It is tough enough to keep track of your money, but these days it is harder to keep count of wallets. Virtually, every large e-tailer today operates its own payments wallet, as do some taxi aggregators, several banks, a clutch of telcos and a bunch of pure-play wallet companies. With the competition keener than ever, it is becoming common practice for players—whether a bank or an e-tailer—to restrict customers from using ‘other’ wallets on their sites. A State Bank of India (SBI), for instance, doesn’t take kindly to its customers loading cash on to Paytm’s wallet rather than its own Buddy. While the lender has voiced its objections openly, other banks and e-tailers are fighting the competition quietly, citing for example, security concerns. Banks were always expected to use whatever clout they had to keep customers on their wallets since this keeps the float with them, but it is surprising that e-retailers are choosing to keep out ‘alien’ wallets from their sites. The biggest losers in this have been the pure-play wallet companies; hoping to beat the restrictions, Oxigen, last week, teamed up with Visa and a bank to offer its customers a virtual pre-paid card that can be used to transact on all websites. Others are planning to do the same since virtual cards are unlikely to be blocked out and moreover, customers should find it less cumbersome to use one virtual card rather than half a dozen wallets.
Such restrictions are both anti-competitive and prevent the sector from growing. Mobile telephony, for instance, only grew after telcos were mandated to interconnect; branchless banking took a bigger leap after ATMs of each bank could be accessed by clients of other banks. Whether or not ‘wallets’ want to charge users is a commercial decision—e-tailers charging other ‘wallets’ accessing their sites does look odd given the basic business is almost solely driven by discounting—but if this situation continues, the government/RBI will have to step in and lay down regulations on inter-operability and charges. The industry would do well to get together and pull down whatever walls have been built and not erect any new ones.