5 ms·

Mobile-Payment Startups No Match for PayPal

23 points by rmah 13y ago

thinkcomp 13y ago
This is a pretty misleading story. It doesn't address the regulatory issues in the market whatsoever. Olga Kharif also reported in 2011 that the iPhone 5 would have NFC. See http://www.bloomberg.com/news/2011-01-25/apple-plans-service-that-lets-iphone-users-pay-with-handsets.html http://www.bloomberg.com/news/2011-01-25/apple-plans-service.... (It doesn't.) PayPal's general counsel testified at the DFI (now DBO) oversight hearing in Sacramento in March, 2013, which was initially scheduled for November, 2012 to take place not at the state capitol, but at PayPal's San Jose headquarters. Clearly the regulations matter to them.
- jusben1369 13y ago
  I'm not sure I understand what you mean? The story is essentially one of an overcrowded marketplace with too many startups going after too small an amount of business and the disaster that looms.
mattmaroon 13y ago
Anecodote: We've switched to Stripe and Paypal (from Paypal's merchant solution only) and are happy to have pushed about 50% of our processing away from them. But we probably won't get much past that. As much as the developer experience sucks, a lot of customers love using it, especially internationally.
- samspenc 13y ago
  Can you explain what you mean by "Stripe and Paypal"?
  - jeffasinger 13y ago
    Many sites use one processor for payments from countries like the US, Canada and the UK, and also paypal for payments from elsewhere, and for any customers that prefer Paypal (i.e. trust it more, or already have CC info saved there).
  - jusben1369 13y ago
    They stopped using PayPal as a Payment gateway for credit cards and PayPal and switched that out for Stripe. They still accept PayPal as a payment type (via PayPal as Stripe doesn't support PayPal as a payment type)
    - mattmaroon 13y ago
      Correct. Mostly because we had a very low amount of charge backs (something like a fraction of a percent of what we process in a year, which for our industry is phenomenal) and PayPal instituted a hold on some of our funds. Stripe is easier to implement, but at our scale that's not really a huge factor. The dev time for any payment system isn't a significant limitation.
- GFischer 13y ago
  At least here in Uruguay, it's not that we "love it", it's the only option. Paypal recently added local credit cards here in Uruguay. No company is even remotely close. So, if you want to accept payments from countries such as mine, Paypal it is. Many companies consider it acceptable to miss on the marginal revenue from small countries, so I won't complain about Paypal on that front :) .
- jusben1369 13y ago
  Just to be clear, this article is focused on POS vs online payments (where Stripe lives)
- cstejerean 13y ago
  As a customer I prefer using PayPal for one off purchases because all my information is already saved there. I also prefer to avoid sharing my credit card details with new or small businesses (basically anyone that can't afford a full-time security person + quarterly external audits). I know that several solutions allow sites to avoid touching credit card numbers altogether, but I generally don't want to have to figure that out during checkout.
qq66 13y ago
Part of the problem here is that VCs have funded 100 competitors instead of 5. In a commodity business, you only get profitability at huge scale, and a lot of problems like internationalization and fraud prevention to boost revenues and margins take a lot of investment. And the companies that succeed with gimmicks to get a bunch of early traction with an unprofitable 1% or 0% business model aren't necessarily the ones that will be good at solving the thornier problems down the road. 5 VC-funded companies with $60m each would be better equipped to take on PayPal than 100 companies with $3m each.
joonix 13y ago
If it's a commodity business then take your capital out and trade pork bellies from home instead. Regardless I'm quite pleased with Stripe and I'm not a developer. I just use it with a mobile app.

23 points by rmah 13y ago

This is a pretty misleading story. It doesn't address the regulatory issues in the market whatsoever. Olga Kharif also reported in 2011 that the iPhone 5 would have NFC. See http://www.bloomberg.com/news/2011-01-25/apple-plans-service-that-lets-iphone-users-pay-with-handsets.html http://www.bloomberg.com/news/2011-01-25/apple-plans-service.... (It doesn't.) PayPal's general counsel testified at the DFI (now DBO) oversight hearing in Sacramento in March, 2013, which was initially scheduled for November, 2012 to take place not at the state capitol, but at PayPal's San Jose headquarters. Clearly the regulations matter to them.

jusben1369 13y ago
I'm not sure I understand what you mean? The story is essentially one of an overcrowded marketplace with too many startups going after too small an amount of business and the disaster that looms.

mattmaroon 13y ago

Anecodote: We've switched to Stripe and Paypal (from Paypal's merchant solution only) and are happy to have pushed about 50% of our processing away from them. But we probably won't get much past that. As much as the developer experience sucks, a lot of customers love using it, especially internationally.

samspenc 13y ago
Can you explain what you mean by "Stripe and Paypal"?
- jeffasinger 13y ago
  Many sites use one processor for payments from countries like the US, Canada and the UK, and also paypal for payments from elsewhere, and for any customers that prefer Paypal (i.e. trust it more, or already have CC info saved there).
- jusben1369 13y ago
  They stopped using PayPal as a Payment gateway for credit cards and PayPal and switched that out for Stripe. They still accept PayPal as a payment type (via PayPal as Stripe doesn't support PayPal as a payment type)
  - mattmaroon 13y ago
    Correct. Mostly because we had a very low amount of charge backs (something like a fraction of a percent of what we process in a year, which for our industry is phenomenal) and PayPal instituted a hold on some of our funds. Stripe is easier to implement, but at our scale that's not really a huge factor. The dev time for any payment system isn't a significant limitation.
GFischer 13y ago
At least here in Uruguay, it's not that we "love it", it's the only option. Paypal recently added local credit cards here in Uruguay. No company is even remotely close. So, if you want to accept payments from countries such as mine, Paypal it is. Many companies consider it acceptable to miss on the marginal revenue from small countries, so I won't complain about Paypal on that front :) .
jusben1369 13y ago
Just to be clear, this article is focused on POS vs online payments (where Stripe lives)
cstejerean 13y ago
As a customer I prefer using PayPal for one off purchases because all my information is already saved there. I also prefer to avoid sharing my credit card details with new or small businesses (basically anyone that can't afford a full-time security person + quarterly external audits). I know that several solutions allow sites to avoid touching credit card numbers altogether, but I generally don't want to have to figure that out during checkout.

qq66 13y ago

Part of the problem here is that VCs have funded 100 competitors instead of 5. In a commodity business, you only get profitability at huge scale, and a lot of problems like internationalization and fraud prevention to boost revenues and margins take a lot of investment. And the companies that succeed with gimmicks to get a bunch of early traction with an unprofitable 1% or 0% business model aren't necessarily the ones that will be good at solving the thornier problems down the road. 5 VC-funded companies with $60m each would be better equipped to take on PayPal than 100 companies with $3m each.

joonix 13y ago

If it's a commodity business then take your capital out and trade pork bellies from home instead. Regardless I'm quite pleased with Stripe and I'm not a developer. I just use it with a mobile app.