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> Winning Competitions > In the presentation, Stripe said it generated $14.3 billion in revenue as it processed $816 billion in payments volume last year. The c

> Winning Competitions > In the presentation, Stripe said it generated $14.3 billion in revenue as it processed $816 billion in payments volume last year. The company’s so-called transaction margin before losses — a measure of net revenue — rose to $3.17 billion, or 0.38% of total volume. That compares with 17 basis points for rival Adyen NV, according to the presentation. Does anyone else feel these numbers aren't as high as expected? Sure $14B in annual revenue (and margins of ~$3b on that revenue) is nothing to scoff at. But $14B isn't even close to Amazon/Azure cloud big or even Amazon Ads big. Perhaps Stripe's valuation assumes a steep uptick in this revenue in the years to come?

umeshunni 4y ago
FWIW, Paypal's revenues are $25.37B/year and it has a market cap of $86B
- ztratar 4y ago
  And those are measured in the same way Stripe measures the $14B number. Granted, PayPal has a higher take rate than both Adyen and Stripe. But also much lower growth.
martinald 4y ago
I'm unsure how stripe is only making 0.38% on transactions, given at least in the UK they are vastly more expensive than other providers on their public pricing. For example; stripe charges 1.5%+20p for UK cards. Revolut charges 1%+20p for online transactions, 0.8%+2p for in person. I'm sure other providers charge even less than this but they don't make the pricing public easily. Ayden is perceived to be a lot cheaper than stripe too, so I am surprised they are only getting 20bps more. What am I missing here? Are margins a lot tighter in the US market, and stripe is extremely US focussed (one possibility?), or are Stripe giving really heavy discounts for volume which really drags down their marigns?
cornholio 4y ago
The main problem with investing in Stripe is they are one meeting away from being disrupted into oblivion. This would be the meeting where the likes of Revolut, Transferwise, PayPal, Monzo etc. meet with the high-street bankers and with the eCommerce industry and agree to cutout the middle man and rollout a modern online payment system for the 21st century, cheap and architected to resist fraud. Many European countries already have local systems. Luckily for Stripe, MC, Visa etc. those three groups hate each other, but the probably of this meeting happening in the long run tends towards certainty.

umeshunni 4y ago

FWIW, Paypal's revenues are $25.37B/year and it has a market cap of $86B

ztratar 4y ago
And those are measured in the same way Stripe measures the $14B number. Granted, PayPal has a higher take rate than both Adyen and Stripe. But also much lower growth.

martinald 4y ago

I'm unsure how stripe is only making 0.38% on transactions, given at least in the UK they are vastly more expensive than other providers on their public pricing. For example; stripe charges 1.5%+20p for UK cards. Revolut charges 1%+20p for online transactions, 0.8%+2p for in person. I'm sure other providers charge even less than this but they don't make the pricing public easily. Ayden is perceived to be a lot cheaper than stripe too, so I am surprised they are only getting 20bps more. What am I missing here? Are margins a lot tighter in the US market, and stripe is extremely US focussed (one possibility?), or are Stripe giving really heavy discounts for volume which really drags down their marigns?

cornholio 4y ago

The main problem with investing in Stripe is they are one meeting away from being disrupted into oblivion. This would be the meeting where the likes of Revolut, Transferwise, PayPal, Monzo etc. meet with the high-street bankers and with the eCommerce industry and agree to cutout the middle man and rollout a modern online payment system for the 21st century, cheap and architected to resist fraud. Many European countries already have local systems. Luckily for Stripe, MC, Visa etc. those three groups hate each other, but the probably of this meeting happening in the long run tends towards certainty.