That would be quite a play. Stripe, PayPal, Venmo, Braintree, Xoom all under one umbrella. The Herfindahl-Hirschman Index (HHI) for online card-not-present (CNP) checkout on that is going to be absurdly high and this will take a lot of convincing to beat antitrust. They will probably have to unwind Venmo and Braintree.
The Herfindahl-Hirschman Index is a measure of the concentration of a market based on the market-share of the firms participating in it. Very much like the Simpson's index that tells you the probability of two organisms in a place being of the same type when randomly drawn.
It's just \sum_i^n h_{i}^2 sum of squares of market-share.
Payment processor margins are already very high, especially considering they are basically low-tech utilities.
If the US had functioning antitrust laws it would be looking at their margins and be considering whether to break up some of the existing players, not considering when allow even more mergers.
Seeing as payment processing is already a highly regulated industry, I hope that the anti-trust issue is simply ignored, as a consumer. I don't really want to maintain six different payment processor accounts, or have thoughts about which payment processor I prefer. I just want there to be one that everyone uses and that doesn't get in the way. Some countries have a single government-controlled online payment processor, and that seems to work. The ideal American way might be to have a single technically-private-sector highly-regulated one.
I've been thru 3 or 4 'lifetime' bans with PayPal. Just ask to be reinstated during the next big shakeup (now) and they'll let you back in. They want your money. They want your business. The exact same things you couldn't sell 25 years ago, the things that got you banned, are now listed online without care. They literally forget.
Why, what is the play here? I know PayPal is used extensively in some countries (like Brazil?) but in most countries there are other/local services that have substantial market share and I do not think that PayPal can compete.
I'm not sure I like this idea. Braintree is a legit competitor to Stripe. I'm guessing they have some informal agreement to keep transaction fees about the same but if they become 1 company, what's to stop Stripe from raising fees even more?
I'm not a fan of either to be honest, PayPal once told me I was wrong with something related to taxes and a bunch of different reps told me what I was saying and reported was impossible. Their tax division specialists also replied by email with big bold red letters outlining how it's not possible and that I'm wrong multiple times. They were contacted through support cases I opened with other reps on the phone since they aren't directly accessible on phone.
Then I said I was canceling my account with them if this wasn't resolved since it would have resulted in me needing to pay $400 to have my taxes amended. Long story short, after being ghosted for 3 months they replied to me saying I was right and they indeed had the impossible problem, then fixed their tax forms a week before taxes were due.
It's really bad that a random person on the internet discovered a huge issue with one of their partners and their instinct was to require ~10 hours of back and forth phone calls, multiple emails, me giving them the likely problem and solution on day 1 only to be lead on and ignored for months until the very last second.
I typically use paypal for paying contractors, but try to "load balance" across a couple competitors because you never know when one of them will flag your account, nor for how long it will be flagged.
Consolidation in this industry puts my ability to transmit money at greater risk.
This would be amazing! Its such a pain having to set up two payment solutions as a merchant and as a buyer it would be great if I could use my paypal credit on whatever purchase I want. Consumers want paypal and merchant want stripe. I really want this to happen.
The more time goes on, I'm starting to come around to paypal's original vision of decentralized internet-native money as being the future.
The more the international system breaks down and countries abuse their power via the banking system (especially the US, and from both parties), my opinion of cryptocurrencies transitions from "annoying scam infrastructure for hucksters" to "actually...you might have a point." Still a ton of growing up that needs to be done by the industry.
But no company or country should be able to tax the global economy via payments monopoly and you should not be able to be arbitrarily banned from the economy by these global supra-national intermediaries that have no court system and no democratic levers to pull to reign in their overreach in your country outside of desperate social media posts.
Stripe brags incessantly about how much of global GDP they facilitate...which, cool. I don't doubt there's an insane amount of work required to herd all those global cats and make payments just work. But, they're literally taxing the entire world as a % of GDP due to this dystopian legacy system? Is that the best outcome for humanity?
I'm not sure how this is a good thing. There are already very limited options to accept payments online, consolidating two of the major ones is not a great thing.
Not good. Stripe makes restrictions that PayPal allows (cannabis adjacent, adult adjacent) that Stripe blocks. Many vendors will be negatively impacted by Stripes morality police and selective application of their policies.
Reading about Stripe’s stablecoin ambitions is funny. X uses Stripe, but Stripe on X doesn't accept my Bybit stablecoin cryptocard for a Pro subscription, ads, or boost purchases.
In some ways, I would rather Stripe have the market power here to negotiate against Visa & Mastercard than Visa/Mastercard holding the reigns over a fragmented digital ecosystem.
69 comments
[ 4.5 ms ] story [ 86.3 ms ] threadIt's just \sum_i^n h_{i}^2 sum of squares of market-share.
Enjoyed that. Thanks for the discovery.
A pity that HN can't render TeX or MathJax or whatever.
There's also this other variant of the Simpson's Index: https://www.thesimpsonsindex.com/
If the US had functioning antitrust laws it would be looking at their margins and be considering whether to break up some of the existing players, not considering when allow even more mergers.
Cool, awesome, that's gonna be a great monopolistic picture for those that get unbanked across the entire Internet.
It doesn't have assets? It's not a bank
Is it because PayPal is integrated already into so many websites?
Wouldn't it take decades to make back $50 Billion in fees?
I'm not a fan of either to be honest, PayPal once told me I was wrong with something related to taxes and a bunch of different reps told me what I was saying and reported was impossible. Their tax division specialists also replied by email with big bold red letters outlining how it's not possible and that I'm wrong multiple times. They were contacted through support cases I opened with other reps on the phone since they aren't directly accessible on phone.
Then I said I was canceling my account with them if this wasn't resolved since it would have resulted in me needing to pay $400 to have my taxes amended. Long story short, after being ghosted for 3 months they replied to me saying I was right and they indeed had the impossible problem, then fixed their tax forms a week before taxes were due.
It's really bad that a random person on the internet discovered a huge issue with one of their partners and their instinct was to require ~10 hours of back and forth phone calls, multiple emails, me giving them the likely problem and solution on day 1 only to be lead on and ignored for months until the very last second.
Consolidation in this industry puts my ability to transmit money at greater risk.
The more time goes on, I'm starting to come around to paypal's original vision of decentralized internet-native money as being the future.
The more the international system breaks down and countries abuse their power via the banking system (especially the US, and from both parties), my opinion of cryptocurrencies transitions from "annoying scam infrastructure for hucksters" to "actually...you might have a point." Still a ton of growing up that needs to be done by the industry.
But no company or country should be able to tax the global economy via payments monopoly and you should not be able to be arbitrarily banned from the economy by these global supra-national intermediaries that have no court system and no democratic levers to pull to reign in their overreach in your country outside of desperate social media posts.
Stripe brags incessantly about how much of global GDP they facilitate...which, cool. I don't doubt there's an insane amount of work required to herd all those global cats and make payments just work. But, they're literally taxing the entire world as a % of GDP due to this dystopian legacy system? Is that the best outcome for humanity?