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Full transcript: Recode’s Jason Del Rey answers your payments questions on Too Embarrassed to Ask

Payments apps like Venmo and Square Cash get discussed, plus Apple’s new P2P service.

The Eurozone Crisis Deepens As Greece Attempts To Avoid Bankruptcy David Ramos / Getty

On this episode of Too Embarrassed to Ask, Recode’s Kara Swisher and The Verge’s Lauren Goode invite Recode Senior Commerce Editor Jason Del Rey into the studio. The three talk about Apple’s latest foray into the peer-to-peer payments space, Venmo, Square Cash, PayPal and why Kara won’t use the check deposit feature on her banking app. They then answer questions from listeners about the future of payments.

You can read some of the highlights from their discussion at that link, or listen to it in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Too Embarrassed to Ask on iTunes, Google Play Music, TuneIn or Stitcher.

Kara Swisher: Hi, I’m Kara Swisher, executive editor of Recode.

Lauren Goode: And I’m Lauren Goode, senior editor at the Verge, and you’re listening to Too Embarrassed to Ask. Coming to you from the Vox Media Podcast Network.

Come on down. That’s such a ridiculous name, I’m sorry. They’re all ridiculous names, like “The Empire.” This is a show where we answer all of your embarrassing questions about consumer tech.

Yes, recent questions we’ve had include, “What will it take for Uber to change?”

The app apocalypse, but go ahead.

“What is the best fitness watch to buy?” “What do I need to do to protect my privacy online?”

Don’t take Uber.

“Where in the world is Kara Swisher?”

On a bus, not an Uber. I took a bus today. It took me forever to get here but it was delightful and I met the people of the city San Francisco. It was very nice.

She did take a bus today. Mayor Swisher.

Indeed, I was with the people. That’s where I belong, not in the Ubers.

You and Mark Zuckerberg.

Yeah, right, exactly. I wasn’t touching cows, but whatever. That’s my next step, touching livestock.

Stop text messaging on your phone ...

I’m not, I just got it in my pocket. Oh my God.

All right, anyway. We’re gonna answer a lot of questions, we got a lot of good questions about good topics. So send us your questions, we do read them all. Find us on Twitter or tweet them to @recode or to myself, or to Lauren with the hashtag too embarrassed.

We also have an email address, too Reminder, embarrassed has two r’s and two s’s.

Yes it does. And while you’re there, have a listen to our previous episodes. You can find those anywhere you listen to your podcasts, we’re on Apple Podcasts, Google Play Music, TuneIn, Stitcher, SoundCloud and more. Or, just visit us at

So, the last time we spoke, you were remote. You were in D.C.

D.C., that’s right.

I was here. Now we’re finally together again.

I was trying to give Trump a history lesson. It didn’t work, obviously.

Yeah. No, I think that you ... Do you blame the teacher or the student at this point? If you were trying to teach him, Kara?

Obviously, I don’t ... it’s 400 years old so I have no idea, I’m not counting but it’s just astonishing.

Well, the last podcast ...

I think Andrew Jackson could have stopped this Uber situation, don’t you think?

God ...

He got the Civil War. I think he could have solved the situation at Uber.


Well, he was dead for 190 years before. But so what? Anyway, just an observation I’m making.

I mean, I don’t know. Is swapping the bad for the worst ...

I just feel like, why did we have to get there with this, you know? Anyway, that guy. What an insect.

Speaking of Uber. So we talked about Uber last week with Mike Isaac from the New York Times.

Yes, we did.

We had a delightful show. I don’t know if there’s been any Uber news since, has there, Kara?

Yes, there’s been some news.

What’s the news?

The CEO of Uber, who was scheduled to come to Code, is now dropping out and sending in his place Arianna Huffington.

Are you surprised?

You know, I am a little tiny bit because when we invited him it was before the Susan Fowler blog and then afterwards, before we announced, I specifically said, “Are you sure you wanna come?” Like, “This is going to be tough, there’s gonna be all kinds of issues. That report’s gonna be out.” I gave him a chance not to come and the answer was a resounding, “Of course we’re gonna come, we’re gonna answer your questions.”

And then of course, now because the report is coming out the same week as Code and I guess he can’t chew gum and walk at the same time.

Yeah, as you pointed out in your article, it’d be tough to take that one-hour flight.

Answer questions ... One-hour flight’s super hard even though I did it yesterday and I’m going to do it tomorrow. But, you know, it was typical.

Do you think it was him or do you think it was his PR people?

No, I think it was him.


Well, I mean yes. It’s a whole group of them all making bad decisions together, I guess. Which seems to be the way things work there.

Well that’s unfortunate.

Yeah, then they’re sending Arianna, who’s a board member, who’s leading the investigation. I asked for some other people who knew more about the business, too, because she’s not as closely involved in the business. And all the men, and none of them are available or wanting to come for various reasons. Mostly they don’t want to get near it, I think they want to keep their ... Even though they’ve been complicit in what’s happening at Uber, they don’t want to talk about it, I guess. And so they’re thinking of sending their HR person, so two women will defend Uber’s issues of sexism and sexual harassment, which, you know, it’s women cleaning up after naughty men, which is a little bit irritating.

Well, I’m sure the interview with Arianna will be just as fascinating.

I ran into her yesterday at the Milken Conference in Los Angeles and, you know, she’s a pro. I gotta say. I was like, “I’m gonna rip your face off.” She goes, “That sounds fantastic. I look forward to it.”

She’s like, “I’ve been sleeping extra to prepare for it.”

“How are you?” She literally is like,”"How is everything otherwise?” And goes right into my personal life. I was like, “I’m gonna kill you. I’m gonna take you and gonna break every bone in your body.”

“Oh yes, we’ll see how that goes.”

Are you going to do your accent onstage, while she’s onstage?

I might have to. I don’t know, I’m gonna have to really prepare for that interview because she like is ... She is a rope-a-dope champion. You know what I mean? I’ve had fights with her about when Michael Arrington was at TechCrunch and we got in a big fight. Man, she’s just ... Maybe she is the right person to send in, because she’ll just exhaust me. I’ll just punch, punch, punch, punch and she’ll be like, “Oh yeah, you’re little Kara, come on, you look so cute when you’re angry."

So it’s gonna be ugly but I’m terrified she’s gonna rope-a-dope me. So we’ll see. Any suggestions, please, from people. I’m gonna put up ...

What you’re too embarrassed to ask Arianna?

Too embarrassed to ask Arianna. We’ve had her on Recode Decode and Too Embarrassed, right?

Yes, she came on Too Embarrassed to ask to talk about her book.

Sleeping, that’s right.

Sleeping, yeah.

I’m gonna find her in her sleep and smother her. I don’t know.

Aren’t you all, all of our loyal podcast listeners, so upset that you’re not going to be at Code conference this year.

Yeah, it will be broadcast this year. And I think she’s ...

Although, you can get, shameless plug, you can get all of our Code conference content for free at Recode Replay on iTunes.

Oh yes, you will. You will be able to do that. Yup absolutely. Including the Arianna face-off ...

So you will be able to listen to it, right?

Which is going to be a real face-off. She is a real charmer.

We should make a movie poster for you two. Like the Nick Cage movie “Face-Off.”

You know one thing, I gotta say. She’s coming. Unlike the weak-willed, lack-of-spine CEO. She is coming. She’s showing up and she’s gonna answer questions. I wrote a pretty tough piece yesterday about it and I thought she’d be upset by it. She’s like, “Thank you for that fair and complete piece.”

I was like, “Oh my God.” I literally could ... But anyway, she’s coming, so at least she’s coming. I’ll give her that.

Well, I’m sure we could talk about this the whole time ...

Yes, we could. But let’s talk about this more important thing, which I think is an amazing thing that Jason Del Rey broke a lot of scoops last week about. So explain away, Lauren, please.

We’re gonna be talking about money today.

Money. Ka-ching.

Specifically payments apps like Venmo, Square Cash and what might be Apple’s attempt to build on its existing Apple Pay service and compete with those services which are known as peer-to-peer payments, or P2P.

Nobody calls it that, but okay.

Nerds like us do.

I don’t.


All right.

Hashtag P2P. We’re also going to be talking broadly about the future of payments and what banks will actually look like in the not so distant future. And so we are delighted to have Recode’s Jason Del Rey joining us from New York. It’s a little late, actually, where he is in New York, so we’re especially grateful he’s joining us.

Yammering away about Arianna Huffington. Hello Jason, how are you doing?

Jason Del Rey: Hello, hello, hello.

KS: You went with Arianna Huffington, didn’t you? You did a little sleep video with her.

I did something like that, yes. That sounds a little funny.

KS: She charms you, right?

She ... Somehow money came out of my bank account after I did that visit. Yep.

KS: Yep. Go ahead, sorry.

Kara, I want you to do ... Can you do the accent for half of this interview because it keeps getting ...

KS: I can do that, hello baby. Hello baby.

It keeps getting better.

KS: Thank you.

I used to think it was not so great but it’s great now.

KS: Come on, it’s fantastic. Hello baby, how are you.

LG: You know it’s funny now that I think about it, she did that to me once too. It was the day that they announced the Huffington Post livestreaming video product, this was years ago, and I was working for the Wall Street Journal. We were doing livestreaming video and it was really expensive and not a super valuable proposition at the time. And I remember asking her a question that was basically like, “Why are you spending so much money on live video?” Like in a room full of people and she just answered and then she came up to me afterwards and she was like, “I love your dress.”

KS: It’s genius, it doesn’t matter what horrible thing she says.

Lauren, I was actually at that same interview and you actually asked them why they expected people to come at a specific time to watch a show online when fewer and fewer people are even doing that in traditional TV. Okay.

LG: Thank you, so it wasn’t about money it was about that … no one remembers this, but yeah.

KS: I was at an event with her recently, she was in a freezing cold event in Munich and she wasn’t wearing a coat and I was like, “Where’s your coat?” And she goes, “When you have a car, darling, you don’t need a coat.” Literally, she gets in the fucking limo and goes. It was crazy. Anyway, let’s not talk about Arianna. But it was like, I was sort of like, “Okay, that makes sense.”

So on his podcast yesterday, Peter Kafka called Jason the best damn e-commerce reporter you can find. I don’t know if you’re looking for them, but there it is.

LG: That was a good Peter voice.

KS: Now Peter, he usually just texts me and thanks me. Peter and I do not always agree, but he’s absolutely right about Jason. Jason, you have been on a roll with these scoops. Explain your recent one about Apple getting into P2P and explain what it’s goals would be. So let’s start off with the Apple scoop.

Sure, so I’m assuming most of our listener know that Apple has a payment service called Apple Pay where you can pay in stores and also in apps and on websites using your fingerprint to authenticate. Cuts out a lot of friction, supposedly. My recent scoop was that they have been in talks with Visa and other potential financial industry partners on taking on Venmo and Square Cash and PayPal proper with a money transfer service that would allow me, through my iPhone, to send money to one of you in a simple and easy way.

Part of the goal would be trying to get more people thinking of Apple as a payments provider and maybe boosting the usage of Apple Pay. Which, in my talks with many banks, banks have been underwhelmed by the traction of Apple Pay over the last two and half years. But Apple being Apple, they’re gonna keep working with them because they assume Apple will figure it out at some point. So that’s one goal. I can dive into the weeds on a whole bunch of other stuff but I’ll ... I can turn that over to you guys first.

KS: What is it? A separate service or what? Explain what part of it is ... Because I use it a lot, actually. I don’t know, Lauren, do you?

LG: You use Apple Pay?

KS: Yeah.

LG: I use it a fair amount, but when I think of the peer-to-peer apps, I think of them as like, you sort of go to your phone and you manually open it and punch in a payment to someone and send it like you would send a message.

KS: Right.

LG: So, I’d be curious to know if this was a part ... if Apple, you know, if this is gonna be a part of Apple Pay or is it its own sort of container or app.

So I don’t know what it will look like yet, but I know one of the goals is to get more people using Apple Pay. One of the ways they hope to do this would be by creating their own Apple debit card which would be linked to this peer-to-peer service. So let me give you a quick example.

So Lauren, you would send me $50 because I’m a friend of yours and you like me via this new Apple money transfer service.

LG: I do often have to pay for my friends. That’s why they hang out with me.

I would have a choice then to either cash out that $50 to my bank account, which may take a day or so, or that $50 can live in a virtual debit card that Apple provides and then I could add that debit card to Apple Pay and use it that same day to go and buy something in a store that accepts Apple Pay or maybe on a website that accepts Apple Pay.

The thinking I’m hearing through people who’ve talked to Apple is, they’re thinking that for people who haven’t used Apple Pay, this might be a way to get people to add a card to the Apple Pay service for the first time and then maybe once they discover it, use it more often.

KS: Have they not caught on to Venmo and PayPal existing for years now? I mean, it’s kinda late. It sort of reminds me a little bit of the music service. Like Spotify and others were around and then they sort of got to it with kind of a meh offer.

Yeah. I think all of ... as much I and other reporters and analysts in general love to pit these digital services against each other, the truth is a lot people are still exchanging money the old-fashioned way, checks and cash, and so I think there’s room for a bunch of these.

A lot of people don’t realize maybe in the startup world that some banks have their own money transfer services within their own customer base that work pretty well, like Chase. Chase has Quick Pay, which people in my family actually use pretty frequently. The payment volume they announced last year, I think, was substantially bigger than Venmo’s volume.

So there are already a bunch of players. I think Apple thinks iPhones are such an integral part of people’s lives, if they can make it maybe one step easier than some other services — you don’t have to download a new app, for example. They might be able to attract people who haven’t yet committed to a Venmo or PayPal or Chase.

KS: Will you explain Venmo for people, because it’s been ... It’s gotten big because of Apple, being an app on the App Store and Android. So explain ... Venmo has a social element and other parts but explain. Venmo’s probably one of the more popular services. PayPal’s pretty good, too.

LG: It actually started years ago as SMS.

KS: Yes.

LG: I mean, I remember the very early days of Venmo.

KS: So explain Venmo, which I think is the trendiest one, I guess.

Sure, so Venmo’s an app that’s very popular with, say, college age as well as 20- or 30somethings, and I’ve noticed recently middle-age family members that have learned about it from their kids now using it as well. Essentially, you can hook up ... You have to fund your account with either a bank account or a debit card and then it allows you to easily send money to a friend. You can sync your contacts and there’s a social element to it where there’s a feed that shows why you’re paying someone.

KS: They put little emojis.


LG: Like I would put $50 to Jason for friendship.

KS: Friendship or food.

Or like a peace sign or beer ... Or a microphone for coming on your show, maybe.

KS: Nobody gets paid for this fantastic thing.

LG: Vox Media Podcast network.

KS: So it has a social element, that’s what’s different about it than, say, a PayPal, which is a little duller, you just pay essentially. Then you pay a fee or whatever.

It’s fun.

LG: The weird thing is PayPal owns Venmo. Indirectly.

They do, they do.

KS: Explain that.

So Venmo started as a startup that was kinda popular in New York City among a certain set and then could never figure ... They were venture backed but couldn’t figure out how would they would actually make money, because if you charge someone to do this, they’re not going to use it. So they sold, I forget the exact number, but in today’s world not a lot of, millions of dollars but not hundreds of millions of dollars, to a company called Braintree which PayPal later went on to buy for $800 million. And so it was kind of like this sleeper little thing on the side of Braintree that has now become something PayPal loves to talk about because it’s hot with the young’uns.

KS: So they fully own it.

LG: Yeah, because PayPal bought Braintree.

KS: Great. So but they have a different thing. And then PayPal, you do have fees unless it’s to a friend and ... So could you explain how people make money at these things? How would Apple?

That’s the big problem with these and why I thought it a bit bizarre why Square, for example, has continued to invest heavily in its Square Cash app. Which is similar to Venmo, I actually enjoy using Square Cash more, I think it’s an easier product to use.

But it doesn’t make any ... It’s actually a money loser. So, you know, it costs these companies a small amount to process each of these payments between each other but they’re not charging anyone. Unless you use your credit card to fund your account, which I don’t think anyone basically is doing.

KS: So why do them?

So why do them? So for PayPal, they’re doing it because it is a brand that is now popular with millennials, now they’re trying to ... They’ve launched something called Pay with Venmo where essentially, in certain apps you can use your Venmo login information to pay without having to add in your bank account information or credit card information.

And then for PayPal, on that back end it is taking a cut of that transaction because PayPal is on the front end with consumers but also works on the back end for merchants.

LG: It’s also the processor.

It’s also the processor. So PayPal can make money that way. They’ve given very limited information since they launched that payment product, I think last year, about the traction there. So the big question is, do Venmo users want to then go and pay in an app with Venmo? Do they make that jump? I think that’s an open question.

LG: It’s like they’re all filling in the parts, like all of these companies either have the tech in place or they have processors or they have a small business-facing thing or they have a consumer-facing thing. They have an NFC solution, where you’re like tapping to pay and they’re all just kind of like ... It seems like they’re all just plugging in the holes to ...

And I think at a very high level, a lot of this is about not trusting that, 20 years from now, the millennials of today are going to have the same relationships with banks that maybe we had or you and your generation, Kara, had with banks.

KS: Oh, thank you. I kept gold in the mattress, that was my generation.

LG: You might still want to do that.

With banks. And so thinking these products are sort of the gateway into a new type of personal finance ecosystem and that they might, once they have a good relationship with young consumers, they might be able to then build services on top of them into a bank-like institution.

LG: So could Apple become a bank?


KS: Bank-like. So Apple ... I’ve always wondered why Amazon’s not a bank. Why doesn’t it become a bank? Because you do so many transactions there.

Yeah. Amazon has a bunch of ... They don’t get as much attention, but they have lending services with merchants. They’ve dabbled in consumer payments, although they killed a digital wallet effort a couple of years ago that they were looking at. I think it’s all possible. I think the question is, will they go the full extent and actually want to be a bank and regulated as such?

KS: Right, that’s the issue.

Or will they build a skin on top of the existing banking infrastructure? That’s what Apple has done to this point in terms of allowing you to add, you know, basically working with the banks instead of against the banks with Apple Pay and letting you add your existing cards. But, I will tell you, talking to a lot of banks about this most recent story I wrote, they won’t say this publicly but they’re very much worried about the tech companies sort of stepping in between them and their customer.

KS: Yep.

No matter what Apple says, they think there’s at least a possibility that three, four, five years down the line, Apple is taking more and more of that personal financial relationship, or attempting to.

Some of these companies see Square as perhaps a less threatening ... Obviously not as big, not as powerful, and Square still, their core business is with merchants. Apple is a business built upon the trust and love from consumers, so ...

LG: Jason, which brings me to the question about operating systems, or rather ecosystem lock-in. Is Apple going to make this only available to iOS users? There are a lot of services that Apple does just offer within its ecosystem, you have to be on iPhone or iPad or a Mac to use iMessage. But then there are other services like, we talked about Apple Music earlier, which they also put out on Android, so Android users could use it. There are many millions more Android phones out there than there are iPhones, so do we have any idea whether or not this peer-to-peer payments would just be for iPhone users?

So the version that I’ve heard from people who’ve discussed this is that, with Apple, it would at least start as an iOS-only service. I think, you know, Apple has a long history of wanting to control the entire ecosystem — with some exceptions, you just mentioned one of them. I think with something like this I just ... You know, where they think the consumer experience is going to be one of the big differentiators, I have trouble seeing them making this open from the jump.

Plans could change. I’m led to believe this is going to happen in launch but that still may not happen, so there could be some surprises ahead. But to me this feels like something that I’ve heard so far, is that the plans are to keep this within the ecosystem at the start.

KS: They do take it out of the ecosystem all the time. Their music and everything else.

LG: Yeah, iTunes has always run on different machines and then Music, but there are a lot of other things ...

Yeah, but iMessage people have talked forever, right? Like, when is it coming? When it might be coming to Android, that hasn’t happened. Obviously ...

LG: There are things exclusive to Apple TV, or they’re blocking other people from being on Apple TV. There are lots of examples, I think, where Apple is known for its walled garden.

KS: So talk about the power relationships here. They’re scared of them, but what could they be? What could they become, really?

Apple, that it?

KS: Yeah, just walk though, you put your paycheck into your Apple account or what? How could that ... how would it work?

LG: That’s a good question. Would you take a picture of a check and it would go into your Apple Pay?

KS: Yeah, I won’t do that. They have that now.

LG: Or your debit.

KS: You ever see that, Jason? You take a picture of your check and then it deposits. I will not do that.

LG: You don’t do that?

Really? Wait.

LG: I do this all the time.

Your favorite product is the Echo ...

KS: I know.

But you won’t trust a bank with your check? What?

KS: No, I will go, take it right to the bank. I take it to the bank. I’m sorry.

Oh man. You did put gold under your mattress sometime.

KS: Yes, I did. I just opened a bank account for my son which I’m think of closing today but ...

LG: Why?

Let me just ... I think this can go in a bunch of different directions, but the point you just said about the bank account with your son, I think there’s some teens today who, there’s at least a possibility that they will not open or not be regular users of a bank account 10 years from now. Like we are. I just think ...

KS: What do they do? Where does the money go?

LG: Because you can carry a balance in these apps.

KS: Right.


LG: If you sent me $300 right now via Square Cash or Venmo and I didn’t use it to pay somebody else or buy something or cash it out to my regular bank account, it would just there.

KS: I would like a place like Gringotts in “Harry Potter” where it would just be a pile of gold sitting in a thing and little trolls would get it for me.

I was asking one of our colleagues — who I will not name, but is younger than all of us, by a lot — whether they’d be attracted to an Apple virtual debit card if the sole reason to use it was basically being able to use money someone sent you that very day to buy something versus having to wait maybe a day or two to see it land in your bank account. That person said, "Yes, absolutely. Like sometimes I’m not sitting on a ton of cash and I want to just spend what’s in my Venmo account." So ...

KS: Yeah, I’m real rich so I don’t care about that.

LG: Sometimes it’s actually a pleasant surprise if you forget what’s in your Venmo or Square Cash account and then you go to pay someone back for something and you’re like, “Oh, I have a balance sitting there.”

KS: I don’t think about that.

LG: Oh God. Go buy your $12 juice and Jason and I will finish the podcast.

KS: No, but it’s interesting how people do think of banks.

Can we talk about juice for a minute? Can we talk about juice for a quick second.

KS: No.

LG: Yes, we can.

Okay, I’m gonna confess that, after that Bloomberg takedown of Juicero, I still want a Juicero. If that price ...

KS: You know, we discussed this thing, this takedown. We discussed rolling the thing on the show with this guy.

LG: We had Doug Evans. He was the CEO and he was ...

KS: And we discussed rolling the packs, why can’t ...

LG: You actually said, “Why can’t I just squeeze it with my hands?”

KS: Yes.

LG: Or you said, “I thought you’re supposed to squeeze it with your hands.”

KS: Or you could and people have done it and it works just as well. Then he started to defend his thing.

Well, the part they haven’t explained publicly, then we can move on, is that — I think they should — is you can’t ... I mean, the squeezing thing is ridiculous and they should have known this was going to come out at some point. On the other hand, you can only squeeze a few of the ones they sell and get as much out of it as the machine does.

KS: I’m gonna send it to you and pay for it via Venmo.

I think the price is going to come down.

KS: You know what? Guess what? You’re getting one.

LG: Jason, when’s your Recode ... Actually, I know when you Recode anniversary is. It’s like ... Isn’t it like December or January?

No, it’s right around now. My first official day was, first day I started writing was like May 20th.

LG: All right, so he has an anniversary coming up.

KS: How many years? What anniversary?

LG: It was 2012.

This is only four, nope, 2013.

KS: It’s all right, you’re getting a Juicero, Jason.

LG: Really? That’s so weird, I have a weird memory of when Jason started.

They won’t ship to New York yet. They’re not in New York.

KS: I will get them to ship to ... Somehow I bet they’ll ship for me.


KS: But let me ask a last question. So in future you’re talking about this idea that people ... You know, bitcoin was a thing, this was thing, what do you imagine the future of payments is, because these banks aren’t gonna go away easily. And of course, President Trump, as usual sticking his foot in his mouth, said he was gonna split up the banks, which is trying to be both investment banks and commercial banks because they’re so big. Bring back the glass, I think steel, something like that.

What is the future of payments? Who’s gonna control it? Who will be the player? Will it be the banks, will it be tech companies, credit cards?

Credit card companies have so much power that it’s hard to imagine ... they are called networks for a reason. There’s a network effect of where they’re accepted everywhere and that’s hard to come in on top of them there.

I think Visa and MasterCard are in pretty good spots. I mean you will get, I’m sure you’ll get maybe some people to say I’m crazy and poke holes in that. But they just feel too embedded right now.

The banks are in competition for young people with money over the next five, 10 years. These are the early days, but it feels like one of these tech companies or digital-first companies is gonna continue to build services on top of the ... build a big customer base and be something of an alternative. Maybe you won’t be able to fully ... You’re not gonna care about check-writing in five, 10 years if you still do today and so I just think in this world, trust is obviously big but I think a modern, easy-to-use experience is something that tech companies can do better in a lot of cases.

KS: I agree.

LG: I do wonder about the fraud though because ...

KS: Yeah, we didn’t get into fraud.

LG: I mean, that’s a huge thing too. So right now, Jason, if I’m using a debit card that’s issued by my bank but it’s Visa debit card, and let’s say that card is skimmed, which maybe won’t be as much of an issue in the future because of EMV, which the U.S. has been slow to adopt but that is supposed to help against things like skimming or physical fraud. If that happens now, who absorbs that cost? Is it my bank or is it the issuer? And in the case of something like an Apple debit, or a Square debit, who absorbs the cost of that fraud?

So you’re saying, if Apple had it’s own debit card?

LG: Yeah.

Yeah. So, I believe in that instance, Apple would take the hit. I think some of these businesses, a business like Apple’s scale, they are not novices when it comes to fraud. I’m not saying they have the expertise that the banks or the networks do but this would not be starting from ground zero.

I think, though, there was a lot of noise around fraud when Apple Pay launched and banks were not happy with what they were seeing, but then again, if you talk to people about ... if you talk to banks about any app right now that’s getting a ton of volume, for example Uber. We were just talking to someone the other day who was saying, “We love Uber, as a bank, because of the volume we’re getting from our card payments in it. But man, the fraud has been an issue.”

And so, it’s certainly something ... Will fraud be the deciding factor between whether one of these companies breaks through and is a real challenger? I doubt that would be the No. 1 reason but it’s definitely a factor. Sure.

KS: Fraud has gotta be. Since the dawn of time, when we had stones, I’m sure there was fraud with stones and fraud with this ... I mean now it’s incredible. I just got something in the mail about another credit card that was for another account that was compromised in some way. They’re all compromised.

The gold in the mattress?

KS: The gold is never compromised. I have a gun and the gold and there I am. Unless I can’t shoot straight, otherwise it’s just ...

LG: What did you just send money to?

KS: I just PayPaled someone. For the second time using PayPal.


KS: Yeah. My kid’s tutor.

LG: I haven’t used PayPal’s app.

KS: It’s good, it’s fine. I just forgot, and then I just, as you were talking, I realized I owed this young man — who tutors one of my sons — money. So I paid it.

LG: I was gonna say, that’s not your son. I can see it right now. Speaking of fraud, I’m peering over your shoulder at your payments app.

I have an anecdotal benchmark that I use to learn about when a product is going mainstream and it’s internally, in my head I call it the mother-in-law metric. Basically, when my mother-in-law starts using something, it’s usually a few years after people in their 20s who are early tech adopters. My mother-in-law, great woman, just started using Venmo in the past couple of months. She asked me the other day if I knew what Venmo was, she was gonna teach me.

KS: Oh cool. The only part about Venmo is the social element that I don’t like.

LG: You don’t like that?

KS: Only because I know who drinks too much.

LG: Well you can make those private too.

KS: No, I know, I’ve asked like Casey.

Everyone likes doing it, right?

KS: Casey paid me rent publicly, and I was like, “And no!”

LG: Yeah, because people will often write nefarious or explicit things on purpose, because they really just paid a friend for dinner but they’re gonna make something up that’s ridiculous.

KS: Right. But a lot of it’s there that’s truthful and again, I think, “That person drinks a lot. I look at it and I see when buying drinks, I’m like, “Wow, that’s the tenth drink this week.” It’s interesting.

LG: Mine would be like cat sitter, cat food, cat sitter again. My cat sitter only takes Venmo, but then I got my family, Jason’s point about the family network effect. I got my family, some of them, using Square Cash after a recent family vacation because we just needed to pay each other for the house we were staying in and stuff like that. Once people started using it, they were really into it but that barrier was fairly low. That’s the thing too with Venmo ... No, I mean Square Cash, there’s no social feed.

KS: Do you do public on Venmo all the time?

LG: No, private, almost entirely private. But I do like creeping on other people’s Venmos. It’s fun. I do.

KS: All right, on that note, Jason ...

Stay tuned, we’re gonna be answering questions about our payments apps for our readers and listeners shortly, but first we’re going to take a quick break for a word from our sponsors. And I say Ka-ching. Well, you’re supposed to say Ka-ching because I’m reading it.

LG: Ka-ching, Kara.

KS: Jason, please say Ka-ching because it could also affect ...


KS: Thank you.


LG: I just had an idea.

KS: What?

LG: I think we should start a peer-to-peer payments app and call it Ka-ching.

KS: Okay, keep moving on. Read the next advertising Ka-ching.


KS: All right. So you’ve been listening to the show, you know how it works. Every week we take tech questions from our readers and listeners and we try to answer everything we can. This week we’re answering your questions about Apple Pay and other payments apps and we have the fantastic Jason Del Rey, the best damn e-commerce reporter you can find, according to Peter Kafka and myself and the rest of us. So Lauren, ask the first question.

LG: First question’s from Tom Maxwell, he’s @TomMaxwell on Twitter. “Thoughts on why Starbucks has done so well in mobile payments?”

KS: Yeah, I use that a lot.

LG: Good question.

Because you’re actually getting some value out of it, which is, you can link your loyalty card and manage it all from that same app. That’s my take. What do you think, Lauren?

LG: I think it’s because you’re getting a latte value out of it.

KS: Free food, free things.

LG: That just went straight over Kara’s head. That was the worsT joke ever. I said a latte value.

A latte, oh.

KS: I wouldn’t have got that Lauren, zero people got that. It went right over everybody’s head.

LG: I’m sure all of the listeners that are sitting in their cars right now and very happy I made that joke.

KS: That was a grande error.

But seriously, people in tech circles love to talk about how the QR code or any kind of scanning code is dead, but Starbucks has done really well. Not because of the code, because of the value.

KS: Let me also say, everyone in the store knows how to use it. There’s no stupidity, like a lot of the stuff is around ...

LG: It’s fast.

KS: But the employees know it, you know what I mean? It sounds dumb, but every time I go to a store, they’re like, “How does this work?” And so there’s a training or something that goes on, so they know how to use it. You get free lattes and it’s just there. It’s just valuable, it’s just absolutely valuable. It’s easy to use and it’s well done. There’s too many steps, though, I would say. Can you speak to them, Jason? There’s too many steps.

LG: Well, they’re also pretty early in their app, right? Relatively.

KS: There’s too many steps, there’s like four steps to get to the payment. I like it, we like it. We like Starbucks, congratulations Howard Schultz, you should be president of the United States, which you’re running for anyway.

LG: Really?

KS: Yeah.

LG: Is that true?

KS: That’s what I’ve heard. Free coffee for everybody.

LG: That’s a big scoop.

KS: It’s been written a lot.

@JoeyPore: “Apple Pay seems like the obvious choice for retailers, more secure, faster than EMV, fingerprint auth. Why so slow adaptation in the States?”

Americans are dumb.

KS: Well we know that.

Seriously, it’s not obvious on the surface, it’s not obvious to many people that the phone is quicker or easier than your card. So that I think is No. 1. Two, on the merchant side, it’s a cost thing. So historically it’s been, “Well I’m gonna need new equipment to allow for this.” But it’s the chicken and egg problem: If people aren’t using, why am I gonna put in the equipment? If I don’t put the equipment, people are never gonna learn how to use it.

Over the last year or two, we’ve had merchants that have been basically forced to upgrade — or incentivized to upgrade — their equipment based on a change on who has to take the shoulder on fraud when it happens. And so a lot more merchants now have the technology to do it, I just think it’s gonna take time to get people into a mode to think this is quicker and safe. I think most people don’t think about it, they just pay with a card or cash and think that’s easy enough.

LG: Certainly it’s faster than EMV.

KS: It is, it is. All right, next one.

LG: Next is from Maxim, @MaximHarper on Twitter. “Do you think Apple getting into peer to peer validates the viewpoint that owning the user experience is key for “winning” personal finance and payments?”

I think they think that. We’ll see if that ... I will say, that’s all Jack Dorsey talks about when I had asked him about ... One of the big reasons he talks about investing in Square Cash is he thinks people want a simple, modern way to manage their finances, and Square Cash is really big. It’s in the Top 5 finance apps on iOS, along with PayPal and Venmo and I think one of the big banks. So Apple and Square, I think, believe this. We’ll see what happens.

LG: Can I just say, by the way, that we’ve actually turned Square Cash into a verb by calling is Squash and I really think that Square should adopt this.

Who’s we so I can make sure not to talk to them ever again.

LG: People that I use Square Cash with.

KS: Nobody.

LG: No.

KS: It’s nobody.

LG: They should use this and you are welcome.

KS: Missed your career in marketing.

LG: Instead of saying, “I’ll pay you via Square Cash,” you can just say, “I’ll Squash you $50.”

KS: Nobody’s gonna do that. Not ever.

LG: I like it.

KS: Never happening. Jason’s being polite but I’m just gonna give you the news on that one.

All right, “Should Venmo, Square Cash fear a default peer to peer app? What’s the likelihood of major banks signing on?”

Two different questions, right. So first, I think everyone pays attention when Apple enters a new space. I think services have not been their specialty historically so ...

KS: No, they’re not good at it.

LG: Ping!

KS: Remember Ping?

I heard about that from my grandparents. But ...

LG: Ping!

But so, yes, I think everyone’s paying attention. I think Apple has a lot to prove in this space.

Second question was?

KS: Banks.

Oh, will they work with banks? So they can do this without the banks sign-on by working directly with Visa that has a product that Apple can use for people to link up their debit cards with this peer-to-peer service. I think it’s possible the bank will also work with them, I think it’s like an ongoing tug of war between Apple and the banks over the last two or three years. Apple comes into these meetings like you think Apple would, banks realize how much power they have in their world but realize that Apple is its own beast and so there’s constant negotiations. So that’s not really an answer.

KS: Yup. Same thing would happen in Hollywood. All right, next one. Apptopia, Lauren. “Venmo group Q1 downloads, 115 percent year over year. It also grew MAU.” What’s that again?

LG: Monthly active users.

KS: “Monthly active users 53 percent year over year.” Okay, this is probably from the Venmo people.

LG: No, I think Apptopia is a third-party service that does research into apps.

KS: Anyways, so it’s growing. People like the Venmo.

It is. The growth is still ... a lot of apps would die for that in year whatever Venmo’s in. It is, growth is slowing, but yes, it’s growing ridiculously fast, as Zoolander would say.

KS: Yup, I like the Venmo.

LG: The Venmo?

KS: The Venmo, I like the Venmo. All right, let’s move ...

LG: Actually I’m gonna ask you this question because you spoke with this person. Someone named Bridget McGraw asks, “How do you think Tristan Harris and the Time Well Spent movement would see this? Is a blatant conversion of attention to money or is it altogether separate?” So you interviewed Tristan Harris, tells us a little bit about ...

KS: Yeah, Tristan’s coming to the Code Conference also.

LG: He is? That’s great.

KS: To talk about these issues. I think he’d like this BECAUSE he likes utility apps. He’s not ...

LG: Tell people who he is.

KS: Tristan Harris is a thing called Time Well Spent and essentially he says all digital issues are time suck and we have to figure out a way to control it. He worked at Google and other companies to suck your time away from you, essentially. He knows how to do it. He essentially says there’s an attention slot machine going on. But he talks more about how we control this and one of the ways is only have utility apps on the front screen, so he was trying to get Apple and Google to do that.

So they’d say Uber is a utility app. You don’t open Uber and hang out with it very much, you just do what you do with it. Same thing with these payment apps. I think he’d probably like ... I don’t think he has a problem with them. You don’t hanG around with a payment app — except me, trying to figure out who’s drinking too much among the people I know.

LG: I guess on a philosophical level, if you become obsessed with them then you’re obsessed with the exchange of monies in some way. But I don’t ...

KS: These are utility apps.

LG: You’re gonna transfer money anyway.

KS: They’re not spend a ... you do what you want to do with them and you move along kind of thing, which is probably better for a lot of these apps. Next one, Lauren.

LG: Next one, so we have a few questions that came internally and ...

KS: Oh no.

LG: Yeah, and I’m gonna throw them out there because I think they’re good questions.

So Zach Kahn, who does work for Vox Media: “Why don’t credit companies and banks build their own versions of these? I feel like my dad would use Chase whatever but won’t go near Venmo.”

KS: Except for Jason’s mother-in-law.

Earth to Zach, Chase has something called Chase ...

LG: Quick Pay, right?

Quick Pay and it’s not it’s own app but it’s really pretty good for a bank.

KS: Pretty good for a bank.

And a bunch of banks have also worked together to create a stand alone app called Zelle. Z-E-L-L-E.

KS: Oh my God, that meeting. You know, I’d like to bust into that meeting and say, “Stop!”

LG: Stop it, you should be using Squash!

I would tell you more about Zelle but they once labeled me, in a public Twitter list, as a tier-two journalist so I’m done talking about Zelle. And really ...

KS: Tier two! [laughter]

And really, when was the last time any joint venture between a bunch of giant companies has worked, so ...

KS: Never. Never. We hate the Zelle people.

See ya, Zelle.

KS: They’re tier two in the payments space. They’re tier six in the payments space.


LG: That’s the funniest thing anyone’s ever said on Too Embarrassed ...

KS: All right, Eric Johnson is sitting right across from us, laughing away. I have a question this week. How important is Venmo’s social media timeline to its success? Will Apple need to compete with that? Apple’s gonna do that so awkwardly, is that going to happen, Jason? It’s gonna be so awkward. “Hey kids, hi ...” That’s what their music service feel like.

LG: There’s gonna be like confetti.

So my take is, it’s like a bonus feature that has kept people engaged and think it’s fun, but I’m really old at 35 years old so I may not know the truth. I think it would be really awkward if Apple did it, but Apple does have the exploding confetti in the iMessage.

KS: I like that. Who doesn’t like that? The exploding thing’s cool.

I don’t like birthdays so ...

KS: I’m gonna send it to you right now. Congratulations again.

Here’s your Juicero.

KS: Here’s your Juicero, yes. I love these balloons.

If you’re gonna give me the Juicero, let’s wait for version two.

KS: So do you think it’s important? You’ll get the friggin’ Juicero press.

I don’t think it’s ...

KS: You have to buy your own juice though, I’m afraid. That’s where the costs are.

That’s why I want you to wait for version No. 2.

KS: Then you’re gonna show up and be like, ?I need a raise to pay for juice.” Juice packs. We will give that to you.

LG: I’m still recovering from the tier-two journalist.

KS: So the last question. The last question, Lauren.

LG: The next question is from ... I’m gonna re-name Walt Mossberg. In his post-retirement career I’m just gonna call him Walk Moss-burn because all the burns are going to come out. He says, “If I have Apple Pay and I use it in an Apple store to buy an Apple watch, do I get a prize?”

KS: All right, Jason? If he’s all-Apple, all-in.

LG: He didn’t make a serious burn.

I hear, yes, Apple will give away a second Apple watch for free. Tim Cook will say, “We increased our Apple watch sales by 100 percent.”

LG: The size of a small Fortune 500 company.

KS: I just recently used my Apple watch to get on a plane. It was so awkward I almost broke my wrist but I did it. I had to ...

Oh you had to turn it?

KS: I turned it and everyone was irritated by me behind me. It didn’t work very well. But nonetheless ...

LG: True story. I did that before the Apple watch was out, I had flown to New York to pick up an early loaner copy.

KS: Because you’re a tier-one journalist.

LG: Because according to Zelle, I’m tier one and I was flying back and I tried to stick ... I was like, “I’m gonna be so cool.” And I tried to stick my wrist under the scanner and held up the line and a bunch of people were super irritated and then a bunch of people on the plane were like, “Is that the iWatch?”

KS: So there you have it, so you had a moment in the sun with your watch, didn’t you?

LG: Yeah, except it didn’t fit under the scanner.

KS: All right, Jason, I have one last question. Do you imagine, like she’s talking about using a watch or using it to pay, because they had that for a while. Then there was the Fitbit’s paying or the Jawbones paying and you know all kinds of ways. If you had like 100 years, how are people gonna be paying? Are we gonna have a thing in our eye that we just click or something embedded in us or how do you imagine? Won’t there be any money? There won’t be any money, you know we’ll get into that “Star Trek” universe where nobody ...

It feels like we should get to a place where you don’t have to tap anything and you ... there’s either some facial recognition or something associated with your body that allows you to walk in and out. Or Amazon just takes over and everything’s linked to your Amazon account. I think way down the line we’re talking about computer vision and machine learning and whether we like it or not a store knows who we are, where we are, when we’re there and what our payment information is and just docks us on the way out.

LG: Sure, and we’ll talk about that next because that’s a really interesting thing Amazon’s getting into ...

Which was Square Wallet like 10 years ago.

LG: Oh yeah, you’d walk into a coffee shop that was using Square Wallet on their terminal side and I think you had to be connected to Wi-Fi and then something would pop up in your app and it was supposed to appear simultaneously on their payment terminal. It didn’t work very well, but they were supposed to just look at a picture on their payment terminal and know it was you.

I thought you had to say, “Hi I’m Jack.” Because that’s what Jack always says, but it never worked for that.

LG: And I will say this, there is a lot of room for improvement, and I think fraud is a pretty big concern, but overall this stuff is pretty easy to use. Like tap to pay ...

KS: I don’t think it is. I think it’s still ...

LG: Tap to pay is still pretty great. EMV is a pain but the supposed addition ... I’m willing to wait the few extra seconds, some people have really strong opinions about how long it takes for chip readers to work but I personally don’t mind waiting a few extra seconds if it means I have less chance of my credit card getting skimmed.

KS: Yep.


LG: The way that we can just text message our friends now to pay them, this is all like within the last 10 years. That’s actually pretty remarkable.

KS: What I want, as I’ve said many times and no one listens to me, this is from Apple. I want to walk into my Apple store, since I’ve bought so many hundreds of thousands of dollars worth of things for work and personally there over the years. I want them to know precisely who I am and want them to treat me slavishly like, “Hello Kara, how are you doing? What would you like? Would you like a champagne?” I would like that. And I would like to be able to try out the products and not be behind some teenager that’s sexting nearby when I want to look at something.

LG: But what you’re describing is not just a technology.

KS: I want the whole experience.

LG: A technology, I don’t even want to call it a problem.

KS: Yeah but it is, it woos me.

LG: Technology barrier, but it’s about loyalty and customer service too.

KS: Yeah but it knows me automatically via my phone or some chip in my eye or something else. Jason, I would like that.

Kara, this is going to go very well with your “I’m one with the people” mayoral campaign.

KS: I want it for everybody.

LG: And now she’s going back to the bus. She didn’t really take the bus here.

KS: No. When I get on said bus, they know it’s me and they go, “Kara, it’s you again for the hundredth time. Would you like the special seat in the back?” Everybody should be treated like this, everyone should be known through life. That’s my campaign, everyone is treated slavishly by customer people and they focus on that rather than the payments. Thank you very much, that is my platform. I feel like you should vote for me. Anyway, Jason.


KS: That was a very good burn at the end, you are very fantastic. Okay. Tier one with me, even though you’re tier two. I want to talk about that tier two thing, that makes me very unhappy about that situation.

Oh it was ... I laughed for probably 12 minutes straight when I saw that.

KS: A tier ... The word “tier” is really the best part of the whole thing.

LG: And then they made a public list, like you could see which tier you ...

Yeah, there were some bad journalists on tier one. Made me feel that much better.

KS: All right, this has been another great episode. This has been a particularly great episode of Too Embarrassed to Ask. Jason, we’re gonna have you on again and thank you for joining us.

Thanks for having me.

LG: Thanks Jason, I’ll pay you later for being my friend.

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