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Capital One to acquire Brex for $5.15B

reuters.com

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Re: Capital One to acquire Brex for $5.15B

#341

Post by vel0city »

reaperducer wrote: post #111
xp84 wrote: post #90

Earlier quoted context omitted.

(Frame of reference: US only) That's a shame, given 18-25 is just the age where a credit card skimmer or online card fraud causing a big fraudulent withdrawal from your checking account, and weeks of waiting to get it back, could be devastating. This has happened to people in my family (likely from gas stations) but we only use credit cards except to pull cash from ATMs, so we only suffer a temporary dip in our avail…

fraudulent withdrawal from your checking account, and weeks of waiting to get it back I've had this happen to me twice in about 25 years. Neither bank made me wait weeks. The most recent one (with a giant megabank) issued a provisional credit in under an hour. There seem to be a lot of people in this thread who have never actually been through this and are just apeing what other people say online. U.S. banks largely…

I had a friend who had their checking wiped out by debit card fraud. Their bank issued them a provisional credit of $150. So nice. Too bad rent was due in two days and was considerably more than $150.

Slowly over the next three months the charges were slowly reversed. In the end the bank didn't reverse all of them, but my friend did get most of her money back.

Re: Capital One to acquire Brex for $5.15B

#342

Post by xp84 »

vel0city wrote: post #290
pants2 wrote: post #110

Earlier quoted context omitted.

Not a great solution to constantly have to top up your checking account with some amount between "I need this much to pay my bills" and "losing this amount would devastating" which for many people has quite some overlap

If most of your income comes from salary/wages, just have the paycheck first hit your normal checking account first and then have scheduled deposits from there into savings accounts someplace else. You generally have enough money in the account to cover your monthly stuff plus a bit of buffer, but have the pile of cash elsewhere in case something happens. This way you're not actively having to top off your normal spe…

Highly recommend this approach. My personal approach has been, for almost 20 years, to have one checking account as Schwab, and the other at a credit union. Schwab has superior offerings for most things, refunds all ATM fees worldwide, and is easy to get on the phone if I have any issue, and the credit union can handle those once-in-5-years (for me) kind of in-person situations like getting a cashier's check, or if I wanted $500 in $100 bills for a gift, etc.

Re: Capital One to acquire Brex for $5.15B

#343

Post by margalabargala »

swyx wrote: post #293
blindriver wrote: post #21

Earlier quoted context omitted.

No. The last two investment tranches will get back their money, based on 1X liquidation preference. Employees who joined in the last 5 years if they got options are fucked. If they have RSUs then they will take a fraction of their equity. It sounds like investors got out okay, but employees got fucked big time. It's a terrible exit and Brex waited too long until their growth stalled.

sorry how did employees get fucked? theres more money after the 1.7B.

Yes, and it goes to the same people that the first 1.7B goes to.

The order of operations is not "everyone breaks even, then we start distributing profit".

The order of operations is "people with preferred stock (i.e. investors) get all their profit, and then employees get whatever's left over".

The fact that the amount of investment money put in is less than the sale price is meaningless. If you are an employee with options at a strike price of $5, and the common stock price is now $2, you're screwed.

Re: Capital One to acquire Brex for $5.15B

#344

Post by xp84 »

hvb2 wrote: post #323
silisili wrote: post #283

Earlier quoted context omitted.

That's a fair argument, and if all companies decided to pass the costs directly on to the user at checkout time, the conversation/advice would probably be a lot different. For whatever reason most do not, so it's advantageous to use the one with better legal protections. It's not only about purchase protection/disputes, but liability and timelines when/if someone steals your card info and makes a bunch of fraudulent…

But most debit cards cannot be used with just the numbers. So I can give you my debit card and you can't do anything with it. You typically need a PIN for any decent purchase. Sure you can tap to pay but that wouldn't be a lot of money fast as it asks for a PIN above a certain amount. That problem of copying the card data is only because it's a credit card and that's all you need to make a purchase. As to skimming, i…

Maybe the terminals don't use the strip, but the cards still have them, so they can still be skimmed, and at least used online, as well as in other parts of the world that do have the magnetic readers.

I think it's possible to write the number to the strip of your cloned card with the bits set to say this is NOT a chip card, so that a terminal won't say "Use chip" -- but clearly the issuer could have the opportunity to notice it odd that the transaction is using the stripe and hopefully subject it to harsher fraud heuristics.

Re: Capital One to acquire Brex for $5.15B

#345

Post by xp84 »

hvb2 wrote: post #229
silisili wrote: post #210

Earlier quoted context omitted.

Of course it's a US view. It's a US site and the OP even prefaced it as such. Does every reply need to do the same? Retailers(in the US) typically eat the cost. Some industries(in the US), like gun shops, are up front about charging more for credit card payments. Most companies(in the US) just see it as cost of doing business. Points have next to nothing to do with why you should always use credit cards(in the US). T…

> Retailers(in the US) typically eat the cost This is what I really have a problem with. It feels so incomprehensible to me that, assuming you're an adult, you can think this. It's just a cost, if that cost didn't exist then either the price would be lower or the margin would be higher. In the end you're paying for it. You're the one exchanging money for a good/service. This is proven by your other comment about how…

You're confusing costs with pricing. Retailers set the price they show customers to what the market will bear and not a penny less, regardless of their costs. Sometimes they make money. Sometimes they even lose money on an item for strategic reasons. It's only competition that forces prices down though.

So, someone could open up a cash-only chain store and have lower costs that could allow them to price things a couple percent lower, but the absence of that business suggests that they know nobody wants to go to the trouble of paying cash anymore for a savings of a few bucks a month.

I expect that if credit card fees went to 0 tomorrow, no prices would change (though I'd lose thousands in value I get from points each year). Many retailers like grocery operate on thin margins already, so they'd be especially eager to keep the block of cheese at $2.69 instead of dropping it by a few cents.

And even if you could prove that eventually some retailer would give pass on that savings to customers, I still would rather use a card than deal with cash. And stores know that they sell more than they would if (1) everyone had to carry cash everywhere they go and also (2) if people couldn't spend on credit. That's what the retailers are spending 3% on.

Re: Capital One to acquire Brex for $5.15B

#346

Post by xp84 »

vel0city wrote: post #337
lotsofpulp wrote: post #266

Earlier quoted context omitted.

It's a non existent problem in the US, too. The internet likes to blow things out of proportion, but not only are pretty much all payments made with tap to pay for many years now, even when it was magnetic strip, the incidence rate was miniscule.

> It's a non existent problem in the US Dead wrong. Its still a big problem in the US. https://www.kansascityfed.org/research/payments-system-resea... > In 2023, 21 percent of U.S. consumers experienced financial fraud: 17 percent of all consumers (or 18 percent of consumers who own credit cards) experienced credit card fraud, and 8 percent of all consumers experienced non-credit card fraud (with some consumers exper…

We are moving towards it... if every site accepted both Apple Pay and Google Pay we'd be there. If we got there, you could make the case that we ought to all be able to file all the numbers off of our cards and never need to give them to anyone. But the problem is that even with 99% adoption, those secrets still have to be printed on the cards and used some percentage of the time to support the laggards -- and it only takes one hack or phish to defraud you.

Re: Capital One to acquire Brex for $5.15B

#347

Post by xp84 »

tecleandor wrote: post #123
xp84 wrote: post #90

Earlier quoted context omitted.

(Frame of reference: US only) That's a shame, given 18-25 is just the age where a credit card skimmer or online card fraud causing a big fraudulent withdrawal from your checking account, and weeks of waiting to get it back, could be devastating. This has happened to people in my family (likely from gas stations) but we only use credit cards except to pull cash from ATMs, so we only suffer a temporary dip in our avail…

That's way less common in Europe. Most places are chip and pin or NFC and that limits skimming quite a lot.

You can still skim the magstripe with a skimmer over a chip reader, even if the original reader doesn't read the stripe. Then you can use that number online, probably to buy gaming currencies, giftcards to flip, etc.

Re: Capital One to acquire Brex for $5.15B

#348

Post by vel0city »

xp84 wrote: post #346
vel0city wrote: post #337

Earlier quoted context omitted.

> It's a non existent problem in the US Dead wrong. Its still a big problem in the US. https://www.kansascityfed.org/research/payments-system-resea... > In 2023, 21 percent of U.S. consumers experienced financial fraud: 17 percent of all consumers (or 18 percent of consumers who own credit cards) experienced credit card fraud, and 8 percent of all consumers experienced non-credit card fraud (with some consumers exper…

We are moving towards it... if every site accepted both Apple Pay and Google Pay we'd be there. If we got there, you could make the case that we ought to all be able to file all the numbers off of our cards and never need to give them to anyone. But the problem is that even with 99% adoption, those secrets still have to be printed on the cards and used some percentage of the time to support the laggards -- and it onl…

> if every site accepted both Apple Pay and Google Pay we'd be there.

So add another layer of duopoly and middlemen to the way I pay for things. No thanks!

What happens when Google permabans me because I failed to pay a $0.50 cloud bill a few months ago and I got forever locked out of my iCloud account? Guess I can't buy anything online again ever.

Don't get me wrong I've used these for payment processing before, but I'd really prefer some kind of more standardized way of doing payments directly instead of adding yet another middleman. I already have a secure token device with me (the credit card), I should just be able to pay directly with it through the website.

Re: Capital One to acquire Brex for $5.15B

#349

Post by irjustin »

HWR_14 wrote: post #286
irjustin wrote: post #224

Earlier quoted context omitted.

There's a lot of speculation about how different rounds will get paid out. Unless someone has insider information and is willing to post, we have absolutely no idea who was made whole, who lost and/or who gained. At the size of Brex, anything is possible and it depends on how much leverage they had at each priced round. Guaranteed payout, equal, founders multiplier, lead multipier. All possible. Additionally, what pe…

What is a founder/lead multiplier?

It's a different form of guaranteed payout where their value is a multiple on the next round or buyout event.

Both guaranteed payout and multiplier are forms lowering your specific allocation of the evaluation so you get a larger payout vs the rest of that group or future groups.

Re: Capital One to acquire Brex for $5.15B

#350

Post by okhobb »

another_twist wrote: post #307
okhobb wrote: post #263

Earlier quoted context omitted.

Pretty sure Ramp uses Elixir.

the Ruby on Rails of Erlang, I guess. Maybe we just generalize the thesis to - the stack must be the ruby on rails of X language.

I'll give that and agree the underlying is a quibble.
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