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Buying an operation like Discover doesn't seem radical enough. IMHO they need to do something like buy Flexa (https://flexa.network/ https://flexa.network/) and

by ahnick 3y ago

Buying an operation like Discover doesn't seem radical enough. IMHO they need to do something like buy Flexa (https://flexa.network/ https://flexa.network/) and do a complete end run around the entire TradFi payment space. If they do that, then the margins will be much better and they will be well positioned for the future. Although Apple has so much money, they could take both approaches at the same time.

lxgr 3y ago
If building a new global payments network from scratch was that easy, why would Apple buy an obscure, tiny player rather than just building their own network from scratch? The value of an incumbent payment network isn't the technology or the revenue it generates; it's the network itself (in this case, in the form of merchant acceptance).
- ahnick 3y ago
  Right, Flexa is already integrated in a number of PoS (Point-of-Sale) devices and providers (e.g. NCR), which makes its merchant acceptance fairly broad already. Once stablecoin legislation occurs, then being able to accept something like USDC will be more valuable for merchants and since there are no chargebacks to worry about then the merchant fees will be substantially reduced. Something like 1% vs 4-5%.
  - lxgr 3y ago
    > Once stablecoin legislation occurs You’re saying this as if it’s a “when”, not an “if”. > no chargebacks to worry about Chargebacks aren’t something to worry about for customers – they are the reason they feel comfortable giving new merchants a try!
    - ahnick 3y ago
      > You’re saying this as if it’s a “when”, not an “if”. Yes, the fact that Blackrock has now applied for a spot Bitcoin ETF makes it much more "when" than "if". > Chargebacks aren’t something to worry about for customers – they are the reason they feel comfortable giving new merchants a try! Correct, but merchants care a lot about how much they fork over to Visa/Mastercard for every purchase. Most people won't care about not paying through a credit card for small retail purchases. (e.g. People know if Starbucks got their order right and can have it fixed right there on the spot) People dealt in cash long before credit cards ever existed. The scenarios where you really care about the chargeback protection do not make up a majority of purchases and can be addressed through other mechanisms. IMHO, credit cards will still exist in the future, just in a greatly reduced capacity.

by ahnick 3y ago

lxgr 3y ago

If building a new global payments network from scratch was that easy, why would Apple buy an obscure, tiny player rather than just building their own network from scratch? The value of an incumbent payment network isn't the technology or the revenue it generates; it's the network itself (in this case, in the form of merchant acceptance).

ahnick 3y ago
Right, Flexa is already integrated in a number of PoS (Point-of-Sale) devices and providers (e.g. NCR), which makes its merchant acceptance fairly broad already. Once stablecoin legislation occurs, then being able to accept something like USDC will be more valuable for merchants and since there are no chargebacks to worry about then the merchant fees will be substantially reduced. Something like 1% vs 4-5%.
- lxgr 3y ago
  > Once stablecoin legislation occurs You’re saying this as if it’s a “when”, not an “if”. > no chargebacks to worry about Chargebacks aren’t something to worry about for customers – they are the reason they feel comfortable giving new merchants a try!
  - ahnick 3y ago
    > You’re saying this as if it’s a “when”, not an “if”. Yes, the fact that Blackrock has now applied for a spot Bitcoin ETF makes it much more "when" than "if". > Chargebacks aren’t something to worry about for customers – they are the reason they feel comfortable giving new merchants a try! Correct, but merchants care a lot about how much they fork over to Visa/Mastercard for every purchase. Most people won't care about not paying through a credit card for small retail purchases. (e.g. People know if Starbucks got their order right and can have it fixed right there on the spot) People dealt in cash long before credit cards ever existed. The scenarios where you really care about the chargeback protection do not make up a majority of purchases and can be addressed through other mechanisms. IMHO, credit cards will still exist in the future, just in a greatly reduced capacity.