The business of wallets

I liked Google pay, until I found myself randomly in some experiment group and it just didn&#x27;t work one day. I discovered this in the shop, and of course I wasn&#x27;t carrying physical cards because I&#x27;d been duped into thinking the digital type would never fail.<p>I started carrying my physical cards after that, and started using them more for quick transactions, as I&#x27;d rather risk dropping a piece of plastic rather than my phone.<p>I&#x27;ve entirely switched back to physical cards now, after exclusively using digital wallets for years.<p>One thing that helped is learning how much data is stored by the wallet providers. I fear data being used against me, in the future, in ways I cannot imagine today.<p>So imagine my surprise when a Stripe payment, for an online service to provide hormones for transitioning, which is legal where I live... Triggers Stripe to send an email phrased like it was necessary for order confirmation, and then to create a Link account presumably with the transaction details... Opt-in via dark patterns.<p>One thing not covered is the safety of wallets and the metadata around transactions, safety for individuals from the politics of the United States.

The article is about digital wallets, and it spends more than a little time explaining Stripe&#x27;s product, Link. There&#x27;s plenty to learn from this article about &quot;electronic&quot; wallets, and their place on your phone. But my eyes glazed over when Patrick kept circling back to Link.<p>Of course, having just bought a lovely mid-sized leather wallet to replace a slightly finicky minimalist wallet (elastic is annoying), I was kind of hoping for some kind of dorky deep dive into physical wallets (which we used to just call &quot;wallets.&quot;)

The small businesses I know have learned from bitter experience never ever to leave money in Paypal because it will seize it when it feels like and give it back whenever if ever. That does not sound like a business that relies on people leaving money in their account earning 0% for the depositor and a few percent &#x2F; year for PayPal (large retailers run the same scam, where they always pay for goods 89 days after receipt and keep the money earning interest in the meantime).

Credit card fees are a weight on the economy, a tax that benefits only the rent seekers. This weight should be lifted as soon as possible.<p>Either by economic competition or by regulation.<p>For the competition angle to work, companies must be able to rewards customers for using payment solutions that circumvent the credit card fees.

I wonder how central bank digital currencies will play into this. E.g. for the digital Euro, the ECB intends it to be included under legal tender [0] laws making acceptance of digital cash mandatory wherever you can pay in cash (i.e. every physical POS).<p>I expect most digital wallets to be made obsolete by such a measure, because most of the use of a digital wallet as described by the post is easy, nearly free digital transactions by end-users. Everything else can be done using your regular bank account. An ECB-backed alternative to Paypal, Venmo, Cash App et al. would certainly be more trustworthy to citizens and the compulsory acceptance by merchants will artifically solve the chicken-egg problem that most such private companies have.<p>Ditto for debit cards, which would pose a threat to Visa and Mastercard.<p>I&#x27;m curious what kind of ecosystem will exist around CBDCs.<p>[0]: <a href="https:&#x2F;&#x2F;finance.ec.europa.eu&#x2F;digital-finance&#x2F;digital-euro&#x2F;frequently-asked-questions-digital-euro-and-legal-tender-cash_en" rel="nofollow">https:&#x2F;&#x2F;finance.ec.europa.eu&#x2F;digital-finance&#x2F;digital-euro&#x2F;fr...</a>

It&#x27;ll be interesting to see the impact of &quot;instant settlement&quot; systems that are based around ISO20022 like FedNow, PromptPay, Osko and others.<p>If my bank can offer direct instant settlement between my account and another person&#x27;s, then why do I need any other services? If they can associate my account with a line of credit, why do I need a Visa&#x2F;MC and why do they need to pay the network and interchange fees?<p>I my on-phone secure element (ie the &quot;wallet&quot;) can support an app that is not EMV with all of it&#x27;s legacy complexities, then why keep all that infrastructure?<p>All of that goes away.

&gt; Cash App is, if you squint, a wallet. Block product managers would probably heavily dispute this characterization and say, truthfully, that their core user feels like they’re using Cash App rather than using their linked Bank of America debit card when they are paying with Cash App.<p>APMs<p>The article is mostly good.<p>But it would have been munch more clear if Alternative Payment Method (APM) was directly acknowledged.<p>Because it’s easy to conflate wallets from APMs.

My experience servicing financial products is that &quot;big data&quot; markers have significantly more signal than FICO scores...<p>I guess it depends on what your product is. For stripe, FICO is sufficient.

The infinitives are so very, very deeply and unnecessarily split.

The world needs SEA instant transfer and payment systems. Paynow, is an instant ba k transfer, thus incurs 0 fees.

It&#x27;s crypto&#x2F;web-wallets, not traditional wallet.

Author&#x27;s name rings a bell<p>Kalzumeus.com