Stripe raises $600M at nearly $36B valuation

Can you elaborate like I'm 5? Just very high level for those of us who only know "they charge a flat fee and a percent which makes microtransactions hard".

What are the strategies/thoughts in the industry? Holding and batching payments on a per-user basis? Trying to get agreements so you can batch payments on a per-processor or per-network agreement? Hourly? Daily? Weekly?

> Just very high level for those of us who only know "they charge a flat fee and a percent which makes microtransactions hard".

That's pretty much the story :-). And so the questions are then whether we subsidize the transactions, batch them (as you say, though that makes refunds and statement descriptors tricky), get card networks to change their policies, or somehow shift how the payments are made (e.g. encouraging cheaper payment methods).

> batch them (as you say, though that makes refunds and statement descriptors tricky)

Maybe batch them per user per website, that will solve statement descriptors a bit

At a very high level the batching-with-refunds issue sounds like the kind of problem that the Lightning network on bitcoin tries to solve, or bilateral netting in other financial contexts.

I recall thinking a few years ago that offering batching as a business built atop stripe sounded like a neat business -- effectively letting users choose a batching solution if they desired, but after closely reading the Stripe Terms of Service, I think it appeared to be disallowed.

If Stripe were willing to allow third parties to act as a batching passthrough (or if I was wrong and you do!), this seems like a low-cost way to let the market decide what an acceptable refund/statement descriptor regime should look like.

I'm honestly a bit surprised credit card companies haven't been more open to the option of lowering the cost of microtransactions, since that seems to be what the Internet's moving towards as a whole.

They'll drag their feet until they can't. It's a go first bunch-up. Eventually someone will do it as a competitive advantage attempt and the rest will fast-follow (you see this happen frequently in such markets, as with the $0 stock trading bunch-up & fast-follow that happened recently).

The various US credit card & processing companies have an extraordinary thing going for themselves. Visa and Mastercard have cartel-like margins (Visa's operating income margin for 4Q19 was 66%, you don't see that outside of maybe illicit drug operations or Facebook's monopoly in its earlier thinner incarnation pre-Russiagate). They're super sensitive to giving any ground on their fee levels, out of fear (correctly so) that they'll never get them back.

Before the market drop, Visa was worth more than all publicly traded banks in Europe combined (frankly that may still be true post market drop, as Visa hasn't declined all that much).

In the public transport space, batching is absolutely required, usually there's a mechanism of "preauth on first tap" and rapid distribution of deny lists.

Payment requests are accumulated and batched, combined with "capping" of travel costs (eg max/day, weekly discounts etc).

Makes you wonder how much those companies really compete.

The EU had to legislate to get the fees low enough that microtransactions might possibly be reasonable.

Visa etc are now only allowed to charge a percentage, 0.2-0.3%, but the intermediate (Stripe etc) can still add a flat-rate fee.