As usual, everything is about money. You can be sure that part of the interest in a paypal acquisition is paypal's consumer wallet product which allows them to extend into lines of business that are currently constrained by Stripe's model.
You seem to care more about the aesthetics of the sentence than the meaning behind it. We know that a company is not a person. It doesn't have a consciousness. It doesn't have a singular morality to work with. It borrows the decision making of its employees and contractors. We know that the "morality" of a bank or credit card company is really just a layer of abstraction for a group of decisions it makes to avoid bad press/sentiment/oversight/regulation. But if you analyze why people have morality, it's not that different; there are LOTS of things people would do that they currently don't if there was no underlying consequence.
Excuse me for interpreting the comment as written, but either way, the comment only makes sense if you believe that Stripe is going to take over paypal and shutoff profitable lines of businesses based on moral principles - otherwise, what's the problem?
If you actually understand that this is all about money, then it's obvious that this is not going to happen.
We all know it's a risk thing; we all know it's a money thing.
And from experience I think it will happen. It will match Stripes current behavior pattern - regardless if their motive is money or morals. In fact, I think it will happen because it's obvious it is about money.
I'll take the bet that you're totally wrong.
Good news is, this is one of the niche areas where prediction markets make sense.
I wouldn't mind seeing a few predictions around this acquisition and the longer term outcomes like the one y'all are discussing. I have no interest in participating, just want to see where folks are leaning.
That said, I wouldn't bet (if I were you) on something without clearly defining the terms. If Stripe simply homogenizes contractual rules that match their contracts with Mastercard, etc, which side of the bet would that fall on?
I'm not sure why everyone in this thread consistently ignores the fact that PayPal has been profitably servicing these types of businesses for years. The risk has already been mitigated.
> If Stripe simply homogenizes contractual rules that match their contracts with Mastercard, etc, which side of the bet would that fall on?
That would be me losing the bet. What you and others in this thread seem to be missing is that Stripe's risk factors are not the same as PayPal's because Paypal works directly with merchants rather than as a proxy for the card rails like Stripe. The idea that Stripe would take ownership of the platform and start shutting off paying customers is absurd, and as of yet, I haven't seen anyone acknowledge this fact in their explanation of why Stripe would throw away free money.
No, chargeback rates are not the only reason banking companies like Mastercard are dubious about adult content. In 2021 they added contractual terms to ensure that adult content uses age verification, has the consent of the participants, and to remove illegal content before it is published at soon after it is reported.
But also, the financial industry has a history of discriminating against their customers based in moral reasons (or at minimum bowing to regulatory pressure which stemmed from upstream morality decisions).[1]
[1] https://www.vice.com/en/article/pa8xy9/is-the-doj-forcing-ba...
Morals, generously interpretation of the usage, was just to indicate that Stripe has a more narrow risk window.
Only an idiot would think it was about actual human-grade morals or ethics. Let alone that there were actual morality police.
The tone of your original comment suggests you believe they're going to take over and start shutting off morally unacceptable money printers.
I do believe that Stripe will execute they same Stripe pattern in the merged company which will reduce choices in the market for businesses.
Correct. But do you understand why that is? What is the theory of mind you have that makes you believe Stripe would come in and shutting off paying customers?
> I do believe that Stripe will execute they same Stripe pattern in the merged company which will reduce choices in the market for businesses.
Why would they do that? This doesn't make any sense unless you actually think morals are involved.
They restrict the ones that are smaller and independent.
I think that Stripe will shut off paying customers BECAUSE I HAVE SEEN THEM DO IT. That is what first hand knowledge is.
The thing that really doesn't make sense is that Stripe selectively applies their written terms of service and policies. Do you understand that?
You are overindexing on your anecdotal experience to draw conclusions that make no sense. Paypal earns roughly 6x the net revenue of Stripe while processing a similar volume of transactions. Paypal has obviously figured out how to service these businesses profitably, yet for some reason you think Stripe would throw away billions for no reason.
Make that logic make sense.
You'd ignore a pence to pick up a pound.
However, even if it were only in the hundred millions, there's no reason to throw away millions of dollars. The reason PayPal services these lines of business in the first place is because they make money doing so (since unlike Stripe, PayPal's product isn't subject to the constraints of the card rails).
Anyway, if that's the quality of conversation you're offering then abandoning the conversation makes sense. Have a good one.
Stripe is currently passing on these revenues. Stripe has been hostile to these revenue streams for more than a decade.
You seem to think their behavior will change after an acquisition. An acquisition that is also a (dangerous) market consolidation. I don't think they will.
How is PayPal not subject to MC rules when MC is used as a funding source for a PP account that purchases cannabis-adjacent services? Is it magic? Is it some plausible denial thing?
Also, if their only motivation is money - and lets assume that is true - then taking a few billions in high-risk money puts their other even-larger billions at risk.
Do you see that? Yes, they could get new revenue of ~30B adding to their existing ~5B. And assuming several billion in high-risk (4B?) now the question is...would you throw away 4 dollars of your 40 dollars to reduce the risk of the remaining 36? While also knowing you can grow into other lower risk markets? Would you throw away 4 high risk dollars to replace them in two years with 4 new low risk dollars?
No. I'm explaining that PayPal as a business has their own risk models and contractual relationships with merchants that allows them to serve these lines of business profitably. This is the reason why PayPal services these businesses in the first place.
After a Stripe acquisition, that doesn't change, PayPal's model continues to operate profitably for high risk merchants while Stripe's continues to be risky due to the fact that Stripe is just a payment processor, while PayPal operates more like a bank.
> How is PayPal not subject to MC rules when MC is used as a funding source for a PP account that purchases cannabis-adjacent services
The card networks establish strategic partnerships with large businesses in order to cater to their needs. Since PayPal has already established a profitable risk model to service these merchants, the card networks are comfortable with more permissive checkout rules since PayPal is contractually on the hook for chargebacks and fraud.
> taking a few billions in high-risk money puts their other even-larger billions at risk.
How does that money put their larger business at risk?
As others have said, it's about perceived brand risk (V/MC allowed X terrible transaction to take place) and regulatory risk.
spoiler: visa and mastercard do act as a morality police.