Are Starbucks and Uber 'embedded payment' systems ruining your finances?
Americans don’t always practice careful convenience when ordering lattes and takeout—and that's a problem
You tap your smartphone a couple of times, jump out of your Uber, and run into Starbucks to pick up your order.
Then you realize you have nothing in the house for dinner tonight. No problem. Another couple of taps and you’ve got DoorDash coming later with some takeout.
At no point did you need to dig out a credit card and enter your number and pin or stand in line to pay at a cash register.
All the payments were handled through complicated computer systems sitting invisibly behind the user-friendly smartphone apps of Uber, Starbucks, and DoorDash.
They, along with Amazon, Shopify, Lyft, and Apple, are among the pioneers of this technology, called “embedded finance,” but there are now thousands of other companies adopting it.
These systems seamlessly connect bank accounts, credit cards, payment management hubs, and retail outlets like Uber and Amazon. They’re invisible to the user, but involve complex technologies.
Sounds great—only not everyone’s a fan. Security issues, overwhelming complexity, high instances of fraud, and other problems are embedded in these systems too. And these problems are proving difficult to solve.