
Stripe CEO Patrick Collison on the Limitless Potential of Payments - prostoalex
http://www.forbes.com/sites/roberthof/2015/08/18/in-conversation-stripe-ceo-patrick-collison-on-the-limitless-potential-of-payments/
======
EugeneOZ
List of countries is very, very limited still, so don't lie to yourself,
Patrick.

------
aianus
Stripe and the payment card industry in general are a bunch of parasites.
Debiting one account and crediting another in a database is not a value on the
order of 2% of the economy.

Good luck competing with the blockchain in five years.

~~~
dogma1138
If you understood how banking works you would be surprised, the reason why
banks drool over potential technologies like BitCoin is because it can remove
most if not all of the risk from those transactions as well as the need to
have (the right, and this is very important for concurrent banking ;)) the
funds to cover the transaction.

Everytime you process a payment with a credit card, PayPal or what ever they
are paying for your transaction which means that not only that they need to be
able to cover any potential risk on that debt but also actually have the funds
available.

I don't know about Stripe but PayPal works because they offload the fraud and
funds availability off the credit card companies that requires quite big
financial investment if Stripe works the same (and for the most part it does)
the 2% fee isn't that outrageous considering the amount of cash flow they have
to maintain.

~~~
alooPotato
Its clear the credit card companies have real costs: fraud, credit risk &
customer rewards. But does anyone know what those costs are relative to their
2% fee?

Clearly with a bitcoin solution, consumers will demand fraud protection and
rewards and perhaps fraud will be less of an issue. But will the bitcoin
companies still have to charge roughly 2% or will there be a race to the
bottom on those fees?

~~~
dogma1138
Well currently banks and clearinghouses are looking into BitCoin like
technologies to settle their own debt (consolidation).

With the most basic type of banking systems each bank will have an account
with another bank to facilitate the transaction which means they'll debit your
account and credit the account of the bank to which the account that you want
to transfer too and that bank will do the same thing in reverse.

Since banks can't open corresponding accounts with each other bank in the
world or even in the same country (if it's places like the US where everyone
can set up a bank) they go through the central bank (or the fed in the case of
the US) and more recently through clearing houses which can speed and and
simplify certain transactions.

This method requires them to have quite a bit of free funds and to ontake
quite a bit of debt and banks don't like owning money to some one especially
not to another bank. BitCoin seem to be able to solve it since they can do
internal clearing and consolidation on top of the blockchain without having to
accumulate debt.

How much of it will translate to the end user's transactions probably not much
at first, the blockchain might also have other issues that cannot be currently
foreseen or understood that could incur hidden costs, but with how the current
BitCoin blockchain works it will not be financially viable for small
transactions as it will pollute the blockchain with very low value
transactions and delay the big and important ones so you'll either have
multiple chains or you'll have again some sort of system that will accumulate
debt which will be settled later in one large transaction which means that you
again take on similar risks to current credit card transactions which do not
guarantee that the funds are available.

As for the costs well you are looking at enormous setup costs, very high
operational costs due to needing to manage risk, maintain a very liquid cash
flow, insurance, regulation etc, VISA Inc made 12B dollars last year and
30-40% of their income these days come from "Data Processing" and not from
fees, if that's too much, too little well you decide :P

