Email is a popular technology in part because it doesn’t matter which service you use. A Gmail user can send a message to someone with a Yahoo account and vice versa. Yet when it comes to sending cash on the Internet, services are fractured. A Venmo user can’t send money to someone using Cash App or Zelle, and nor can you can use a bank’s website to send money to those apps.
That’s why a new service called PayID is intriguing. Launched by a coalition led by the cryptocurrency company Ripple, PayID offers consumers the equivalent of an email address—a distinct easy-to-read ID that works with any service provider.
Ripple announced the service on Thursday, touting that it has 40 partners and over 100 million potential users, and encouraging people to sign up at PayID.org.
In theory, this could be a game changer. It means I could create an ID such as Jeff$Roberts, and one day use it to receive transactions from banks, PayPal, Western Union, or even a Bitcoin wallet.
The reality, unsurprisingly, is a little more complicated.
Ripple has dozens of partners, including Bitcoin wallet provider BitPay and a privacy-focused browser called Brave, but none of them are everyday names like Venmo—meaning PayID is, for now, just one more payment silo, and an obscure one at that.
But the service has a chance to grow, given that its underlying code is open source, meaning anyone can build on it. In practice, this means the likes of PayPal or Square could integrate PayID onto their platforms, or even offer them to their customers.
According to Ripple executive Ethan Beard, PayID has a similar design to the Internet’s domain name system, which takes the string of numbers that define a website’s address and renders them as an everyday phrase like Fortune.com.
Even though the PayID system appears relatively simple for consumers and businesses to use, there are competitive reasons why payment companies may be loath to embrace it. Namely, a payment protocol that works across platforms could undercut their ability to make money from a captive user base.
Beard, though, believes payments providers like Square or Venmo may actually come to embrace PayID on the basis of a different competitive calculation—namely that doing so could be a hedge against Libra, Facebook’s ambitious plan to create a new global currency platform.
“Facebook and [Chinese payment giant] AliPay want to create closed, proprietary networks. Even someone as big as PayPal should be wary,” Beard said.
Beard also says that common sense argues in favor of a universal payment ID system. He points out that technology like email and text messaging don’t restrict users to a particular company, and argues that payments should be no different.