With my user hat on, having fed my family out of a Paypal account for a few years, I think the degree of hatred they hit in e.g. HN threads is not coextensive with the feelings of people using them. There are extremely formidable moats in the business; nobody crossed them.
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Replying to @patio11 @matthew_d_green
Payments is a hard technical problem, but that's not why it's a hard business to be in
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Replying to @matthew_d_green @kevinriggle
A brief sampling: fraud ^ 100, need for operational excellence due to low margins, hundreds of jurisdictions you need to be compliant in across multiple regulatory regimes, extremely toothy partnership considerations, two-sided marketplace and particularly consumer adoption, etc.
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Partnership considerations: you probably don't want to replace the entire financial ecosystem with one go, so you will need someone inside the circle of trust to vouch for you, and now their problems become your problems. You have to make this work for both sides.
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That turns out to be an oversimplification because you won't have just one partner relationship. Figure on ~5 early and ~hundreds at Paypal scale. You'd be surprised how few geeks are fluent in "Japanese banker."
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Replying to @patio11 @kevinriggle
How much does it help the banking industry to make sure there *aren’t* a lot of dynamic SV competitors pushing into their business area?
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Replying to @matthew_d_green @kevinriggle
There is more nuance in the relationship between tech and finance than is often appreciated by e.g. cryptocurrency enthusiasts. Startups in payments/etc are not uniformly *competitors* to banks. They're also potentially-materially-sized customers/channels/etc for incumbents.
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Replying to @patio11 @kevinriggle
I have no doubt there is. But I’m just an outsider marveling at the literal oceans of cash that were there to be made by potential competitors, but were not made because those competitors did not or possibly could not exist. And I’m asking the question: why didn’t they.
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Replying to @matthew_d_green @kevinriggle
If I can politely push back a smidgeon: the thing that makes Paypal all of the money (consumer to business payments) is something for which there does (and did) exist substantial mature competition. That's one reason why there was less innovation than one might have expected.
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Like, if you're Delta in 2005, when you think of hard engineering problems, taking credit card payments online was probably not near the top of your list. It looked solved. Narrator: It wasn't solved.
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Replying to @patio11 @kevinriggle
If CC payments was mature — then explain why Stripe offered consumer to business payments, a service that should have been extremely mature in 2009, and almost instantly became a billion dollar company.
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Or if it wasn’t mature, I’m not understanding why not.
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