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Design a Digital Wallet Service - Low-Level Design | OneNoughtOne

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Design a Digital Wallet Service

Intermediate

Design an object-oriented digital wallet service that supports user registration with KYC, wallet management (credit, debit, freeze/unfreeze), peer-to-peer transfers, and multiple payment methods (bank account, credit card, UPI).

Every transaction follows a lifecycle (PENDING → COMPLETED / FAILED / REVERSED). The system ensures balance integrity (no negative balance), atomic transfers, and provides transaction history. Payment methods are abstracted via the Strategy pattern for extensibility.

Core Use Cases

Add funds (top-up)

Load money into the wallet from a linked payment method (bank, card, UPI)

Withdraw funds

Transfer money from wallet back to a linked payment method

Peer-to-peer transfer

Send money from one user's wallet to another user's wallet

Refund a transaction

Reverse a completed transaction, restoring both wallets

View balance and statement

Check current balance and view recent transaction history

Freeze / unfreeze wallet

Temporarily block all transactions on a wallet (fraud, request)

KYC verification

Verify user identity; may gate higher transaction limits

Constraints

Balance can never go negative — debit/transfer must check sufficiency
Frozen wallets reject all credit, debit, and transfer operations
Each transaction is atomic — both sides of a transfer succeed or neither does
Transaction IDs are globally unique
Refunds can only be issued for COMPLETED transactions

Assumptions

Single currency per wallet (multi-currency is a follow-up)
In-memory storage (no database persistence)
Single-threaded (concurrency is a follow-up)
Payment method charge/refund always succeeds (external gateway simulation)

In Scope

User registration with KYC flag
Wallet with credit, debit, freeze/unfreeze
Transaction lifecycle (PENDING → COMPLETED / FAILED / REVERSED)
Payment method abstraction (BankAccount, CreditCard, UPI)
P2P transfer with atomic debit + credit
Transaction statement / history

Out of Scope

Real payment gateway integration
Multi-currency and exchange rates
Cashback / rewards / offers
Merchant payments and QR codes
Regulatory compliance (PCI-DSS, RBI mandates)

Approach Guide(Click to expand each section)

Before diving into code, clarify the use cases and edge cases. Understanding the problem deeply leads to better class design.

List Core Use Cases

Identify the primary actions users will perform. For a parking lot: park vehicle, exit vehicle, check availability. Each becomes a method.

Identify Actors

Who interacts with the system? Customers, admins, automated systems? Each actor type may need different interfaces.

Clarify Constraints

What are the limits? Max vehicles, supported vehicle types, payment methods. Constraints drive your data structures.

Ask About Edge Cases

What happens on overflow? Concurrent access? Payment failures? Thinking about edge cases reveals hidden complexity.

Follow-up Questions(Questions an interviewer might ask)

💡 Draw UML class diagrams, sequence diagrams, or any design visualizations. Submit from the Code tab.

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Loading LLD design...

00:00:00

Design a Digital Wallet Service

Intermediate

Core Use Cases

Add funds (top-up)

Load money into the wallet from a linked payment method (bank, card, UPI)

Withdraw funds

Transfer money from wallet back to a linked payment method

Peer-to-peer transfer

Send money from one user's wallet to another user's wallet

Refund a transaction

Reverse a completed transaction, restoring both wallets

View balance and statement

Check current balance and view recent transaction history

Freeze / unfreeze wallet

Temporarily block all transactions on a wallet (fraud, request)

KYC verification

Verify user identity; may gate higher transaction limits

Constraints

Balance can never go negative — debit/transfer must check sufficiency
Frozen wallets reject all credit, debit, and transfer operations
Each transaction is atomic — both sides of a transfer succeed or neither does
Transaction IDs are globally unique
Refunds can only be issued for COMPLETED transactions

Assumptions

Single currency per wallet (multi-currency is a follow-up)
In-memory storage (no database persistence)
Single-threaded (concurrency is a follow-up)
Payment method charge/refund always succeeds (external gateway simulation)

In Scope

User registration with KYC flag
Wallet with credit, debit, freeze/unfreeze
Transaction lifecycle (PENDING → COMPLETED / FAILED / REVERSED)
Payment method abstraction (BankAccount, CreditCard, UPI)
P2P transfer with atomic debit + credit
Transaction statement / history

Out of Scope

Real payment gateway integration
Multi-currency and exchange rates
Cashback / rewards / offers
Merchant payments and QR codes
Regulatory compliance (PCI-DSS, RBI mandates)

Approach Guide(Click to expand each section)

Before diving into code, clarify the use cases and edge cases. Understanding the problem deeply leads to better class design.

List Core Use Cases

Identify the primary actions users will perform. For a parking lot: park vehicle, exit vehicle, check availability. Each becomes a method.

Identify Actors

Who interacts with the system? Customers, admins, automated systems? Each actor type may need different interfaces.

Clarify Constraints

What are the limits? Max vehicles, supported vehicle types, payment methods. Constraints drive your data structures.

Ask About Edge Cases

What happens on overflow? Concurrent access? Payment failures? Thinking about edge cases reveals hidden complexity.

Follow-up Questions(Questions an interviewer might ask)

💡 Draw UML class diagrams, sequence diagrams, or any design visualizations. Submit from the Code tab.

Loading canvas...

Design a Digital Wallet Service

Core Use Cases

Constraints

Assumptions

In Scope

Out of Scope

Approach Guide(Click to expand each section)

Follow-up Questions(Questions an interviewer might ask)

Explore the full editorial.

Sign in to view submissions

Design a Digital Wallet Service

Core Use Cases

Constraints

Assumptions

In Scope

Out of Scope

Approach Guide(Click to expand each section)

Follow-up Questions(Questions an interviewer might ask)

Explore the full editorial.

Sign in to view submissions

Design a Digital Wallet Service

Core Use Cases

Constraints

Assumptions

In Scope

Out of Scope

Approach Guide(Click to expand each section)

Gather Requirements~3 min

Identify Classes & Entities~4 min

Define Relationships~3 min

Apply Design Patterns~4 min

Apply SOLID Principles~3 min

Code Organization~2 min

Follow-up Questions(Questions an interviewer might ask)

1How would you ensure atomicity of P2P transfers in a concurrent environment?

2How would you add transaction limits (daily, per-transaction) based on KYC tier?

3How would you support multi-currency wallets and conversions?

4How would you add cashback / rewards on transactions?

5How would you implement fraud detection for suspicious transactions?

Key Topics

Asked At

Explore the full editorial.

Sign in to view submissions

Design a Digital Wallet Service

Core Use Cases

Constraints

Assumptions

In Scope

Out of Scope

Approach Guide(Click to expand each section)

Gather Requirements~3 min

Identify Classes & Entities~4 min

Define Relationships~3 min

Apply Design Patterns~4 min

Apply SOLID Principles~3 min

Code Organization~2 min

Follow-up Questions(Questions an interviewer might ask)

1How would you ensure atomicity of P2P transfers in a concurrent environment?

2How would you add transaction limits (daily, per-transaction) based on KYC tier?

3How would you support multi-currency wallets and conversions?

4How would you add cashback / rewards on transactions?

5How would you implement fraud detection for suspicious transactions?

Key Topics

Asked At

Explore the full editorial.

Sign in to view submissions