No we don’t, and I’m working on solving this problem. There’s no reason for a pure SaaS company to pay these middlemen if the only thing they buy and sell is software. Software vendors can settle accounts directly like banks do, we just need something like an ACH for SaaS. And I’ve been thinking a lot about how to do this while having the equivalent of a petrodollar to create underlying value based on a commodity. For example a meta currency for compute credits that is cloud agnostic.
Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
21–30 of 377 posts
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#22Depends on whether you want to use their services? If you live somewhere where it's easy to just instantly transfer funds form one bank to another for free (e.g. you live in the Netherlands), then no: none of those companies need to exist in your world.
If you live anywhere else, all these companies are offering services that banks don't, or charge much more for. Or these days, don't even offer themselves, they literally outsource it (e.g. sending money from one bank to another is now a built-in-third-party-service in the form of agreements with Interac to handle low value EFTs).
So can you rival them? Probably. Will you fail? More likely than not. Is there lack of real competition? Depends on where you live, but yeah the whole reason they got this big is because they found a real problem and solved it, charging just enough for people to go "well that's still worth it for me".
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#23Not at all. There are other solutions around the world that bypass the payment gateways and credit card acquirers. In Holland they have iDEAL, in Thailand they have QR Codes, in Australia they have BPAY and in China they have WeChat Pay. There are tons more around the world. As a merchant, it can be very expensive integrating directly with all the different options, which is where these companies help - for a fee. If…
Do those services also deal with fraud, chargebacks, etc., or are they basically digital cash equivalents?
There are countless systems and they all answer that question differently.
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#24Replace "billions" with 3%
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#25Central Bank Digital Currency takes away some (but not all) of the purpose for credit cards and other digital payment services. https://www.federalreserve.gov/central-bank-digital-currency...
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#26look up Red ocean vs blue ocean.
Even if it was, there are better uses for a "decade with enough funding" unless you have some competitive advantage, like you're the CEO of Chase Bank or something. If you want to know how possible it is, consider that Bitcoin was released in 2009 and cryptocurrency's success at being used for payments - in the history of the world - it has been used for payments between people for something other than crimes, but adoption is way behind visa. Like, that alternative system exists (albeit not for free either) and there's no adoption. So the "billions" aren't exactly a market inefficiency. They make billions, but out of your life, how much do you pay to them. And then, do they perform a valuable service and charge money for that? Would you rather go to a bank and get cash and drive it to Amazon's local office, or mail them a cheque? For a fee, there are companies out there that will make it easier and faster and more convenient than that.
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#27I'm not ashamed to say I could never justify those kind of things even before they cost billions ;)
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#28Platforms are where the money is at. Big SaaS companies built something large and complicated (their moat) that's difficult for a competitor to replicate or support.
It takes thousands of people who know what they are doing to get a big SaaS platform in any industry to work -- and to keep it working through endless regulatory changes, hacks, user demands, tech limitations, and bugs.
Once you have built something of this scale you're likely to charge as much as competition or perhaps even more -- not only to recoup your enormous costs but to return the expected profits to your capital backers.
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#29[dead]
Because a currency that fluctuates in value +/- 20% every week is exactly what people want in a payments system.
Plus the exchange fees for Bitcoin is way higher than what regular payments processors charge.
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#30I was wondering this myself. If we are paying fees why is it necessary to pay a % of each sale instead of paying a standard subscription? Sure it means more money for them, but is this really necessary?