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The business of wallets

How digital wallets work, and how payment costs drive a lot of product decisions inside and around them.

This was probably never actually a major threat by percentage of all stolen cards, not when these articles were written or afterwards, but this would not be the first or last time that the media convinced itself of an untruth and then was unable to find an industry insider to leak them a SQL query dispelling their fantasies. A fun bit of ancient history: once someone was visiting the Stripe Tokyo office shortly after I joined, and I wanted to show off that I had figured out how to query an internal data store, so I said “What’s your over/under on the percentage of cards used this year that we have seen before?” That number was pretty mindboggling even in 2016, and an obviously good marketing point. For other users who do not have strong preferences, perhaps because they are not in the socioeconomic strata that directly benefits from rewards programs, you can have businesses that are sensitive to the cost of interchange subsidize an incentive for typing a low-cost payments credential into a mobile phone once.

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