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@ChrisBrown:

TY for your kind words.

I saw the following statement in one of your previous comments:

"Using cards: in order to get that initial sign-up as described it would be necessary to allow people to load their account using one of their existing cards."

From this, I assumed that your product does use a card for wallet topup. If so, that's how PayTM works. 

Now if you say your product will connect to a bank account, then it sounds closer to BHIM, an A2A fund transfer mobile app, that I'd referenced in my earlier blog post. (PayTM can also pull money from a linked bank account for topping up its mobile wallet but it's not an A2A product). For whatever reason, BHIM hasn't gathered much traction nor has it killed PayTM-type mobile wallets as was widely predicted during its launch a few months ago. Just in today's newspapers, there was an article where BHIM's sponsor has admitted lukewarm takeup and has appealed to the government to hike up the referral incentive from INR 10 to INR 25 to stimulate wider adoption of BHIM.

In any case, BHIM and your product sound like VocaLink's PayM in UK. Not sure why but I haven't heard much buzz around PayM during the past year.

When I wrote 'had MCX been mentioned, the title of this post would have to be changed to "Digital retail wallet: 1 Reason it doesn't make sense"', wasn't it evident that I clearly understood why your post hadn't mentioned MCX? For the sake of clarity, your post would lose its raison d'être if you'd considered the fate of MCX.

Per se 14% is not a small number. Just 5%* of US shoppers moved from brick-and-mortar stores to Amazon and see where Amazon is today. OTOH, it's not clear whether the switch from traditional banks to challenger banks is as much of a change as that from brick-and-mortar retail to ecommerce.

*: 8% of US retail sales happens online, of which Amazon has 3/5th share, so switch-to-Amazon % = 8%*3/5 = 4.8% = ~5%.

Your alternative sounds like PayTM. It can work in underserved markets. Provided it gets humungous amount of funding and can sustain losses for several years. https://www.finextra.com/blogposting/13576/five-reasons-why-paytm-is-miles-ahead-of-its-rivals

I was surprised at not finding a single mention of the world's largest retail wallet initiative MCX / CurrentC in this blog post. Then it struck me, had MCX been mentioned, the title of this post would have to be changed to "Digital retail wallet: 1 Reason it doesn't make sense".

Brilliant post.

Oh have we already forgotten how Monzo freezes current accounts?

https://www.finextra.com/news/fullstory.aspx?newsitemid=30686

When frozen, current accounts can provide a free source of funds to lend at a profit. Hope this is not the kind of devious trick that I'd alluded to in my comment on the previous post. Let's see.

On a side note, a loss of £6.7 million is not even peanuts for an average VC-funded fintech. Not sure why Monzo is compelled to pivot after making such a puny loss.

*cashback - I meant "chargeback".

@RalfOhlhausen:

When I onboarded MINT several years ago, I stopped dead on my tracks when it asked me to handover my NetBanking creds to it. And this was despite its undertaking that it'd use the access for "read only" purposes only i.e. it wouldn't make any transactions on my behalf. If I understand correctly, PISPs are seeking NetBanking creds for the purpose of making transactions OBO consumers. Good luck to PISPs for persuading consumers that their existing payment options are so rotten that their only salvation lies in handing over keys to their kingdom to PISPs. That too, without chargeback protection.

I suspect that PayPal works in PULL mode only when using credit / debit card as funding source and offers chargeback protection to consumers only under these two options. What I do know is that, when it uses PayPal account balance or linked bank account to fund a payment, there's no cashback. I'm no fan of PayPal but it has done rather well for itself by betting its livelihood that bank APIs are fit for purpose and has reached where it has without clamoring for screen scraping.

In this day and age of low latency algo trading, curious to know how the Nasdaq spokesman asserts so confidently that "no trades were completed" at the wrong prices!