Banking App

[willnburger]

Hey all, I've had an idea for a banking/finance app that i think is great and could do well but i need to know how apps such as paypal work. If somebody wants to input cash into an atm, how does that work? where does the cash go? and if i make a transfer from my bank/credit card to paypal where does my money actually go? and when i withdraw/use my money where is that money actually coming from? Is there an actual vault with my cash or does all my moey go into paypals big vault and then some is transfered out when i need/request it?

 

 

Cheers

Will

[Slottr]

https://www.khanacademy.org/economics-finance-domain/macroeconomics

 

I'd recommend going through this course before you even attempt looking at that. 

[dizmo]

...oh dear. If you don't know the basics of that, you shouldn't have pipe dreams of developing an app.

[willnburger]

I have a basic idea but I need to know for certainty what these massive companies do, because more often than not it will be the most efficient solution

[Slottr]

2 minutes ago, willnburger said:

I have a basic idea but I need to know for certainty what these massive companies do, because more often than not it will be the most efficient solution

Banking isn't something you just walk into, without knowledge of basic commerce and introductory economics it shouldn't be something you even consider 

[dizmo]

10 minutes ago, willnburger said:

I have a basic idea but I need to know for certainty what these massive companies do, because more often than not it will be the most efficient solution

If you think that they separate the bills you hand into the bank, as well as the money you get directly deposited into a box that's just yours, you're so far out of your depth it's not even funny.

[willnburger]

obviously i understand that they do not but ffs, instead of telling me what's wrong can somebody just tell me what's right??

[Slottr]

6 minutes ago, willnburger said:

obviously i understand that they do not but ffs, instead of telling me what's wrong can somebody just tell me what's right??

I linked you a course that will help a little bit, but by no means set you on the right path. People go through years of schooling to understand this stuff, its not just pick up and go.

[willnburger]

i had one question, not how does economics work, not what is an economic machine, but where does the money go and how is it distributed, if you can't help me answer that then please just go away

[Slottr]

2 minutes ago, willnburger said:

i had one question, not how does economics work, not what is an economic machine, but where does the money go and how is it distributed, if you can't help me answer that then please just go away

Thats economics man, sorry to break it to you

[willnburger]

i dont need some model, but the logistics. I would assume that there would be a large account filled with everybody's money and people with a positive balance who aren't overdrawing can take money from that account/vault etc.

[Slottr]

3 minutes ago, willnburger said:

i dont need some model, but the logistics. I would assume that there would be a large account filled with everybody's money and people with a positive balance who aren't overdrawing can take money from that account/vault etc.

That is what Macroeconomics is.

 

It defines what money is, where it goes and how its controlled and the effects of its control. 

[willnburger]

great thanks for the update, but again LOGISTICS!!! for example paypal, exactly how do they receive money, how do they store it and how do they output. dont just say macroeconomics give me the exact step by step plan of what happens

[LogicalDrm]

4 hours ago, willnburger said:

I have a basic idea but I need to know for certainty what these massive companies do, because more often than not it will be the most efficient solution

 

I can only speak about regulated banks, and even they tend to do fishy stuff.

 

4 hours ago, willnburger said:

great thanks for the update, but again LOGISTICS!!! for example paypal, exactly how do they receive money, how do they store it and how do they output. dont just say macroeconomics give me the exact step by step plan of what happens

 

I don't know how exactly these things work (my brother probably would, he has worked for Nordea as assistant database manager), but try to give you a direction.

 

We live in digital age. Lets start with that. All the info about how much money, who has it and where/which bank holds it, is kept in digital records. For PayPal, when you create account, you have 0 balance as PayPal is middleman/transfer service, not bank. You don't need to deposit anything to open PayPal account. PayPal will verify your payment methods from bank, or you can transfer funds to them. The transfer is secured connection between bank and other party, usually handles by middleman. Bank has record of how much money is in your account, based on how much you have deposited and how much interest it has grown, if there isn't any other variables. When secure connection is established (you have entered enough private information to identify yourself as owner of account), bank marks the amount being transferred withdrawn from your account and PayPal marks it as deposited. Thats it. The info or receipt should have enough identifiers that if you do your own accounting, you can follow money flow. Also companies money is being transferred to and from should have that info kept. If they don't, then there's high possibility of some illegal activity.

 

For credit/debit cards and ATMs its not that different. Again, I can only relate to what I know about how things work here. Withdraw from ATM works same way as transferring money between companies. You identify yourself with card (with chipped cards the actual identifier is much longer than just number you see, and has info about which PIN code relates to it). ATM connects to banks API (or something like that). Marks how much funds you are taking out and distributes money. Again, you should get receipt which has enough info to track how money flows. Banks info, ATMs info (location, time, serial), your card number and maybe holder, plus amount and how much your account has after withdrawal was made. Paying at store works pretty much same way in modern world. Old way of using credit cards, and some of how delayed payments work, is different. While basics are same, there's another middleman, credit card company. Instead of taking amount you pay directly and instantly from your bank account, they mark it as used. With debit cards this is actually withdrawn after few days automatically. Credit cards give you until end of month or another set term to pay whole amount of that months usage.

 

Now deposit to ATM. Its actually same with withdrawal in terms that you are required to be identified with card. Or some other way, but our machines only work with cards. You are also trusting that machine counts your money correct.

 

Overall, I would recommend you look more into finance industry. Maybe read book or two about how the actual things are done, maybe guide on how PayPal or MobilePay work and how they have been accepted as part of digital money transfers. IIRC PayPals founders include people who have worked for banks or insurance companies in past. Having education of that sort sure helps.