How Digital Wallets Improve Payment Processes

𝐔𝐬𝐞𝐫 𝐉𝐨𝐮𝐫𝐧𝐞𝐲 𝐂𝐨𝐦𝐩𝐚𝐫𝐢𝐬𝐨𝐧: 𝐏𝐚𝐲𝐢𝐧𝐠 𝐰𝐢𝐭𝐡 𝐂𝐚𝐫𝐝𝐬 𝐯𝐬. 𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝗪𝐚𝐥𝐥𝐞𝐭𝐬 Have you ever paused to think about what actually happens in the background when you make a payment? Whether you're swiping a card at your favorite store or transferring money through a digital wallet, the user experience might feel instant but the backend processes are quite different. This visual beautifully explains two distinct ecosystems: 𝟏. 𝐂𝐚𝐫𝐝𝐬 (𝐎𝐩𝐞𝐧 𝐋𝐨𝐨𝐩) 𝟐. 𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝗪𝐚𝐥𝐥𝐞𝐭𝐬 (𝐂𝐥𝐨𝐬𝐞𝐝 𝐋𝐨𝐨𝐩) Let’s break it down: 𝐎𝐩𝐞𝐧 𝐋𝐨𝐨𝐩 (𝐂𝐚𝐫𝐝𝐬) When you use a card (like VISA or MasterCard), your transaction passes through multiple entities: 𝟏. The merchant initiates the transaction. 𝟐. The acquirer (merchant’s bank) sends it to the card network. 𝟑. The card network routes it to your card issuer (your bank). 𝟒. After authentication and approval, funds move through the same path back to the merchant — minus the processing fees. This process includes multiple hops, approvals, and fee deductions, making it slightly more complex and time-consuming from a backend perspective. 𝐂𝐥𝐨𝐬𝐞𝐝 𝐋𝐨𝐨𝐩 (𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝗪𝐚𝐥𝐥𝐞𝐭𝐬) Digital wallets streamline the process by keeping everything inside one ecosystem: 𝟏. The user downloads funds into their wallet from their bank. 𝟐. Once authenticated, the amount is instantly transferred from the sender’s wallet to the receiver’s wallet. 𝟑. Settlement with banks happens in the background, often with fewer intermediaries and lower costs. This model is faster, more efficient, and often cheaper — especially in P2P transactions. 𝗪𝐡𝐲 𝐭𝐡𝐢𝐬 𝐜𝐨𝐦𝐩𝐚𝐫𝐢𝐬𝐨𝐧 𝐦𝐚𝐭𝐭𝐞𝐫𝐬: -> Businesses can better understand fee structures and processing times. -> Consumers can make informed choices about which method is more convenient, cost-effective, or secure for them. -> Product builders and fintech enthusiasts get insight into how modern payment systems are evolving. As digital wallets continue to grow and gain popularity, especially in emerging markets, understanding these core differences becomes essential — not just for tech teams but also for marketers, product managers, and business leaders. Follow Nikhil Kassetty for more updates ! #Fintech #Payments #DigitalWallets #Cards #OpenLoop #ClosedLoop #FinanceSimplified #FintechExplained

𝗪𝗲𝗿𝗼 – 𝗘𝘂𝗿𝗼𝗽𝗲’𝘀 𝗨𝗻𝗶𝗳𝗶𝗲𝗱 𝗠𝗼𝗯𝗶𝗹𝗲 𝗣𝗮𝘆𝗺𝗲𝗻𝘁 𝗦𝗼𝗹𝘂𝘁𝗶𝗼𝗻 💳 Wero is a digital wallet, but it's so much more than that. It's Europe’s boldest step towards financial independence. Think of Wero as a homegrown, interoperable mobile payment solution built on top of real-time bank rails that's directly challenging the dominance of Apple Pay and Google Pay. Let's look at how it works 👇 𝗛𝗼𝘄 𝗪𝗲𝗿𝗼 𝗪𝗼𝗿𝗸𝘀 → #Wero runs on the SEPA Instant Credit Transfer protocol, an EU-regulated RTP rail that allows for instant bank-to-bank transfers in under 10 seconds. ▪️Funds are sent directly between linked bank accounts, no separate Wero balance is required. ▪️Users can initiate payments using familiar identifiers like a phone number or email. ▪️The wallet integrates with participating banks, which serve as the custodians and transaction processors. ▪️Wero is bank-led (via the European Payments Initiative), meaning no third-party tech giant controls the system. 𝗪𝗵𝘆 𝗧𝗵𝗶𝘀 𝗠𝗮𝘁𝘁𝗲𝗿𝘀 𝗳𝗼𝗿 𝗠𝗼𝗯𝗶𝗹𝗲 𝗣𝗮𝘆𝗺𝗲𝗻𝘁𝘀 → Wero is a turning point in Europe's digital payments strategy: 🔹It builds on the existing, regulated infrastructure, not a proprietary, closed-loop system. 🔹It allows for faster merchant settlement and reduced fees by eliminating intermediary schemes like Visa or Mastercard. 🔹The system enables seamless peer-to-peer and point-of-sale payments across multiple countries. 🔹It reflects a broader push for sovereign digital infrastructure that aligns with EU data and privacy standards. 𝗔 𝗗𝗶𝗿𝗲𝗰𝘁 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲 𝘁𝗼 𝗔𝗽𝗽𝗹𝗲 𝗣𝗮𝘆 𝗮𝗻𝗱 𝗚𝗼𝗼𝗴𝗹𝗲 𝗣𝗮𝘆 → Wero is changing the competitive landscape: ▪️𝗡𝗼 𝗵𝗮𝗿𝗱𝘄𝗮𝗿𝗲 𝗹𝗼𝗰𝗸-𝗶𝗻 → Wero works across devices, sidestepping Apple’s NFC restrictions on iPhones. ▪️𝗟𝗼𝘄𝗲𝗿 𝗰𝗼𝘀𝘁𝘀 𝗳𝗼𝗿 𝗺𝗲𝗿𝗰𝗵𝗮𝗻𝘁𝘀 → With no tech intermediary or scheme fees, costs are significantly reduced. ▪️𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗮𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁 → Wero is fully compliant with GDPR and European banking regulations by design. ▪️𝗕𝗮𝗻𝗸-𝗰𝗼𝗻𝘁𝗿𝗼𝗹𝗹𝗲𝗱 𝗲𝗰𝗼𝘀𝘆𝘀𝘁𝗲𝗺 → European banks reclaim control over digital payment flows, reversing years of disintermediation. 𝗠𝗲𝗿𝗰𝗵𝗮𝗻𝘁 𝗔𝗱𝘃𝗮𝗻𝘁𝗮𝗴𝗲𝘀 → Instant settlement = improved cash flow → Lower transaction fees = better unit economics → Cross-border usability = reduced operational friction → Customer familiarity = tied to bank apps, not unfamiliar third-parties 𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝘆-𝗪𝗶𝗱𝗲 𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀 → Wero’s launch can serve as an example of: 1️⃣ What happens when regulators and banks collaborate at scale. 2️⃣ How alternative networks can reduce dependency on U.S.-based payment schemes. 3️⃣ What the future of interoperability in payments across fragmented jurisdictions might look like Sources: European Payments Council (EPC), Checkout.com 🚨Follow Jason Heister for daily #Fintech and #Payments guides, technical breakdowns, and industry insights.

𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝐖𝐚𝐥𝐥𝐞𝐭𝐬 2.0 — adding core banking capabilities 👇 The world of payments is evolving rapidly. Digital Wallets 2.0 are not just about storing money — it's a comprehensive financial hub integrating payments, identity management, security, and even digital assets. —— ► 𝐓𝐡𝐞 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐒𝐡𝐢𝐟𝐭 🔸 𝐈𝐒𝐎 20022 – Replaces legacy payment messaging formats with a data-rich, structured, and standardized approach for payments across banks, PSPs, and even blockchain networks. 👉 Enhances interoperability between networks, including real-time payments and digital wallets. 👉 Enables data enrichment, allowing financial institutions to analyze transaction data for fraud prevention, compliance, and better customer insights. 🔸 𝐒𝐂𝐓 𝐈𝐧𝐬𝐭𝐚𝐧𝐭 (SEPA Instant Payments) – Mandates that all banks and PSPs offering standard euro credit transfers must also provide instant payments within 10 seconds. This requires banks to process payments 24/7 and introduces parity. 🔸 𝐏𝐒𝐃3 & 𝐏𝐚𝐲𝐦𝐞𝐧𝐭 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧 (PSR) – PSD3 builds on PSD2 by reinforcing open banking, fraud prevention, and consumer protection while introducing new regulatory frameworks for fintechs and non-bank players.
Introducing: 👉 IBAN Name Matching 👉 Fraud Information Sharing: between Banks & PSPs 👉 Better API Performance & Open Banking Evolution 👉 Expands Fintech Access —— ► 𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝐖𝐚𝐥𝐥𝐞𝐭𝐬 x 𝐂𝐨𝐫𝐞 𝐁𝐚𝐧𝐤𝐢𝐧𝐠 — The Functionalities 1️⃣ 𝐖𝐚𝐥𝐥𝐞𝐭 𝐑𝐞𝐪𝐮𝐞𝐬𝐭𝐬 & 𝐃𝐚𝐬𝐡𝐛𝐨𝐚𝐫𝐝𝐬 — Users can view, manage, and track incoming and outgoing fund transfer requests in real-time. 2️⃣ 𝐓𝐫𝐚𝐧𝐬𝐟𝐞𝐫 𝐌𝐨𝐧𝐞𝐲 𝐟𝐫𝐨𝐦 𝐖𝐚𝐥𝐥𝐞𝐭𝐬 — Users can send money to existing payees (both internal & domestic) or to new accounts within the same PSP. 3️⃣ 𝐖𝐚𝐥𝐥𝐞𝐭 𝐑𝐞𝐜𝐡𝐚𝐫𝐠𝐞𝐬 — Users can fund their wallets from: 👉 Their own bank accounts. 👉 Other digital wallets (via SEPA Instant Request-To-Pay). 👉 External sources — credit cards, debit cards, or bank transfers. 4️⃣ 𝐏𝐞𝐞𝐫-𝐭𝐨-𝐏𝐞𝐞𝐫 𝐓𝐫𝐚𝐧𝐬𝐟𝐞𝐫𝐬 (Wallet-to-Wallet) — Users can transfer money between wallets within the same PSP using a mobile number 5️⃣ 𝐖𝐚𝐥𝐥𝐞𝐭 𝐃𝐞𝐭𝐚𝐢𝐥𝐬 & 𝐀𝐝𝐯𝐚𝐧𝐜𝐞𝐝 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐬 👉 Users can access contract data, including IBANs, identity details, and primary bank account information. 👉 Supports multi-currency accounts for holding different forms of money (including stablecoins). 👉 Enables reward points, interchange commission management, and electronic bill payments —— ► 𝐓𝐡𝐞 𝐁𝐞𝐧𝐞𝐟𝐢𝐭𝐬 For banks, fintechs, and businesses looking to stay competitive in digital finance, Digital Wallet 2.0 is no longer optional — it’s a necessity. 🔸 Faster Transactions
 🔸 Regulatory Compliance
 🔸 New Revenue Streams —— Source: Tuum, KPMG, Mia-FinTech ► Sign up to 𝐓𝐡𝐞 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐁𝐫𝐞𝐰𝐬 : https://lnkd.in/g5cDhnjC ► Marcel van Oost and Connecting the dots in payments...