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Nearly every consumer-facing platform now offers the ability to store payment credentials, either through onsite storage in account settings or through the connection to a digital wallet. This new wave of card-on-file capabilities is enabling magical customer experiences, in which payments happen automatically behind the scenes. Amazon Go, Uber, Lyft, and other best-in-class customer experiences are designed around invisible purchase decisions—customers can literally just walk out and systems handle the payments on their behalf. All of these systems are based on saving payment credentials and moving the moment of consent to a different juncture in the purchase process. With Uber, customers consent to pay when they request a ride, instead of when the ride is complete. In the past, the mechanism behind this entailed putting a temporary hold on a credit card for a generic amount (which at times was sizable) that was later replaced with the transaction’s specific amount. The obvious attraction of these novel cardon-file experiences spurred businesses to deploy one-click checkout and universal buy buttons. Such mechanisms put merchants in the process of completing a purchase. Pay-Pal automatically tries a second credit card in a consumer’s online wallet if the first one fails, without making that consumer redo the purchase. Startups like Silverflow seek to streamline the process for sellers, with a single merchant API so that customers can pay with any product from anywhere, thus removing the need for merchants to enable every individual payment system or bank.

Invisible payments

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Financial Technology