Post on 03-Jun-2018
8/12/2019 Concept of Mobile Wallet
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A Brief Introduction to
e/mobile Wallets
and how they work
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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
Core BankingSoftware
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
Core BankingSoftware
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
Core BankingSoftware
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.)
Core BankingSoftware
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.
Core BankingSoftware
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
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(c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.
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