Patrick McKenzie (patio11) deconstructs the "original sin" of payments: building a global financial substrate on shared secrets that were distributed promiscuously to function. He examines the multi-decade game of Whack-a-Mole played by the industry to balance the "optimal amount of fraud" against the catastrophic conversion hit of high-friction security. From the physical failure of terminal buttons to the smartphone finally solving the lifecycle problem of cryptographic tokens, Patrick explores the technical and social reasons why we’ve moved from "something you know" to the "continuity of access" provided by the device in your pocket.

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Full transcript available here: www.complexsystemspodcast.com/secondary-auth/

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Presenting Sponsors: Mercury & Granola

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Links:

Emily Sands on Complex Systems: https://www.complexsystemspodcast.com/episodes/the-past-present-and-future-of-ai-with-stripe/

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Timestamps:
(00:00) Intro
(01:32) Publishing the shared secret… again
(03:39) Manufacturing shared secrets at scale
(07:51) Something you own, take one
(10:10) Sponsors: Mercury | Granola
(13:48) Something you own, take two
(18:26) Something you own, take three
(21:24) One other semi-successful method: positive pay
(24:45) Wrap

Secrets designed to be divulged and other payment oddities

Complex Systems with Patrick McKenzie (patio11)