Well for an expats, it's really a gamechanger not having to play three card monte selecting the correct card to use for each transaction. You would be surprised how many transactions are (accidentally?) geofenced based on where your card is issued from, and Paypal pretty much solves these.
I'm an Indian with a few US subscriptions and Paypal was indispensable for years. When they set a KYC deadline involving some dude in a video call suddenly asking me to produce my Aadhar (national ID), I then discovered those services work with my debit cards perfectly. BTW autonomous charging of arbitrary amounts is not allowed in India, AFAIK.
As a buyer PayPal saved me after being scammed. It was a breeze to claim my money back, once I filed a police report.
Stripe and other normal card processors make it impossible. And before someone says to "charge back" with my bank, my card is from a country where that is almost impossible. In fact I think maybe only in the US that's actually practical, because in Germany I don't remember "charge backs" being a thing when i lived there.
Might work for some countries (like US). But if you are from country with their own currency PayPal will only allow payout to account with that native currency. You get payed in USD you can't payout to USD account if your nation uses different currency. And of course they will also exchange that USD to your currency with their exchange rate that's 5-8% above services like Wise.
Basically you either keep money in your Paypal and use it there or pay their cut. It's simply usury.
Similar same happened to me, but in my country. I got a virtual stripe card to pay for the conference I was supposed to attend to and the fixing of problems took like five business days
Not good. Stripe rejects anyone even close to the regulated cannabis space (with no room for appeal) but PayPal will accept these tranctions. So, this would put a non-zero amount of businesses (that don't even touch that deadly, deadly plant) in a tight spot with this monopolisation of the industry.
> but their banks/underwriters do not have a limitless appetite for risk.
I'm trying not to be snarky here, but I really can't believe anyone can truly believe this.
They almost blew up the global financial system. About once every two decades. What's the risk of accepting some transactions related to weed? (They can always charge more to offset the risk)
It's not about financial risk, it's simply an attempt to exert control over what people could do with their own money.
MJ is still very illegal federally. Presumably anyone doing business in that industry could be sued or just have the feds come down on them. I don’t think we should expect financial institutions to break the law.
Someone new will arise to fill the market gap if there is demand. Saw it firsthand here with the Marijuana industry in Michigan shifting around payment providers to accept credit card transactions after it was legalized. A lot of hoops had to be jumped through. I think it still has the potential to be bad, but it does give opportunities.
Stripe and PayPal have pretty different sets of tradeoffs. There's plenty of reasons to dislike both, but at least right now you get a choice between them. I really hope they won't merge.
> Stripe hit a $159 billion valuation on Tuesday and said it was on track to reach an annual run rate of $1 billion this year.
Wow! This is the quality of reporting from CNBC? The $1B ARR number is just for Stripe's Revenue products (Billing, Invoicing, etc). That doesn't include their main business (payments-related products).
In this case they reported Stripe's annual run rate — a metric that's roughly comparable to annual recurring revenue, but for non-recurring business models.
Maybe if you're being pedantic but let's assume they generate $1B to $3B in payments revenue on top of that non payments ARR. I don't see why you'd assume the former isn't likely to grow and so you might as well think of it as recurring. It's just low margin.
It's hard to turn a sinking product around. There's a cultural problem, and those are very difficult to solve.
There's a Munger quote that I don't quite remember, but it went something like this: "When good managers are put into a terrible culture, it's the culture that wins."
When a manager with a reputation for brilliance takes on a business with a reputation for poor economics it’s the reputation of the business that remains intact
When Seagate (then a reputable hard drive manufacturer) purchased Maxtor (then the bottom-of-the-barrel for both price and reliability) I hoped Seagate would rehabilitate their newly acquired facilities and bring them up to the same quality.
I used to live in the United States and recently moved to Germany. Using PayPal for payments is a lot more common here than Germany. In fact I connected my Uber account to my credit card via PayPal and my partner pays for a lot of things online via PayPal.
PayPal is also used for transferring money between friends and family quite frequently
I have been trying to help someone in Guatemala receive payments from international tourists and PayPal seems to be the best option we've found, even though I don't like using it (horror stories about money being stranded in locked account, etc).
> Dutch people always complain that in Germany they can't use their phones to pay.
I pay p much everywhere with my phone using the Sparkasse apps NFC payment. Maybe it's a north/south divide (assuming the dutch are mostly visiting the north, as I am in the south).
What does this mean for existing users, and the features of PayPal? Which is sending money between family & friends and withdrawing money to my bank account for free.
That feels like it would be a pretty significant blunder for stripe. Paypal is everything that stripe isn't. Legacy, confusing, slow, expensive and hidebound.
When a company with good tech buys out a company with crap tech, they're not paying for crap tech — they're paying for the user base.
I would wager that Stripe has already put together a consumer-cash platform, and is weighing whether to deploy it as "Stripe Cash" or "Paypal 2.0". The former strategy would require a slow rollout that would compete with Paypal, Apple Cash, whatever Google and Samsung’s offerings are called… The latter branding would make them the dominant player overnight.
They're going to become PayPal. There's no scenario where that doesn't happen as they get larger and larger and larger. Especially as competition is eliminated.
On the consumer facing side Paypal is something I use when paying, but AFAIK I can't use Stripe (yet?). Stripe is used by businesses to let me pay with a credit card (or Paypal, Google Pay, etc etc).
I hesitate to post this here but I'm not sure Stripe hasn't become most of those things as well now. It's obviously been very successful and I'm happy for the people who built such a useful service in the early years. But I also mourn the loss of the tidy product, transparent pricing, clear documentation, and legendary support that made it exceptional back then.
$PYPL at $40 was/is free money. Nothing stopping you from getting on the train. 8 PE is insane for a company with brand recognition and market penetration.
I fully agree with your assessment of the company and its valuation.
It's the publication of the rumor and accompanying 10% pop in stock price that's suspicious.
Stripe is overvalued by about 10x judging by Block and PayPal.
Best case scenario: Stripe gets larger, gets bloated, slower, eats some competitors, becomes their competitors. The street presses down on their valuation as their growth races toward single digits. Congratulations.
Block is fetching ~13 times op income. PayPal is fetching ~7 times op income.
Not sure about Block and Paypal, but AFAIK a good portion of transactions on Stripe are made as part of recurring subscriptions or similar. Those can't be migrated to other services easily, so for the time being Stripe will likely continue profiting from them and from the growth of whatever businesses use it for such subscriptions.
People always want the upstart hotness. Look at the shiny growth (which is meaningless if they're just going to end as a slow growth obese giant anyway, it's all rinse & repeat).
Maybe Stripe sees the end writing on the wall and they're going for it while the bubbly action is there.
FedNow is what has PayPal's former investors so terrified (so much so that investors don't even think PayPal warrants a double digit multiple).
No cost instant financial transfers between US financial users is coming over the next decade. The Fed has 1,400 banks onboard so far, up from 900 the prior year (that's 1,400 in two years). Half of PayPal's business goes away over the coming decade.
I think PayPal and Venmo will be just fine with FedNow. They will work the same but with faster transfers. They will be pseudo-banks with internal transfers, FedNow transfers to others, and instant transfers to bank accounts. They will be alternative to bank apps. PayPal's purchase protection could be important for purchases unless banks work something else out.
Zelle is the one that is doomed since they are bank-run instant transfers that FedNow directly replaces.
We have free instant payments in the Eurozone, UK has had them for about a decade and I'd say PayPal is doing fine (unfortunately). So what's the concern?
Not sure anyone gets an API at no cost for those US transfers ... for person-to-person, they will be/are awesome, but for commerce, pretty sure it will not be a free service.
Now how can a company that launched many people’s successful career of meddling in everyone’s affairs be acquired by a company that was launched 10 years later, interesting.
Stripe is a pain in the ass as a buyer, so I really hope they won't be able to acquire competitors and become a de facto monopoly.
For example, when you're traveling abroad and can't buy a service online with your card, you can be 95% sure that Stripe is the payment processor.
Maybe true but I’ve never had a worse experience than I have with PayPal, truly an awful company
Well for an expats, it's really a gamechanger not having to play three card monte selecting the correct card to use for each transaction. You would be surprised how many transactions are (accidentally?) geofenced based on where your card is issued from, and Paypal pretty much solves these.
I'm an Indian with a few US subscriptions and Paypal was indispensable for years. When they set a KYC deadline involving some dude in a video call suddenly asking me to produce my Aadhar (national ID), I then discovered those services work with my debit cards perfectly. BTW autonomous charging of arbitrary amounts is not allowed in India, AFAIK.
Well here in DACH space, it is one of the US providers that works best, then again maybe we should move away from them.
I know everyone here hates PayPal but I don't recall hearing anyone I know IRL complaining about it, for whatever that's worth.
As a buyer PayPal saved me after being scammed. It was a breeze to claim my money back, once I filed a police report.
Stripe and other normal card processors make it impossible. And before someone says to "charge back" with my bank, my card is from a country where that is almost impossible. In fact I think maybe only in the US that's actually practical, because in Germany I don't remember "charge backs" being a thing when i lived there.
Ive had the opposite experience with paypal being completely obnoxious and refusing to halt a fraudulent transaction (ultimately my bank made them).
I think the people who complained about paypal stopped using it.
Back in the day I had a paypal account, as did many friends, solely because it was the only supported payment method on Ebay.
After a few bad experiences I cancelled/closed my paypal account, and I know I'm not alone in that.
These days the sight of a paypal payment form is an immediate tab-close. I've no wish to use them, support them, or go near them ever again.
I'm surprised by how bad and costly Paypal is. After switching to Revolut, happily dumped my PayPal account.
Might work for some countries (like US). But if you are from country with their own currency PayPal will only allow payout to account with that native currency. You get payed in USD you can't payout to USD account if your nation uses different currency. And of course they will also exchange that USD to your currency with their exchange rate that's 5-8% above services like Wise.
Basically you either keep money in your Paypal and use it there or pay their cut. It's simply usury.
It's just a payment processor, one which only appears to be used for eBay.
There's not a lot to complain about.
Stick in your card details, shitty old 1990s computers and synthesizers and car parts arrive at your door. Hard to get it wrong, really.
PayPal hasn’t had any connection with eBay in years.
But it's what eBay uses for its card payment gateway.
I'm not sure what else you'd use Paypal for.
Is it because no one you know IRL uses paypay? It hasn't been relevant in a lot of countries since Ebay was popular in the mid 2000s.
A free/standard current account will do physical/online payments, cash withdrawal, currency conversion, spending abroad ect ect.
Yeah, but PayPal is an even bigger pain.
Similar same happened to me, but in my country. I got a virtual stripe card to pay for the conference I was supposed to attend to and the fixing of problems took like five business days
Stripe is also sending me emails with an unsubscribe button that requires me to authenticate. So they’re a pain as a user as well.
Except in Australia, where it barely had 30% saturation, compared to Square’s 60%?
You clearly didn’t have to use Authorize.net before Stripe came along. It was unspeakably bad.
Not good. Stripe rejects anyone even close to the regulated cannabis space (with no room for appeal) but PayPal will accept these tranctions. So, this would put a non-zero amount of businesses (that don't even touch that deadly, deadly plant) in a tight spot with this monopolisation of the industry.
I don't think anything would change. If Stripe's underlying providers (banks) aren't involved then their requirements would not apply.
Stripe doesn't want to reject anyone, but their banks/underwriters do not have a limitless appetite for risk.
> but their banks/underwriters do not have a limitless appetite for risk.
I'm trying not to be snarky here, but I really can't believe anyone can truly believe this.
They almost blew up the global financial system. About once every two decades. What's the risk of accepting some transactions related to weed? (They can always charge more to offset the risk)
It's not about financial risk, it's simply an attempt to exert control over what people could do with their own money.
MJ is still very illegal federally. Presumably anyone doing business in that industry could be sued or just have the feds come down on them. I don’t think we should expect financial institutions to break the law.
Dildos aren’t illegal federally but you can’t sell those using Stripe either. It is actually about puritans wanting to control what you do.
> Stripe doesn't want to reject anyone,
"Sorry, your Stripe account got closed because of 'crowdfunding' because you dared link it to a Ko-Fi account."
And that's how I lost my Stripe account...
Someone new will arise to fill the market gap if there is demand. Saw it firsthand here with the Marijuana industry in Michigan shifting around payment providers to accept credit card transactions after it was legalized. A lot of hoops had to be jumped through. I think it still has the potential to be bad, but it does give opportunities.
If you had any pointers I'd be grateful
Stripe and PayPal have pretty different sets of tradeoffs. There's plenty of reasons to dislike both, but at least right now you get a choice between them. I really hope they won't merge.
> Stripe hit a $159 billion valuation on Tuesday and said it was on track to reach an annual run rate of $1 billion this year.
Wow! This is the quality of reporting from CNBC? The $1B ARR number is just for Stripe's Revenue products (Billing, Invoicing, etc). That doesn't include their main business (payments-related products).
Wouldn’t ARR specifically mean subscription type products like you list? Payment processing isn’t annually recurring as I understand it.
In this case they reported Stripe's annual run rate — a metric that's roughly comparable to annual recurring revenue, but for non-recurring business models.
Maybe if you're being pedantic but let's assume they generate $1B to $3B in payments revenue on top of that non payments ARR. I don't see why you'd assume the former isn't likely to grow and so you might as well think of it as recurring. It's just low margin.
Still a rich multiple at 40-70x
That would mean they would be acquiring Venmo as well?
I feel like PayPal is slowly degrading, I hope Stripe would find a way to modernize it.
It's hard to turn a sinking product around. There's a cultural problem, and those are very difficult to solve.
There's a Munger quote that I don't quite remember, but it went something like this: "When good managers are put into a terrible culture, it's the culture that wins."
When a manager with a reputation for brilliance takes on a business with a reputation for poor economics it’s the reputation of the business that remains intact
When Seagate (then a reputable hard drive manufacturer) purchased Maxtor (then the bottom-of-the-barrel for both price and reliability) I hoped Seagate would rehabilitate their newly acquired facilities and bring them up to the same quality.
I was disappointed.
I used to live in the United States and recently moved to Germany. Using PayPal for payments is a lot more common here than Germany. In fact I connected my Uber account to my credit card via PayPal and my partner pays for a lot of things online via PayPal.
PayPal is also used for transferring money between friends and family quite frequently
Yeah! Germany is big in the PayPal game; especially since they introduced delayed payment. There's an new alternative: https://wero-wallet.eu/
I think the reasoning was to be less dependent on the US. I hope to see it exceed – more competition is great.
I have been trying to help someone in Guatemala receive payments from international tourists and PayPal seems to be the best option we've found, even though I don't like using it (horror stories about money being stranded in locked account, etc).
Dutch people always complain that in Germany they can't use their phones to pay. It really does feel like going back to 1995 sometimes.
> Dutch people always complain that in Germany they can't use their phones to pay.
I pay p much everywhere with my phone using the Sparkasse apps NFC payment. Maybe it's a north/south divide (assuming the dutch are mostly visiting the north, as I am in the south).
Stripe's valuation decreased from $95 billion in 2021 to around $50 billion in 2023.
I am curious what changed in 2 years to reach $159 valuation and assuming deal goes through, how they fund PayPal buyout.
What does this mean for existing users, and the features of PayPal? Which is sending money between family & friends and withdrawing money to my bank account for free.
That feels like it would be a pretty significant blunder for stripe. Paypal is everything that stripe isn't. Legacy, confusing, slow, expensive and hidebound.
When a company with good tech buys out a company with crap tech, they're not paying for crap tech — they're paying for the user base.
I would wager that Stripe has already put together a consumer-cash platform, and is weighing whether to deploy it as "Stripe Cash" or "Paypal 2.0". The former strategy would require a slow rollout that would compete with Paypal, Apple Cash, whatever Google and Samsung’s offerings are called… The latter branding would make them the dominant player overnight.
Sometimes. Sometimes you get the Boeing buying McDonell Douglas
And Cash App
On the other hand, they are getting rid of a competitor.
They're going to become PayPal. There's no scenario where that doesn't happen as they get larger and larger and larger. Especially as competition is eliminated.
On the consumer facing side Paypal is something I use when paying, but AFAIK I can't use Stripe (yet?). Stripe is used by businesses to let me pay with a credit card (or Paypal, Google Pay, etc etc).
Stripe link is a white label checkout page like what you're talking about. I believed all of shop pay also goes through stripe
Stripe Link is their answer to “using Stripe on the customer facing side”.
I hesitate to post this here but I'm not sure Stripe hasn't become most of those things as well now. It's obviously been very successful and I'm happy for the people who built such a useful service in the early years. But I also mourn the loss of the tidy product, transparent pricing, clear documentation, and legendary support that made it exceptional back then.
Will anyone be getting arrested for insider trading? It spiked on rumors yesterday when nearly everything else was collapsing.
$PYPL at $40 was/is free money. Nothing stopping you from getting on the train. 8 PE is insane for a company with brand recognition and market penetration.
I fully agree with your assessment of the company and its valuation. It's the publication of the rumor and accompanying 10% pop in stock price that's suspicious.
Haven't you heard? Crime is legal
HIS crime is legal. Yours is still illegal unless you pay tribute, e.g. binance.
Also anti-trust, monopolies and insider trading are all legal.
The SEC won't do anything.
When’s the last time a private company acquired a public company? Crazy!
Not all that different from Musk buying Twitter. Happens pretty often with private equity as a buyer.
Mostly private equity companies do this.
Bending Spoons bought Vimeo.
Hellman & Friedman bought Zendesk.
Stripe is overvalued by about 10x judging by Block and PayPal.
Best case scenario: Stripe gets larger, gets bloated, slower, eats some competitors, becomes their competitors. The street presses down on their valuation as their growth races toward single digits. Congratulations.
Block is fetching ~13 times op income. PayPal is fetching ~7 times op income.
Not sure about Block and Paypal, but AFAIK a good portion of transactions on Stripe are made as part of recurring subscriptions or similar. Those can't be migrated to other services easily, so for the time being Stripe will likely continue profiting from them and from the growth of whatever businesses use it for such subscriptions.
And it’s still private. So no proper price finding has occurred yet.
People always want the upstart hotness. Look at the shiny growth (which is meaningless if they're just going to end as a slow growth obese giant anyway, it's all rinse & repeat).
Maybe Stripe sees the end writing on the wall and they're going for it while the bubbly action is there.
cool, more market consolidation
You have it backwards, great opportunity to start a niche competitor for whatever feature they'll remove once the acquisition is done!
Creating a payment processor is extremely complex and expensive. It's not easy to start a niche competitor.
Yea it's not easy to build a Stripe competitor although we need some.
Paypal Honey, anyone?
Coinbase next?
Related:
Stripe valued at $159B, 2025 annual letter
https://news.ycombinator.com/item?id=47137711
> PayPal’s stock has plummeted over the last year as it faces slowing growth and mounting competition in the digital-payments market.
What is the mounting competition? Does Paze factor into any of this?
Do you know anyone using Paze?
I don't know of Paze.
FedNow is what has PayPal's former investors so terrified (so much so that investors don't even think PayPal warrants a double digit multiple).
No cost instant financial transfers between US financial users is coming over the next decade. The Fed has 1,400 banks onboard so far, up from 900 the prior year (that's 1,400 in two years). Half of PayPal's business goes away over the coming decade.
I think PayPal and Venmo will be just fine with FedNow. They will work the same but with faster transfers. They will be pseudo-banks with internal transfers, FedNow transfers to others, and instant transfers to bank accounts. They will be alternative to bank apps. PayPal's purchase protection could be important for purchases unless banks work something else out.
Zelle is the one that is doomed since they are bank-run instant transfers that FedNow directly replaces.
We have free instant payments in the Eurozone, UK has had them for about a decade and I'd say PayPal is doing fine (unfortunately). So what's the concern?
Not sure anyone gets an API at no cost for those US transfers ... for person-to-person, they will be/are awesome, but for commerce, pretty sure it will not be a free service.
Now how can a company that launched many people’s successful career of meddling in everyone’s affairs be acquired by a company that was launched 10 years later, interesting.