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>>>> "Stripe made its debut in 2011 .... had spent two years testing their service and forming relationships with banks, credit card companies, and regulators so customers wouldn’t have to".

Can somebody help throw light on:

how Paypal was lagging in 2011 when compared to stripe ?

-OR-

how Collisons went forming better relationship with bank to build a system better than Paypal ?

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Stripe is an ISO with First Data Merchant Services (FDMS, I believe now owned or controlled by Wells Fargo) doing the actual processing and, as such, assumes a different legal role than PayPal (which is a VAR for Paymentech).

The "two years testing their service" part is longer than a lot of ISO certifications, but that all depends. Ultimately, though, it's a lot easier to be certified as a VAR due to the fact that the processor (a bank usually, though can be an ISO) assumes more responsibility (risk/liability) in the relationship.

Regarding "forming better relationship with bank [sic]", it's not so much that one is has a better relationship than the other as it is their relationships are fundamentally different.

Paypal's white label product was unusable (literally for some companies). Their banking relationships did not need to be better than Paypal's to have a better white labeled, developer centric payments gateway than Paypal.

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