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.

This would be PayPal

Bank

Wallet Company

User

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

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

(c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.

Core Banking! Software

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

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

(c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.

Jane Bob
Branch A

Beth
Core Banking! Software Branch B

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

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

(c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.

Jane Bob
PayPal

Beth
Core Banking! Software Branch B

Branch A

A Wallet Company is assigned a Branch Status and it has its own eco system of users in it
Faisal Khan (Payments Consultant) http://about.me/faisal.khan (c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.

Jane
Core Banking! Software PayPal

Every transaction that Jane does within the PayPal Branch is internal to PayPal and any transaction she does external to her PayPal Branch is classied as an external transaction

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

(c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.

Janes Money

PayPal has an IOU for Janes Money

Who has my money?

Jane
Core Banking! Software PayPal

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 nancial benets of the money held in its sub-branch account with the bank they work with (interest earning, etc.)

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

(c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.

Bank

Wallet Company

PayPal" User

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

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

(c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.

Bank

Wallet Company

PayPal" User

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 even issue 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.

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

(c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.

Jane Bob
PayPal

Beth
Core Banking! Software Branch B Transfer between two accounts

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

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

(c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.

ACH
Users External! Bank Account

Bob
PayPal

PayPals Bank
When you attach your 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 le. 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 ACH deposit into your bank by PayPals bank.

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

(c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.

Bank

Wallet Company

PayPal" User

The front-end interface to the clients can be electronic or mobile or a combination of both. This is just a method of convenience. The Wallet Companys wallet software is what keeps your accounts, whilst the Bank keeps your money.

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

(c) Copyright 2013-2014. Faisal Khan & Company. All Rights Reserved.