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Comment by kabes | Hacker News Reader

I think Stripe might soon offer payments through Paypal in some way. A few weeks ago I tried their new PaymentIntents api. I forgot to give a valid payment method in the request and it returned me an error stating I need one of following payment methods:

  card_present, card_present_single_message, ach_credit_transfer, ach_debit, acss_debit, alipay, bacs_debit, bancontact, chf_credit_transfer, eps, giropay, klarna, multibanco, p24, paper_check, paypal, sepa_credit_transfer, sofort, wechat, or card

Note that this list includes paypal!

I asked them why that list included paypal and how that would work. They replied it was a mistake and it has since been removed from the error. But this tells me that internally they're working on paypal integration.

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Or they have done at some point, scrapped it and forgot to remove it from an enum used in an error message. I wouldn't hold my breath.

How do PayPal/Stripe move money around?

Meaning, are they integrated directly with Mastercard/Visa/banks or do they use a First Data/TSYS/FiServ?

I believe the rely on the underlying network of Mastercard, Visa and Amex. Fiserv is more on the ACH side.

How does the money actually exchange hands though? Like, your business wants to charge my Mastercard $100. Who moves the money from the mainframe on my bank? I don't think Stripe is integrated with every bank in America?

The card network handles this I believe. I've never worked in payments, but I have spent some time analyzing the space for investments. As far as my knowledge with regards to online payments, the merchant gateway talks with the merchant acquirer/payment processor, the acquiring bank then pays the merchant, and the acquiring bank sends a request to authorize and settle the transaction through the card network, which talks to the consumer's bank/digital wallet. Stripe in this case is the merchant gateway and acquirer. If PayPal is used, ACH replaces the credit card network.

> card network

> merchant gateway

> merchant acquirer/payment processor

> acquiring bank

so, since no merchants integrate directly with Mastercard/Visa (it would seem that's just not the business model of the industry. I'd also gamble it isn't possible because if you're a mom and pop shop, Mastercard does not care for you to integrate directly with them), they are going through networks/gateways, which would be TSYS/FiServ/First Data, yes?

I'm just trying to picture a world where payment processor fees are lower because instead of PoS systems for businesses connecting to gateways/middlemen who need to take a cut and hike the rate up, they connect directly to the card network/the underlying bank.

But, it sounds like a service like that would be exactly the middlemen I'm describing, who need to take a cut of the fees :P

It doesn't make much sense for PayPal to be integrated into Stripe (from PayPal's perspective), as it gives PayPal's Braintree a competitive edge over Stripe.

I've used SagePay in the past and they offer PayPal payments via their API. Big mistake. You have less control over the payment experience, and when SagePay have an outage, it takes out both their payment method, and PayPal.

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