Why Payments Aren't Money Movements

Payments are contracts, and require an ecosystem of tools on top of transfers

Crypto enthusiasts always fall for the same mistake: they confuse payments with transfers.

That’s why, when I talk shop with one of them, the conversation almost always goes to “disrupting Visa”. Can Bitcoin, stablecoins or some other shift the payment landscape so much, that we no longer need traditional credit cards?

No. Because they’re not the same thing.

And look, it’s not that I have any predilection for payment cards per se. They’re an insecure protocol, probably overstretched because we’re using them beyond the intended, face-to-face use case for which they were initially designed.

Payment Cards Are An Insecure Protocol

Still. Crypto won’t make Visa obsolete, because cryptocurrencies are transfer methods, and Visa supports payments.

And that difference is one in which payment engineers fall all the time.

This is The Payments Engineer Playbook, the only newsletter in the world dedicated to the builders of software that deals with money. Today, we’re looking at one of the biggest mistakes that these builders make when they set up to create a payment system: conflating payments with transfers.

If you’re building your payments system assuming that, if the payment has been authorized, the money is coming in, you have no idea how desperately need to read this one.

So let’s dive in.