Patrick McKenzie (patio11) reads his Bits About Money essay on the business of wallets, with new commentary, prompted by paying his barber $100 over Venmo and wondering why PayPal so badly wants to be in the middle of that transaction. He walks through the economics that make wallets irresistible to anyone already moving money for users: funds enter the ecosystem at card interchange rates, move inside it at the cost of a database transaction, and get topped up over ACH pulls that cost about five cents at scale. From there he covers co-branded debit and credit cards, the loss-sharing language in PayPal's 10-K, Apple's 15 basis points on Apple Pay, and why a checkout page crowded with payment buttons starts to look like advertising inventory.
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Timestamps: (00:00) Intro (03:06) The big question about wallets (04:11) Wallets show up early in the life of the Internet (06:01) Stocks, flows, and whatever the heck a wallet is (09:21) What does an ACH pull cost? (11:01) Extensions on the basic wallet model (11:38) What's in your wallet? A new debit card (14:49) Sponsors: Mercury | Granola (18:09) What's in your wallet? A new debit card (cont’d) (23:06) Put the wallet on the phone already (24:50) That smells like an ads business (27:33) Speaking of Stripe and wallets (32:52) Wrap
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