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The profit margin per "Revenue" dollar is so small for a payment processor it always seemed like a strange metric to value a payments company on for me, as they
by mustardo 5y ago
The profit margin per "Revenue" dollar is so small for a payment processor it always seemed like a strange metric to value a payments company on for me, as they are essentially just a middle man for this "Revenue" taking it from the customer and giving it to the merchant. Afterpay does typically have higher merchant fees than a regular CC gateway tho
- riatin 5y agoAfterpay aren't really a payments processor in the typical sense though, their business model is nothing short of genius tbh. They've set up a non-traditional 2-sided market connecting consumers + merchants, allow consumers to pay the MERCHANTS back over 4 installments and collect a 5% fee on the way through as well as any late fees (remember they're not taking on the risk here either)
- ec109685 5y agoThis feels similar to the United States credit card market where there’s a 3% fee paid for by the merchant and thus a lot of opportunities to “reward” customers, and an incentive to keep things status quo.
- sjy 5y agoAfterpay bears the credit risk, not the merchants. Search for the keyword "net transaction loss": https://afterpay-corporate.yourcreative.com.au/wp-content/uploads/2021/03/Afterpay-Limited-Half-Yearly-Report-HY21.pdf https://afterpay-corporate.yourcreative.com.au/wp-content/up...
- Decker87 5y agoThey take like 5% of the money. That's pretty dang significant.