82 Digital Wallets Could Disintermediate Merchant Banking Vertical software platforms can serve merchants with financial services. With digital wallets, these platforms not only enhance convenience but also monetize deposits, reducing the number of steps from payment authorization to merchant settlement from 16 to 5 and more than doubling the platform take rate.* BEFORE: Status Quo Merchant Settlement AFTER: Closed-Loop Merchant Settlement Steps: Card Network Steps: Card Network 9 + 7 = 16 3 + 2 = 5 S T E PSP Take Rate: PSP Take Rate: L 14 13 12 15 L 1.1% 2.3% 2.4% A W L Consumer Bank Consumer A Acquiring Bank Issuing Bank Acquiring Bank T I Account Digital Wallet G DI 11 16 4 In-Network Merchant 10 Payment Service Merchant Bank Merchant 5 Payment Service Provider Account Digital Wallet Provider Transaction Authorization Transaction Settlement *Payment processes and associated fee estimates are rendered for illustrative purposes only. Sources: ARK Investment Management LLC, 2024. This ARK analysis is based on a range of underlying data from external sources, which may be provided upon request. Forecasts are inherently limited and cannot be relied upon. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Past performance is not indicative of future results.