Good points. The Wallet is the consumer side of the proposition PayPal will offer. The merchant side is the Card Reader. The consumer can use the PayPal wallet at PayPal equipped merchants. This will be similar to the way it is used at Home Depot, in the PayPal deployment.

And you are quite correct, Ryan is not only a great writer he is also a great journalist. He is usually spot on. My statement about the 1.99% rate is still on, however it was a guess. PayPal may set rates to merchants based on a number of variables. This may or may not be announced on 3/15/2012.

No offense but you said earlier this week that Paypal was going to charge 1.99% which isn’t even close. Ryan’s sources are much better than yours!

http://www.quora.com/PayPal-Wallet/What-are-the-features-of-the-new-Digital-Wallet-from-PayPal/answer/Brian-Roemmele

PayPal will intergrate the new Card Reader with the new Digital Wallet. Of course the consumer will not need to have the wallet to use the system. But the experience would be richer with these options:

Grace Period – This separates the actual purchase from the payment by offering a 5-7 day grace period for consumers to change the underling Payment Card. This means that days after you leave a store you can shift a purchase to another Payment Card or divide it between other Payment Cards, Gift Cards, Loyalty Cards or a Bill Me Later loan.

Installment Payments – Allows consumers to choose to create, ex post facto installment payments on larger purchases. This means that an emergency Refrigerator failure can be a less intrusive experience by allowing the consumer to divide the transaction in to multiple time payments.

Personal Lists – Allow for system wide searches for particular products and allows for comparison of prices. The consumer can then create shopping lists based on the results of the searches driving customers into PayPal Retail merchants.

Found Money – The PayPal Digital Wallet will locate customized deals, coupons and one time offers for items in a personal list. With consumer permission, once the customer is in a merchant location that accept PayPal’s solution, the merchant can target offers based on the shopping lists that the customer has created. This means situational offers can be made in real time.

Spending Rules – This is a budgeting tool that creates specific fund “set asides” like travel funds and sets rules by purchase amount and ties specific Payment Cards to specific merchants. This allows for Payment Card “Air Mile” partnerships, like American Express has with Wholefoods Market to activate without a thought on the part of the customer.

It will be interesting to see how this will change all players in the marketplace both startups and existing Payment Card Companies.