Fintech Assignment

Title: Multichannel Digital Wallets

Name: Prachi Das Enrolment Number: 20BSP1623 Section: A

Q1. Submit a write-up on Multichannel Digital Wallets, applications supporting wallets,

onboarding and KYC Applications, Types of multichannel digital wallets.
Ans 1.
“If all of us start transacting through online and mobile banking, it will be out great
contribution towards eradicating corruption and black money from our country” – Narendra
Modi.
This starts, when people transact using different channels available like digital
wallets(hot/cold), QR codes, etc.
Let’s understand it one by one.
1. Digital Wallet
> An electronic device, online service, or software program that allows a person/business to
make automated transactions with another person/business bartering digital currency units for
goods and services.
> It was conventionally housed through a mobile app on a smartphone.
> Yet, it can also be used in a diversity of other formats such as a physical device or on your
personal computer.
> The smartphone app version of the digital wallet is by far the most popular today due to its
flexibility and mobility.
2. How does it work?
>It requires one to download a digital wallet app on your smartphone. It can be created by
one’s bank of choice or a trusted third party. For example- Paytm, PhonePe, etc.
> Then, find a point of sale (POS) system terminal that is suitable with one’s digital wallet in
order to use it. 
> One would be able to identify this through the contactless symbol demonstrated at checkout
or pay using Magnetic Secure Transmission technology.
> Once you have found out a POS system that is compatible with your digital wallet app, one
can simply hold his smartphone up near the sales terminal to pay. Sometimes he can even pay
directly through their app.
> This rule can also apply to some ATMs, where one can withdraw cash from the app when
in close proximity to a compatible ATM.
3. Different digital wallets
Digital wallets have been slowly gaining in acceptance over the years. There are a host of
digital wallet apps to choose from, available in different forms, like web-based, App-based,
etc.
For example- Apple Pay, clean, streamlined digital wallet app, app-based that is exclusively
for iPhone or Apple Watch users.
> It allows one to take part in transactions both in-store and online.
> In-store, one simply needs to verify identity using their smartphone's pin number or
FaceID, then hold their device near a compatible POS system to complete the transaction.

>One of the main benefits of Apple Pay is the ease of experience, allowing you to make
payments seamlessly and securely.

4. Applications Supporting it

There are literally hundreds of wallet apps out there competing for attention. Banks, credit
card companies and app developers are all trying to capture market share by creating the best,
or most familiar, digital wallet app or peer payment option for consumers. These are
classified as follows:-

Allied Google
Due Ayden Mozido
Wallet Wallet

Facebook Android
Venmo Snapcash Apple Pay
Messenger Pay

Samsung Microsoft Boost

Pay Wallet Mobile Mobi CoinBase

Coinapult
Coinomi Card and Bank
Wallets- ChasePay,
Loyalty and Gift
Cards-Keyring, Gyft,
Wallet Capitalone, etc. Paycloud, etc.
5. How to operate? KYC norms?
> A digital wallet saves card details of the user and lets him/her make purchases online. For
example, a MasterPass digital wallet asks its customers to first register for the service by
entering card details.
>The information then has to be approved through an OTP authentication process, post
which, registration will be complete.
>After this process is complete, one can choose the ‘Buy with MasterPass’ option as a
payment mode on e-commerce websites that have this option.
>The payment can be made by entering the MasterPass card ID and password and the
transaction will be authenticated through a 3D-secure pin or OTP.
> KYC stands for know your customer. It is a process by which a bank or financial institution
identifies and verifies you. To be KYC compliant, you must link your PAN card or Aadhar to
your account.
To become KYC compliant, here’s a step-by-step guide to doing it:
 Open Digital Wallet App like Paytm on your phone
 Go to settings and choose the update KYC option
 Enter your Aadhar details
 That’s it. Paytm will then validate your details and get back to you.
6. About Multi-channel digital wallets
> Digital wallets can be accessed through multiple channels i.e., channels that one can use to
pay digitally even from remote areas such as web based transactions, app based,
ussd(Unstructured supplementary service data), ivr(interactive voice response), QR codes,
self-help kiosk systems, E-NACH, SMS Pay Link.
> It’s all about offering your customers different online or mobile channels to pay to save
time and effort and money.
> With the help of payment gateways( institutions that provide facility to send payments to
and from consumers and bank with online and cashless transactions) and payment
processors(executes the transaction by transmitting data between you, the merchant; the
issuing bank (i.e., the bank that issued your customer’s credit card); and the acquiring bank
(i.e., your bank), performing digital transactions within few minutes becomes a quick service.
> To make payment hassle-free, such channels, and other different modes of payment are
coming into existence, to grow and expand the payment sector up to great lengths.
To conclude, these digital payments have become a source to reduce the costs of providing
people with financial services, as they have become a vital tool in improving financial
inclusion in the payment ecosystem with the expansion of fintech sector that’s reshaping the
financial services industry at large.

THANK
YOU