Mobile Wallet:

mobile-based virtual wallet, where you preload a certain amount in your account
created with the mobile wallet service provider, and spend it at online and offline
merchants listed with the mobile wallet service provider.
Types of Wallets:
1) Open: allow you to buy good and services, withdraw cash at ATMs or banks and
transfer funds. Eg : M-Pesa by Vodafone and ICICI.
Also allows money to be sent to other mobile number accounts.
2) Semi-Open: Allows to transact with merchants with which mobile service
providers have contract. Eg. Airtel Money. Cant withraw cash or get it back.
3) Semi-Closed: like PayTM, which do not permit cash withdrawal or
redemption, but allow you to buy goods and services at listed merchants and
perform financial services at listed locations.
4) Closed: common with e-commerce companies.
What happens when you deposit money ?

we create an escrow account in which your preloaded amount is deposited. Only

when you make a payment, the respec tive amount is credited to PayTM account. We
don't have any control over your money, so there is no question of the service
provider running away with the customer's money."
Mertis:
Your wallet can be snatched, misplaced or pickpocketed, your mobile wallet
cannot be. But remember, your mobile can still be stolen.

Secondly, if the bill is of Rs 353.53 or Rs 462.65, you will not have to run
around asking for change, and no one will ever give you a candy instead of a
rupee.

Also, mobile wallets allow you to pay in one-tap unlike net banking that calls
for opening several browsers and are time consuming.

When you r paying on merchants website using debit/credit card or

netbanking you are disclosing sensitive data, which is not the case with
mobile wallets.

They also offer high discount rates.

Demerits:
Only mobile-savvy people can use it
Limited number of merchants listed
Constraints on the battery-back up of the phone : u wont be sure
whether the mobile will be alive for that one-tap

Limit on the amount u can deposit and spend in a day.