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Amazon-Stripe partnership

(stripe.com)
258 points polyrand | 12 comments | 23 Jan 23 15:38 UTC | HN request time: 0.591s | source | bottom
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vishnugupta ◴[23 Jan 23 17:17 UTC] No.34491814[source]▶
I worked on Amazon Payments systems for quite some time back in the day. We took pride in being the best payment processors. Had direct connections with card networks, banks and what not. We even launched a PayPal competitor[1]. They launched a Square like device for physical retailers[2]. They invested some serious money in building and maintaining all of that.

However going by this news seems like Amazon has more or less given up on their payments ambitions. Could be also due to recent layoffs. This is a big news. Maybe Amazon wants to focus on being good at few things instead of running hundreds of experiments.

Edit: References.

[1] https://pay.amazon.com

[2] https://www.forbes.com/sites/ryanmac/2015/10/30/amazon-kills...

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1. MuffinFlavored ◴[23 Jan 23 19:12 UTC] No.34493477[source]▶
> Could be also due to recent layoffs.

Just a quick guess I am pulling out of my ass.

Did somebody high up do a cost analysis/breakdown that said: is this entire business org making the company money or can we just use Stripe for less money?

Does it boil down to that gross oversimplification or not?

I'm sure it isn't easy to quantify the intangibles (if there were any) on what edges Amazon had over Stripe and benefitted from by choosing to do it in house. I'm sure it might not seem like an apples-to-apples comparison, but I guess when you zoom out high enough (company spending $X money in, getting Y out) it's comparable to any other purchasable good/service?

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2. ericmay ◴[23 Jan 23 19:32 UTC] No.34493753[source]▶
> Did somebody high up do a cost analysis/breakdown that said: is this entire business org making the company money or can we just use Stripe for less money?

That would definitely be a factor, but also competitive strategy and product placement. Do they really want to try and take on Stripe, Apple Pay, Shopify, etc? What exactly are they offering that's unique? Is it a core competency? How does this work alongside existing business interests?

And more.

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3. MuffinFlavored ◴[23 Jan 23 19:52 UTC] No.34494018[source]▶
> Do they really want to try and take on Stripe, Apple Pay, Shopify, etc?

Is the answer "they did when the Federal Reserve had interest rates at 0.25%" and now that interest rates are currently are 4.5% headed toward potentially 5%+ and/or just staying in the 4-5% range for at least 6-12 months "no"?

Somebody (multiple people?) obviously signed off on investing resources into this in the first place. How long ago, I'm not sure. Could some clairvoyantly even back then that this would get scraped? No clue, I have no internal leg up/leak/data.

Why was the answer yes then (yes = invest in it) and now, when they have a finished-ish product, no (no = don't try to internally compete with Stripe)?

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4. ericmay ◴[23 Jan 23 19:58 UTC] No.34494099{3}[source]▶
Low interest rates can mask poor business decisions, or make it cheaper to place bets on new products. Higher rates change the IRR calculation and perhaps overall business strategy too. So yea probably re: 0.25%
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5. ethbr0 ◴[23 Jan 23 20:11 UTC] No.34494274[source]▶
Good note when talking about large businesses and org-wide initiatives.

It's easy to forget (looking from the bottom-up) that when you're surveying from the top-down, there are always alternative places to spend $1.

So it isn't enough to make >$1 in return for every $1 invested, you have to offer better return than the other things the company could be doing with that capital.

F.ex. in retail, there's an everpresent alternative of investing in logistics and warehouse automation, which saves the business a LOT of money

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6. MuffinFlavored ◴[23 Jan 23 20:28 UTC] No.34494517[source]▶
> So it isn't enough to make >$1 in return for every $1 invested, you have to offer better return than the other things the company could be doing with that capital.

And the big thing now (at least I think it is, although I don't have any proof that companies are actually doing this) is...

https://www.investors.com/etfs-and-funds/sectors/sp500-compa...

I don't think every one of these corporations is going to take 100% of their cash on hand and stash it into 10 year bonds overnight...

But I'm lead to believe some variation of this is happening. Corporations can make 3-4% risk free + short term. If you work on a project that doesn't bring the company at least 3-4% ROI after it's all said and done (you, your managers, all expenses, etc.)... why are you owed a job?

Very cruel and mean reality, right?

7. MuffinFlavored ◴[23 Jan 23 20:31 UTC] No.34494554{4}[source]▶
Where do companies like Apple park their cash short term? Obviously not 10Y bonds most likely?
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8. ericmay ◴[23 Jan 23 21:07 UTC] No.34495040{5}[source]▶
Short-term yea treasuries and things like that.
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9. MuffinFlavored ◴[23 Jan 23 21:11 UTC] No.34495095{6}[source]▶
How do you get notified of HN comment replies, or do you also incessantly check your profile comments like I do?
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10. ericmay ◴[23 Jan 23 21:27 UTC] No.34495318{7}[source]▶
I check them incessantly depending on how the day is going :)
11. unmole ◴[24 Jan 23 02:57 UTC] No.34498569{5}[source]▶
Apple specifically runs its own hedge fund to manage its cash: https://en.wikipedia.org/wiki/Braeburn_Capital

OK, not technically a hedge fund.

12. vishnugupta ◴[24 Jan 23 05:25 UTC] No.34499727[source]▶
> alternative of investing in logistics and warehouse automation, which saves the business a LOT of money

That was my best educated guess. For long, Amazon invested in payments believing it to be a differentiator and also to spin it off into its own business unit. The payments division at Amazon is huge. But after two decades of not going anywhere with payments business they seem to have thrown in the towel and focus instead on physical logistics side of e-commerce.