80 Digital Wallets Are Likely To Disintermediate Consumer-To-Business (C2B) Payment Ecosystems Transactions funded with digital wallet balances bypass banks and card networks, saving interchange fees for payment facilitators, merchants, and consumers. In ARK’s view, vertical software platforms with scaled consumer and merchant ecosystems will leverage digital wallets to facilitate closed-loop transactions.* BEFORE: C2B Card Payment Authorization AFTER: C2B Closed-Loop Payment Authorization S Steps: Card Network Steps: Card Network T 9 3 E L L A PSP Take Rate: 5 6 PSP Take Rate: W 1.1% 4 2.3% L 3 A T I Funding G Issuing Bank Acquiring Bank Issuing Bank Acquiring Bank DI Source 9 2 1 7 In-Network In-Network Consumer 1 Payment Service 8 Merchant Consumer 2 Payment Service 3 Merchant Provider 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.