19 Comments
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Alex Rodriguez's avatar

Packy, your post are probably my fav thing to read on Monday's. A1 content again.

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Packy McCormick's avatar

I really appreciate that, Alexander!

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Alex Rodriguez's avatar

Also, I'm bullish on stripe (top 3 fav private companies). When they go public I'm try to buy as much shares as I can. 100%.

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Marketmaniac's avatar

Nice to see some irish boys doing well but why all the ink on a private company?

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Packy McCormick's avatar

We do a little bit of both around here.

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Val Watkins's avatar

"One of Stripe’s biggest points-of-failure right now is that it’s built on top of existing banking and economic infrastructure..."

I disagree! It's one of Stripe's competitive strengths. By embedding itself into the Visa/Mastercard open-loop system, it captures the long-tail of every single bank issuer and bank merchant on that network. It then does the same with Amex, Discover, and regional variants to capture the whole market. Yes, that brings marginal costs similar to Spotify and the music streamers, but it's also a massive moat.

Banks don't just own the customer relationships on their end of the network, they collectively own the cultural idea of money management in their geographical market. Someone in a Western nation may cancel one card with one bank, but it'll be a monumental paradigm shift for them to move on from the idea that they need a debit or credit card altogether.

This is why Stripe will never be able to fully supplant the card networks. New payment methods layer on top of old ones, but never fully replace them. The idea of a 'cashless society' has existed since the 1960s. Everyone's still waiting for that to happen...

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Maulik's avatar

Would you be able to explain more on what you mean by Visa and MA's open loop system?

I think the new payment fintechs (paypal, square and stripe) are built on the rails provided by the payment networks (i.e. visa, mastercard, amex, etc.) - with the exception of paypal which is also a digital wallet and depending on the method of payment (credit or debit), it bypasses the payment networks.

I would be curious to learn how much of these firms payments volume flows through the payment networks. Any ideas on how to find?

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excelsize's avatar

google "funding mix" or "funding sources"

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Henk B's avatar

Great stuff!

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Javier Morales's avatar

Wow Packy, what an incredible post. Hard to find quality content on Stripe in an organized manner such as this article due to it being private, just subscribed.

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Pranay Karnawat's avatar

This is great! Thank you for writing this :)

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MZ's avatar

Great article and thanks for sharing. A few corrections: 1. Visa has not officially acquired Plaid yet and is subjected to DOJ's investigation. 2. For subscription business, switching or adding another payment processor doesn't need customers to re-enter their card info as such info is already stored in merchants' database.

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Segun's avatar

Brilliantly analysed. Thanks for the amazing work. A lot of insights and learnings here for company building. Obviously biased take but aren't we all?

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ms80301's avatar

Stripe ..is it a Public company????

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Matthew Ong's avatar

What a beautifully well written article ano it Stripe!! Thank you so much for this!

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Eng Seet's avatar

Great thought piece!

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Guru's avatar

Great post ...loved it!!

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Sam Schneider's avatar

Who's going to be the one to finally kill physical money/transactions... I want to pay my taxes in Bitcoin.

Lovely piece, always a pleasure to read your writing.

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Ian's avatar

Fantastic post, I'm also incredibly bullish on them. I would note some of the really interesting work that Stripe are doing around climate, led by @orbuch, I think this also really plays into their competitive advantage and brand. https://stripe.com/blog/first-negative-emissions-purchases

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