84 Digital Wallets Could Disintermediate The Payroll Banking Opportunity Vertical software platforms probably will use digital wallets to link merchants directly to employees, adding monetization opportunities with little to no cost of customer acquisition.* BEFORE: Status Quo Payroll AFTER: Closed-Loop Payroll Steps: ACH Network Steps: ACH Network 9 + 7 + 5 = 21 3 + 2 + 3 = 8 S PSP Take Rate: PSP Take Rate: T 19 20 E 1.1% 2.4% 2.8% L L A W Payroll Service Merchant Bank Payroll Service Merchant Bank L Provider** A Provider Account Account T I G 6 DI 18 21 In-Network In-Network Merchant 17 Payment Service Employee Bank Merchant Digital Payment Service Employee Provider Account Wallet 7 Provider 8 Digital Wallet Transaction Authorization Transaction Settlement *Payment processes and associated fee estimates are rendered for illustrative purposes only. **In this example, we assume the PSP offers a first-party or white-labeled third-party payroll solution. 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.