How do you design a payment system for a digital wallet?

There are lot of payment methods available. The first most thing is to identify your users. Users can be individual, a business man, organisation etc. This is more important to fix the target audience. Based on that we can select the method. Based on payment method the regulatory and legal requirements will change like Credit cards we have a set of regulations likewise debit cards and Top-up cards. Users and payment methods are code business functionality based on two aspects entire story will change.

A digital wallet can accommodate a wide range of digital assets or currencies. First, you need to determine which of these digital assets or currencies your wallet will accept and the significant amounts involved. For funding methods, bank transfers and cryptocurrencies are commonly used.

Identify the payment methods your digital wallet will support. This could include debit/credit card integration, bank transfers, QR codes, or near-field communication (NFC) for contactless payments. Consider the types of payments your system will facilitate. This could include in-store purchases, online payments, peer-to-peer transfers, or bill payments. Prioritize robust security measures to ensure user trust. This includes encryption for sensitive data, multi-factor authentication, and fraud detection mechanisms. Design a user-friendly interface that allows users to easily initiate, track, and manage their payments within the digital wallet app.

To establish a payment system, it's essential to carefully plan the steps involved in processes such as authorization, fund transfers, deposits, withdrawals, and so on. You should also consider integrating additional services to support these functions. The end result must be reliable, secure, and provide a clear functionality for handling transactions.

Payment flows again it depends on what kind of payment you are offering to the users. This is more crucial part of your design. Debit card payment - If amount > 100000 get approval - Refund to original payment mode - Reward 0.5% on debit card payments Credit card payment - If amount > 1000 get approval - Refund to original payment mode - Reward 0.1% on debit card payments - If EMI payment consider schedule - What if EMI cancels

Ensuring security in a digital wallet is one of the most crucial aspects of its development. It’s important to consider various usage scenarios for the wallet and to implement robust encryption algorithms and user verification methods during authorization. Additionally, if the wallet supports cryptocurrencies, it is recommended to protect it with a strong password created by the user (at least 12 characters long).

The most important thing is security not only payment design it comes all over the places. In order to make it more secure we may think about 2FA authentication. We should consider about encryption, data erasure, data masking, and data resiliency. We may use distributed system to address the data level security.

For potential users, usability and convenience can be among the primary factors when selecting a digital wallet. Therefore, it’s essential to meticulously design a positive user experience, researching the average user of the application and their needs. Additionally, you should incorporate features that distinguish your digital wallet from others available in the market.

Of course experience is most important thing. We should have clear view of what is happening/happened on you system. Payment flow status, amount, etc. Everything should be easily understandable by the user

Additionally, it’s worth considering security audits by third-party companies. This will enhance security and instill confidence in new users, as they will know that the service has undergone a safety assessment. Another important point is ensuring transparency between the service and the end user, as this will help build trust in the service among users.

One aspect we haven't covered like - Audit trails - Reports and insights - Investment recommendations - Split Payments - Loyalty Program Integration