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> Stripe doesn't gain anything or do anything with this buffer. We don't earn interest. I find that hard to believe. Otherwise Stripe is leaving money on the t

• stu2b50 6y ago
  I mean given that it's a buffer it can't exactly be held as an illiquid asset. How much interest can you realistically get on this, and is it worth the risk if a bunch start going under and you need the liquidity now rather than later?
  • graton 6y ago
    You can put the float into a money market fund. It is liquid and can earn maybe 1% interest. Which doesn't sound like a lot, but it is free money. And if you have millions of dollar in the reserves over a course of a year it can add up. $10 million at 1% is $100,000 in interest. I imagine they would have more than $10 million in reserves.
    • wolco 6y ago
      It would cost more for one new employee to run it than the savings.
• drunkpotato 6y ago
  Stripe could earn money on the float, which would be a tiny interest but create a perverse negative incentive for them to keep a higher reserve. So there's a pro and a con. Edwin stated they don't earn interest on the float, which is a reasonable stance for the business to take on both an incentive and customer service basis, and may be a more profitable position for the company.