concept of mobile wallet

8/12/2019 Concept of Mobile Wallet

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A Brief Introduction to

e/mobile Wallets

and how they work

Faisal Khan (Payments Consultant)http://about.me/faisal.khan

(c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.
http://about.me/faisal.khan


2/12

An electronic or mobile wallet is a layer on top of the traditional bank account layer

This would bePayPal

Bank Wallet Company User




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In a traditional banks core banking software, branches aredefined and within each branch

Core BankingSoftware




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Each Branch Level then has individual bank accountholders who bank at the particular branch


Branch B

Branch ABob

Jane

Beth




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A Wallet Company is assigned a Branch Status and it

has its own eco system of users in it


Branch B

PayPalBob

Jane

Beth

Branch A




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Every transaction that Jane does within the PayPal

Branch is internal to PayPal and any transaction

she does external to her PayPal Branch is classified

as an external transaction


PayPal

Jane




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Any money that Jane transfers to her PayPal account is essentially

held by the Bank that PayPal is working with and the custodian for the

money is the Bank (since PayPal is not a Bank). PayPal has all financial

benefits of the money held in its sub-branch account with the bank they

work with (interest earning, etc.)


PayPal

Jane

JanesMoney

PayPal has anIOU for Janes

Money Who has mymoney?




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So the earlier slide we saw of the Wallet Companywould look something like this

Bank Wallet CompanyPayPalUser




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So the bank can issue to PayPal, Debit Cards (since the money is with the Bank).

These Debit cards are branded for PayPal and given to the users. PayPal can evenissue a credit card, since both PayPal & the Bank have enough credit score

information about the user to take the risk. The risk would be underwritten by PayPal.

Bank Wallet CompanyPayPalUser




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Any transfer between two PayPal accounts is internal and has no feesassociated with. PayPal just makes an intra-bank funds transfer in its

banking software.


Branch B

PayPalBob

Jane

Beth

Transfer between

two accounts




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When you attachyour Bank Account to your PayPal account, you are essentially giving PayPal

permission to do ACH transaction from your external bank account and keep that reference on file.Any money you add to your PayPal account from your bank is deposited and held by PayPals Bank.

Any money you withdraw from your PayPal account to your Bank Account is essentially an ACHdeposit into your bank by PayPals bank.

Users ExternalBank Account

PayPal

Bob

ACH

PayPals Bank




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The front-end interface to the clients can be electronic or mobile or a combination ofboth. This is just a method of convenience. The Wallet Companys wallet software is

what keeps your accounts, whilst the Bank keeps your money.

Bank Wallet Company

PayPal

User



concept of mobile wallet

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