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I would have thought the opposite. Margins tend to be high in financial services, revenue tends to be tiny. The value of payments / GTV is huge, but the taxable
by ian0 7y ago
I would have thought the opposite. Margins tend to be high in financial services, revenue tends to be tiny. The value of payments / GTV is huge, but the taxable component is the fees themselves?
- vertoc 7y agoYeah but Stripe doesn’t get to keep most of those fees - it’s mostly interchange which goes to Visa which is then distributed to the issuing bank of the credit card
- ian0 7y agoYeah but you don't book other peoples fees as your own revenue. VISA has a profit margin of 54%. Surely they are not counting the entire interchange cost (of which they receive a v. small percentage) as revenue.
- scarejunba 7y agoAFAIK they count the entire processing fee as revenue. It sort of makes sense. If I were to make a service on top of Twilio and charge you 1% more than Twilio, then I have to count the whole amount you're paying me as revenue and the whole amount I'm paying Twilio as a cost. That's just as logical as if I were to build a value-added service on top of AWS, or if I bought things on Alibaba and then sold them in America.