When Adyen dropped 50% many said “payments is a race to the bottom.” Things are never so simple. Margin matters, but so does value. How do you drive both? 👇 🧠🧠🧠 The argument for race to the bottom The thesis goes there are two paths. 👉 Compete for big contracts (Adyen). This "forces you to lowball" on price. 👉Go after small businesses (Stripe). This forces you to go wide to service the business that balloons expenses, killing margins in time. The thesis says- This results in short-term growth spurts, but long-term payments companies are forced to compete their profits away. But it's wrong. That’s not the only dimension companies compete on. 🧠🧠🧠 The new battleground is performance Payments are easy; but the edge cases are hard. Companies that solve the most edge cases increase conversion at checkout, which increases revenue for their clients. What drives value depends on which of the 5 types of customer is buying. 👉 The price-sensitive juggernaut (e.g., Walmart). Wants the lowest possible price and will take on work and complexity to achieve it. 👉 The global tech enterprise (e.g. Airbnb). Values price, stability, and global reach. 👉 The mid-market retail, e-com brand. (e.g. Asos). Values market reach and conversion. 👉 Small and medium businesses. (e.g. boutique coffee shops). Values ease of use and breadth of offering like payroll or inventory. 👉 Legacy merchants coming to e-commerce late with “omnichannel.” (e.g. department stores). Needs to simplify their operations and reduce multiple platforms to a single platform. 🧠🧠🧠 Different providers compete more on price or more on R&D and performance depending on a number of factors. 👉 Incumbents like Chase Paymentech offer strong unit economics by packaging the whole offering as a bank (Chase) that can cross-sell much more. 👉 Scale digital companies like Adyen offer a single global platform, but compete on unit economics. 👉 Scale players like Stripe are the default choice for small companies and platforms. 👉 New entrants like Nuevi, Checkout and Moov are pushing the R&D and performance barrier to win younger companies. 🧠🧠🧠 Payment’s isn’t a race to the bottom it’s a two dimensional axis. Price vs performance. What drives performance depends on what your goals are as a business. Find more on the blog (you know where to get it)

Heard of a few people building a new version of @mint now that Intuit shut it down. I wouldn't recommend it if you want to build a venture-scale business. There aren't that many people who want to actively manage their finances; startup graveyard is littered with PFM's.