I will start by saying not only do I get the idea but I also like it at a high level.
However, my experience in my job leads me to think the biggest problem would be regulatory. You would perhaps struggle to comply with FSCS scheme rules in particular for maintaining a Single Customer View file in a timely fashion.
Additionally the firm would need to meet such large capital requirements for both investment and operating a payment account. There are ways around the latter with certain types of clearing account providers which hold capital at the Bank of England and do not invest this themselves.
The line of credit is a good idea, but only really to de-risk interchange fees for card payments. Each account holder would need to be issued a line of credit up to their total investment if you really wanted to allow someone to spend all they have.
E.g. imagine I had £3,000 invested and I went and bought a holiday for £2,500 - there would need to be sufficient credit to de-risk that amount while it is cleared but the firm can allow the debit card payment to instantly be authorised.
£2,500 isn’t such a massive problem, but imagine if you wanted to allow people free access to all their cash. On average each year I save £22,000 - I would need a line of credit to match which would then present problems with my access to other credit or even a mortgage potentially.
A more minor issue, would be if there was a difference / fluctuation in the sell price in the short time between authorising and selling. Who pays the difference? This is relatively minor as firms such as Mastercard require strict authorisation timing, such as a sub 600 millisecond response for authorisation in some cases.
I think a good option would also to only allow Apple Pay or PIN payments. Otherwise how to you prove confirmation of instruction to sell? If someone stole my card and spend via contactless, I could say I didn’t authorise these and now I have lost money on an investment that dropped in price. Who pays?
I know it’s just an idea currently and appreciate you may not be serious about taking it forward, but if you ever get capital for investment, I’m interested in helping resolve all of the above