted\n  merchants&nbsp; for example PhonePe, and\n  Mobikwik\n  <\/td><\/tr><tr><td>\n  Interoperability is not applicable\n  on Closed wallet \n  <\/td><td>\n  Interoperability is permitted only\n  for full-KYC semi-closed wallets\n  <\/td><\/tr><tr><td><\/td><td><\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion <\/h2>\n\n\n\n<p>Closed and semi-closed wallet serves different purposes. Where transaction under closed wallet only occurs between the wallet holders and issuer, the semi-closed wallet allows its users to transact money via issuer as well as connected merchants. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/documents-required-for-payment-banks-license-india\/\">Know the List of Documents Required for Payment Banks License <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A digital wallet, broadly known as an e-wallet is a software-oriented system that securely spares consumer\u2019s payment details and passwords for various payment methods and websites. Digital wallets have mitigated the requirement of carrying physical wallets by storing payment detail promptly and securely. Besides, digital wallets are a boon to industries that amass consumer data. [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":34063,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[330],"tags":[1902],"acf":{"service_id":"72"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":21033,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/34001"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=34001"}],"version-history":[{"count":46,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/34001\/revisions"}],"predecessor-version":[{"id":34066,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/34001\/revisions\/34066"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/34063"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=34001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=34001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=34001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}