Surprisingly small contract. It's interesting to see that a full government contract for a payment provider is a fraction of a US mid-size company's cloud bill. I am constantly surprised by things like this. Here's another: there are more foreigners in Taiwan (total pop. 25 m) than in China (total pop. 1.4 b).
Interchange average in the UK was about 0.2% last time I looked (which was a few years ago), it't not much anyway.
Also the government doesn't really do card transactions. I imagine this is for fairly rare things like renewing your passport, booking a driving test or buying a title copy. Oh and visa fees maybe? Small beer anyway, it's not like people are paying taxes via card.
Brazil's central bank operates their instant payment network Pix [1] [2] [3] for ~$10M/year [4]. Its not that these are small contracts, but that large, inefficient, unnecessary contracts have become the norm (I argue). Similar example from India's UPI payment system [5]. The US has FedNow to move instant payments for pennies, but banking and payment system participants in the US ecosystem are avoiding it to continue to private payment system rake [6] (cc networks, Zelle commercial bank network, private wallets, etc).
The evidence is clear you don't need to skim 3% off of an economy to provide instant payment capabilities. The enterprise value of US payment companies is a function of how long they hold onto this volume for, when competition is ramping up. You're just pushing ISO 20022 XML messages around a bus.
> This makes the American dispute more sophisticated than it may first appear. Pix certainly puts pressure on private payment models, card networks and acquirers. It also reduces friction for consumers, small businesses and person-to-person transfers. But its deeper effect is institutional. It turns the bank deposit into an even more efficient payment instrument — and, by doing so, changes the role of banks in liquidity intermediation.
> There is an irony here. For decades, the United States built the narrative of private financial innovation. Brazil, through a public, interoperable and massively adopted system, produced one of the world’s most efficient payment infrastructures. The study notes how unusual Pix adoption was: more than 150 million users in its first year, use by nine out of ten small businesses, and daily volumes capable of reaching about 1% of annual GDP on a single peak day.
> The reading should not be triumphalist. Pix is a powerful innovation, but it is not cost-free for the financial system. It improves the user experience, reduces transaction costs and increases competition in payments. At the same time, it requires banks to hold more liquidity and may reduce the transformation of deposits into credit. For the United States, Pix appears as a digital-trade issue. For Brazil, it is a question of financial sovereignty. For banks, it is a question of liquidity. Pix began as a button inside an app. It became a piece of financial policy — and now, of geopolitics.
The BCB in Brazil does very little to operate Pix. It's effectively a P2P system, where the BCB forces all the banks to interop with one-another (and all the banks directly call eachother). They can operate it that cheaply because they do close to nothing technically (they host the main discovery endopints). The only place the BCB actually ingests data is via their reporting mechanisms.
UPI is a bit more centralized, where the NPCI does the top-level routing between banks, so their operating budget is likely much higher than Pix. It also is drastically more simple to be a participant in UPI compared to Pix.
For Pix adoption: you can thank Covid for that. The Brazilian government said if you wanted to get free money from the government, you had to set up and use Pix.
US Financial Innovation: I'd say the hard thing here is that the government is extremely strict (lots of regulation) when you start looking like a bank. Lots of companies have tried to innovate here, but regulation makes it really hard to do. There's a lot of regulator capture going on.
In both Brazil and the US, making something like Pix mainstream requires regulation. Brazil did its part, but it’s unclear whether the US will do the same anytime soon, I don't think so, unfortunately. Technically, it would benefit the American population (the process of making pix payments is so smoothless), but payment companies may have little incentive to support it, and could lobby against it.
In Brazil, the Central Bank overpowered the coordination problem. In the US, it may be the opposite: the government seems to have less power over the payment lobby, or at least less willingness to confront it directly.
Feels odd that you exclude mentioning the EU, which has had instant transfers for more than a decade. More than two decades, if you include things like iDeal from The Netherlands.
Wasn't intentional, I mention SEPA and Wero in other comments, not intended to be an enumeration of all instant payment systems currently active globally. My apologies!
> not intended to be an enumeration of all 54 instant payment systems currently active.
Even then, not mentioning those who pretty much started / invented instant transfers still seems odd :) but no need to apologize haha, maybe I was a bit too abrasive.
I get why you prioritized to mention those though. The Chinese and Indians have leapfrogged us. No more fussy legacy (digital) cards, just scan a QR and go. Even illicit food stalls and street wanderers have accounts, when they wouldn't be able to get a 'real' bank account.
And the Chinese and Indians don't have to pay tribute to the Mastercard-Visa overlords either. Although Wero and the digital Euro might eventually change that for Europe too.
Can you imagine how cumbersome conversations would become if people felt obligated to qualify ad-hoc statements with what amounts to a historical ledger?
Every new entry would open up an opinion around “if you included that, why didn’t you include this?”
don't centralized payment systems like this reduce the overall resilience of the ecosystem and prevent future innovation? You hint on those lines with the possible future transformation of deposits into credit.
Why doesn't the US private ecosystem manage to lower costs similarly? (Zelle comes to mind). It is interesting that this has happened in more highly regulated countries where the free market likely could not have come up with a cheaper solution on their own due to the same overbearing system that effectively forces adoption of this centralized solution.
All payment systems are centralized. Zelle is owned by the largest US commercial banks ("Early Warning Services"), Congress directed the Federal Reserve to build and offer FedNow as a utility so smaller banks would not be excluded from offering instant payments. It costs $~30/month (last I checked the rate sheet) to plug into it. The instant payments are the utility, your opportunity to innovate is using this as a component of your user experience.
Propose some innovation here, I am interested, as someone adjacent to payments in financial services. Besides instant payments, the most we've seen is closed wallets (Venmo, Cash App) no longer needed with broad instant payment access from most demand deposit accounts and Buy Now Pay Later (BNPL) (and I argue BNPL is simply dressing revolving credit card debt up as innovation).
> Why doesn't the US private ecosystem manage to lower costs similarly? (Zelle comes to mind). It is interesting that this has happened in more highly regulated countries where the free market likely could not have come up with a cheaper solution on their own due to the same overbearing system that effectively forces adoption of this centralized solution.
Because it is a grift ("regulatory capture") [1] [2]. The "overbearing system" is the result of regulation to bring the consumer excess of cheap payments to an entire country's financial user population. Why does Jamie Dimon not like stablecoin yield [3]? Because JPMC makes almost $100B/year in interest income taking customer deposits and lending against them, which stablecoins would compete against by operating as a form of narrow bank, parking the underlying deposits in risk free US Treasuries [4].
As a US financial services consumer, it is hard for you to avoid the rake of the machine built to skim off of you as you hold onto fiat or move it, but the rest of the world can avoid being captured by it (as this piece demonstrates). Also, Europe can't regulate Stripe as easily as they can Adyen. You don't have to be the biggest or the greatest, it just has to work "good enough".
> Propose some innovation here, I am interested, as someone adjacent to payments in financial services.
Well, as a brazilian who is used to pix and has also faced the bad payment ux in american, I think a possible solution should be adding the missing Pix-like layer above the existing US rails.
One of the best part that makes Pix an incredible experience, It’s that the app almost doesn’t matter. I can use one bank, you can use another, a merchant can use a different provider, and it still works through the same basic language: QR code, Pix key, payment request, confirmation screen. I can even transport my "pix key" to another app/bank provider.
So maybe the US opportunity is a agnostic interoperability layer on top of FedNow/RTP/Zelle/bank APIs: universal aliases, QR payments, routing, fraud checks, receipts, and reconciliation. Making instant account-to-account payments feel universal before the government forces a universal standard.
I don't think consumers broadly should be the main goal first, the best initial path should be small-business, marketplaces, rent, etc.
If someone could own that neutral UX/addressing layer, that seems much closer to the useful part of Pix than just another closed wallet.
> Propose some innovation here, I am interested, as someone adjacent to payments in financial services. Besides instant payments, the most we've seen is closed wallets (Venmo, Cash App) no longer needed with broad instant payment access from most demand deposit accounts and Buy Now Pay Later (BNPL) (and I argue BNPL is simply dressing revolving credit card debt up as innovation).
UPI for instance only works with a physical SIM. Your phone number on the account must match the physical SIM on the device. This indirectly relies on India's insistence on KYC (for accounts naturally) on issuance of physical SIMs. "Innovation" here would be a player who can support VOIP based phone numbers (maybe by complying with phone number KYC in some other way).
UPI also makes it quite confusing to deposit money to a particular account you own. You could share a specific identifier (string or qr) based on your account but the other party generally assumes they can send you money using your phone number, and sometimes follows through with that.
(I don't have a finance background.) There any multiple instances of a one-size fits all user experience decision which strikes me as a result of the centralization and removal of competition (in efforts to drive up adoption).
I don't disagree with most of your reply (thanks for the thoughtful citations too). But i wonder why the free market cannot lower cost/settlement time similarly.
> UPI for instance only works with a physical SIM. Your phone number on the account must match the physical SIM on the device. This indirectly relies on India's insistence on KYC (for accounts naturally) on issuance of physical SIMs. "Innovation" here would be a player who can support VOIP based phone numbers (maybe by complying with phone number KYC in some other way).
The Indian government has mandated this for strong identity assurances. Your only hope at "innovation" (ie violating financial services regulators and laws) here is cash or something like Monero.
> UPI also makes it quite confusing to deposit money to a particular account you own. You could share a specific identifier (string or qr) based on your account but the other party generally assumes they can send you money using your phone number, and sometimes follows through with that.
I haven't used UPI recently, but I imagine this is a UX issue around aliases (phone numbers, email, and other human identifiers that associate to an underlying account).
TLDR People problems cannot be fixed with tech (in this context, regulatory requirements or alias UX, submit a public comment to the regulator if you can).
> I don't disagree with most of your reply (thanks for the thoughtful citations too). But i wonder why the free market cannot lower cost/settlement time similarly.
Because without regulation, it turns into Monopoly (the board game). Sometimes, competition can be encouraged, but in some cases (broad, shared infrastructure) it cannot and regulation must fill this gap to ensure the target outcome. This is why we regulate electric utilities similarly. Happy to help, I am very interested and curious on this topic.
Most blockchain systems are fairly or even extremely centralized as well and amount to little other than decentralization theater. Bitcoin and Ethereum are arguably more of an exception than the norm.
None of which are in production at scale. I admit crypto is optimal for less than legal transactions and speculation, but the volume for legal payment transactions is negligible.
Solana mainnet was shown to have capability to handle 100k transactions per second [1]. Granted, it was a synthetic benchmark of noops, but it shows the capability is there.
For reference, Visa claim 83k TPS [2] for their system. It also has the advantage of being vastly cheaper than tradfi payment networks at ca. $0.0005 per transaction [3] irrespective of transaction amount.
Until it is in prod, it is a proof of concept. Blockchains solve for low trust; if you have trust, you don't need the efficiency loss of a decentralized ledger or blockchain. Central banks provide trust.
As mentioned in one of my other comments, Pix in Brazil costs ~$10M/year. They process ~6-8 billion monthly transactions and roughly $6.7 trillion in payment volume a year [1]. That's roughly ~$0.0015/transaction based on the math in this comment, and we don't know what the ceiling is based on existing capacity (which would drive per transaction costs down further). Choose boring technology, when possible [2].
The innovation in this context is nuking the profits of Visa and Mastercard (their margins are ~45-50% [3] [4] [5]), replacing them with central bank instant payment systems run at cost. The reduction in their revenue is money back in the pockets of everyone paying unnecessarily to move value around. I highly recommend the book "The Innovator's Dilemma" on this topic [6].
Pix is really good but I don't think it beats Solana or Ethereum L2s.
Most recent indicator of peak Pix transaction volumes I could find [1] was 227M/day (=2700 TPS). You can see yourself that Solana does 130-140M/day consistently. Pix fees you quote are still triple Solana's.
Not to mention there is the entire decentralization aspect, which means the government does not control your money as with other blockchains.
Fraud can be managed at instant payment rails, you don't need credit card rails to manage it; fraud must be managed on any rails utilized, so it is somewhat agnostic. If you as a consumer want credit card chargeback protection insurance, push the fee onto the consumer with a surcharge to cover the cost. I believe the evidence is robust credit card rails are unnecessary in today's world, plain and simple. They are a bloated legacy holding on for relevance (and their grossly excessive margins) imho.
Payment processing costs are a scam. They're 10x as expensive as they need to be to fund rewards programs and fund the financial system.
EU max credit card transaction fees are 0.3%, in the US they can be up to 4%.
It just doesn't cost 4% of a transaction to handle the exchange of funds. Just wealth transfer to finance people and the upper class who take advantage of credit card perks.
Can someone explain to me if EU card transactions are capped, why Stripe charges me (US) the full ride on my EU customer's cards? In fact, I get charged even more for EU cards – perhaps as much as 2.5% extra.
I just checked and I get charged ~8% in fees on a 10 euro transaction on Stripe. Of course some of that is the low transaction amount (flat 0.30), but it's brutal for a small business like myself.
The EU only capped interchange fees, which is the amount that goes to the bank that issued the card. It did not cap the fees that go the your PSP. Which makes sense, since you can pick the PSP you do business with, but you can't pick the bank that issues your customers' cards.
(And I don't think it applies to US merchants like you anyways)
perhaps they are capped only for EU merchants, because EU government works to protect their own companies and citizens from foreign artificial unregulated monopolies.
in US, the government is more protective of private monopolies due to lobbying
Interestingly, the EU did manage to cap interchange on US cards paid by EU merchants to pretty much the same rate as that paid for domestic/intra-EU cards, at least at the POS. Many things are possible with a regulator with teeth.
Except in the US, it does. Depending on the card, it can cost as much as 4.5% (or more!) to run the card. You can argue that it shouldn't, but that's a different statement than it doesn't.
it is illegal for Merchants to charge credit card processing fees by law, they have to absorb these fees and cannot display them to the customer.
This naturally protects the artificial oligopoly of visa/mc/discover systems.
The moment you allow Merchants to charge cc fees (even 2-3%) and allow customer to choose low processing option (ACH/debit card/cash), the whole scheme falls apart and Visa/MC will slowly go bankrupt
the typical Merchant<->bank agreements all have clauses forcing them to absorb these fees and explicitly barring them from separately charging customer CC fee.
and most small/med businesses dont have clout to protest that, so they have to accept these terms in order to earn money
> the typical Merchant<->bank agreements all have clauses forcing them to absorb these fees and explicitly barring them from separately charging customer CC fee.
These clauses would be illegal in many states and countries these days, so they don’t.
The only good use case for a credit card is if you are buying something from someone you do not trust. I have a CC and it use it a few times a year. But using them to pay for groceries or ordering something from Amazon is just moronic.
The way I see it: you are either rich and don't care or you are poor and need to spend money that is not in your account (no judging I grew up poor and had to hide from debt collectors when I was a kid).
The irony is that every couple you shop with just increases the prices of their items to deal with the fees, so you're just paying more for items to feel good about getting reward program benefits.
I briefly skimmed this, but why are you wasting my time? What does this have to do with me earning free trips from being smart about how I buy things? does not compute.
Well, obviously it’s cherry-picked. It’s an example of something that challenges my intuition. Most things align with my intuition because I’m in my late 30s and have seen enough of the world to have a fairly good idea of the rough numbers. Here’s another one: the London Underground is older than the telephone.
There’s a light board game called Timeline where you have stuff like this and there are so many surprises. Temporal stuff is hard to reason about and the game catches that. But with large numbers one loses intuition easily: NYC’s subway vs. all domestic and international US air travel is closer in total passengers than one would think. The median American did not fly last year.
Stuff like this. It’s just Gladwell-fodder but numerically fun.
I misinterpreted your intent here, and that’s on me. Thank you for explaining, you clearly picked the sample as a comparison of fact, not as narrative. Apologies
Mollie B.V. is licensed and registered as an electronic money institution with the Dutch Central Bank (relationship number: F0038). Mollie UK Ltd is licensed and registered with the Financial Conduct Authority as a payment institution in the UK (FRN: 977968).
No point in marketing when you outright reject customers:
Thank you very much for the comprehensive feedback.
I have taken a look at the information you have provided and unfortunately, at this time, Adyen is only able to support businesses currently transacting more than €5M per year or businesses which are currently supported by a Plugin built by Adyen.
The reason for this is so that we are able to provide the right level of support and resources to our merchants at the right stage of their company growth.
If you would like to stay up to date with our payment offering please do sign up to our newsletter here.
In the interim, I want to ensure that you find the right provider, so I would like to direct you about payments. They are specialists in finding the most relevant payment solutions for all business models and I have no doubt they will offer you several great options.
I wish you the best of luck with your business moving forward, and hopefully we can reconnect in the future.
You can't just actually shed all your low value users and then poach the high value users, because then you're only competing for customers who are already large and have already long since integrated one of your competitors. This is often a somewhat harder problem than taking a lot of low and even slightly negative value accounts and hoping some of them become high value.
I wish more companies would try to serve tiny shops at the same time they serve multi million euro companies. The requirements for the two are very different, as is the support and customer care requirement. Integrating directly with Adyen as a small business is like running a kubernetes cluster on AWS to host your blog, except they'll have even less time for customer support to spend on your tickets when things don't go right.
Platforms like Stripe where anyone can sign up at any time drive up prices because the amount of low-profit companies needs to be offset by the companies making more. Great for small startups but a bad deal for major companies.
Stripe has also been criticised for forcing growing companies into enterprise plans the moment they hit certain growth numbers. That's one way to keep the business profitable, but it's not necessary if you only take on businesses that are already profitable enough dedicate a sales team onto.
Once you hit a certain processing threshold, stripe underwrites you. The benefit is some people get better deals or get to skirt by rules just by being immaterial.
Separately: Once you hit a certain threshold, you get an account rep and can ask for IC+ billing. This is sometimes better than the blended/sticker rate.
And furthermore, once you're really big enough, you can negotiate down Stripe's markup on the interchange. (As with any big enterprise contract).
A big reason Stripe got big was because they got their YC cohorts to use it. Payments before that was complicated and even though PayPal existed, most people didn’t know you could process credit cards like Stripe, you don’t need a PayPal account or wallet. It’s why they bought Braintree and that added even more confusion.
The lesson is, marketing to developers works. And the best way to market to them to by making their job easier.
Like with everything in business and engineering, there's a tradeoff. My previous employer used Adyen as major payment provider (for quite some time, too). Their cost structure is sensible, the payment methods they support are convenient[ß], and their functionality is reasonably solid even in the edge cases. But everyone who maintained the payment service kept cursing Adyen for their awful APIs. The python runtime powering the old system had to carry an unmaintainable and effectively abandoned library to be able to process the Adyen payment gateway messages.
From what I understand, Stripe's main value proposition was: "how can we make this gnarly, confusing and complicated system an easy-to-use service that does NOT require the end-user to internalise the entire payment provider state transition universe?" That is obviously a valuable service, but is it valuable enough to charge an ongoing rake of nearly 300 basis points?
ß: for some weird reason people still insisted that they absolutely must be able to pay with Paypal. 2+ years of fighting cross-corporate politics + KYB and still having to stomach insanely high commissions left a properly bad taste.
Having built on Authorize.net and a few other gateways before Stripe, I'd say yes - but the value that justifies the rake isn't the nicer API, it's what you no longer have to own. The moment you're paying out to third parties you're on the hook for KYC, identity verification, and the whole compliance/risk surface around moving other people's money. Connect absorbs that. Handing those pieces off so I stay compliant on payouts and can actually focus on the business is worth far more to me than the basis points. With other gateways I was assembling all of that myself.
Another reason is their competitors didn't get it the value prop because everyone had been competing on rates, and little thought given to developer experience... early on a lot of Stripe's competition's apis used fixed field text as the format for transactions.
The issue with bank transfers today is that the SEPA system is robust and established, but got no web compatible API.
But there are two projects (why one, if you can have two!?), one being Wero by different banks, the other being the Digital Euro by the European central bank. If either finds good adaption (Wero is rolling out slowly and for quite a bunch of banks every customer already got a Wero account automatically) this could move things around ...
I'm Irish, but I've built a website for an Australian client and they integrated something which did that. In the checkout, you could choose to pay with a system which would log you into your bank's website, where you could approve a payment, then return to the site on which you'd made your purchase, where it would instantly be marked as paid. I think that it may have taken a few days for the money to actually arrive in their bank account, but the payment was authorised instantly.
That would seem like a logical solution. So wouldn't it be convenient for the expensive payment methods if legalities prevented merchants from charging higher fees to customers using them?
Indeed. It's a triumph of consumer protection laws failing to protect consumers. Merchants here have to set their prices a bit higher to compensate for the fees and you still have to pay those higher prices as a customer even if you're using a more efficient payment method. I will never understand why the law wasn't set the other way - requiring explicit disclosure of payment fees to end customers and prohibiting payment services from incorporating these kinds of anticompetitive terms in merchant agreements - so that everyone could make an informed choice and market pressures would push the transaction overheads down.
Stripe allows for these kinds of payments, we've been updating our store to support Wero etc. It should give better conversation and processing rates than the US credit cards.
Well, it is signalling. It's signalling that there are competitors which are trustworthy enough for a government and it signals the overall trend one can observe how European governments detach from US companies. With some lower hanging fruit and some larger projects.
Got to love the people taking a swipe at the company. They found their market, can't you just be happy for them? They're hardly the only company in the world to only deal with bigger clients.
This site regularly dunks on European tech as being subpar, but when an American company gets ditched for a European one, barely anyone can find nice words to say. You really reveal yourselves in times like this, I've got to admit.
It's pareto better, all else equal (which, fair, it may not be in this case) for a company to serve businesses from $1 and up than to only serve $5M and up.
Also the government doesn't really do card transactions. I imagine this is for fairly rare things like renewing your passport, booking a driving test or buying a title copy. Oh and visa fees maybe? Small beer anyway, it's not like people are paying taxes via card.
But regardless this contract is _not_ for HMRC payments, its for gov.uk pay which is basically a centralised service that other services can use.
The evidence is clear you don't need to skim 3% off of an economy to provide instant payment capabilities. The enterprise value of US payment companies is a function of how long they hold onto this volume for, when competition is ramping up. You're just pushing ISO 20022 XML messages around a bus.
[1] https://en.wikipedia.org/wiki/Pix_(payment_system)
[2] https://frontierfintech.substack.com/p/55-send-pix-brazils-i...
[3] https://brazilstockguide.com/behind-the-lines/the-cost-of-pi...
> This makes the American dispute more sophisticated than it may first appear. Pix certainly puts pressure on private payment models, card networks and acquirers. It also reduces friction for consumers, small businesses and person-to-person transfers. But its deeper effect is institutional. It turns the bank deposit into an even more efficient payment instrument — and, by doing so, changes the role of banks in liquidity intermediation.
> There is an irony here. For decades, the United States built the narrative of private financial innovation. Brazil, through a public, interoperable and massively adopted system, produced one of the world’s most efficient payment infrastructures. The study notes how unusual Pix adoption was: more than 150 million users in its first year, use by nine out of ten small businesses, and daily volumes capable of reaching about 1% of annual GDP on a single peak day.
> The reading should not be triumphalist. Pix is a powerful innovation, but it is not cost-free for the financial system. It improves the user experience, reduces transaction costs and increases competition in payments. At the same time, it requires banks to hold more liquidity and may reduce the transformation of deposits into credit. For the United States, Pix appears as a digital-trade issue. For Brazil, it is a question of financial sovereignty. For banks, it is a question of liquidity. Pix began as a button inside an app. It became a piece of financial policy — and now, of geopolitics.
[4] https://news.ycombinator.com/item?id=44753626
[5] https://en.wikipedia.org/wiki/Unified_Payments_Interface
[6] https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
UPI is a bit more centralized, where the NPCI does the top-level routing between banks, so their operating budget is likely much higher than Pix. It also is drastically more simple to be a participant in UPI compared to Pix.
For Pix adoption: you can thank Covid for that. The Brazilian government said if you wanted to get free money from the government, you had to set up and use Pix.
US Financial Innovation: I'd say the hard thing here is that the government is extremely strict (lots of regulation) when you start looking like a bank. Lots of companies have tried to innovate here, but regulation makes it really hard to do. There's a lot of regulator capture going on.
In Brazil, the Central Bank overpowered the coordination problem. In the US, it may be the opposite: the government seems to have less power over the payment lobby, or at least less willingness to confront it directly.
https://www.pymnts.com/wp-content/uploads/2025/05/PYMNTS-Rea...
https://www.emerald.com/cemj/article/33/4/575/1248919/The-ri...
https://en.wikipedia.org/wiki/Instant_payment
Even then, not mentioning those who pretty much started / invented instant transfers still seems odd :) but no need to apologize haha, maybe I was a bit too abrasive.
I get why you prioritized to mention those though. The Chinese and Indians have leapfrogged us. No more fussy legacy (digital) cards, just scan a QR and go. Even illicit food stalls and street wanderers have accounts, when they wouldn't be able to get a 'real' bank account.
And the Chinese and Indians don't have to pay tribute to the Mastercard-Visa overlords either. Although Wero and the digital Euro might eventually change that for Europe too.
Every new entry would open up an opinion around “if you included that, why didn’t you include this?”
In such cases we’ll always up at Kevin Bacon.
Why doesn't the US private ecosystem manage to lower costs similarly? (Zelle comes to mind). It is interesting that this has happened in more highly regulated countries where the free market likely could not have come up with a cheaper solution on their own due to the same overbearing system that effectively forces adoption of this centralized solution.
Why would anybody willingly lower their own margin?
> It is interesting that this has happened in more highly regulated countries
It’s almost like regulation can sometimes achieve good outcomes in a not very competitive (due to network effects) market…
Propose some innovation here, I am interested, as someone adjacent to payments in financial services. Besides instant payments, the most we've seen is closed wallets (Venmo, Cash App) no longer needed with broad instant payment access from most demand deposit accounts and Buy Now Pay Later (BNPL) (and I argue BNPL is simply dressing revolving credit card debt up as innovation).
> Why doesn't the US private ecosystem manage to lower costs similarly? (Zelle comes to mind). It is interesting that this has happened in more highly regulated countries where the free market likely could not have come up with a cheaper solution on their own due to the same overbearing system that effectively forces adoption of this centralized solution.
Because it is a grift ("regulatory capture") [1] [2]. The "overbearing system" is the result of regulation to bring the consumer excess of cheap payments to an entire country's financial user population. Why does Jamie Dimon not like stablecoin yield [3]? Because JPMC makes almost $100B/year in interest income taking customer deposits and lending against them, which stablecoins would compete against by operating as a form of narrow bank, parking the underlying deposits in risk free US Treasuries [4].
As a US financial services consumer, it is hard for you to avoid the rake of the machine built to skim off of you as you hold onto fiat or move it, but the rest of the world can avoid being captured by it (as this piece demonstrates). Also, Europe can't regulate Stripe as easily as they can Adyen. You don't have to be the biggest or the greatest, it just has to work "good enough".
[1] https://www.thebignewsletter.com/p/the-109-billion-bank-hust...
[2] https://www.thebignewsletter.com/p/the-cantillon-effect-and-...
[3] https://www.politico.com/news/2026/05/29/dimon-jpmorgan-cryp...
[4] https://news.ycombinator.com/item?id=48331082
> Propose some innovation here, I am interested, as someone adjacent to payments in financial services.
Well, as a brazilian who is used to pix and has also faced the bad payment ux in american, I think a possible solution should be adding the missing Pix-like layer above the existing US rails.
One of the best part that makes Pix an incredible experience, It’s that the app almost doesn’t matter. I can use one bank, you can use another, a merchant can use a different provider, and it still works through the same basic language: QR code, Pix key, payment request, confirmation screen. I can even transport my "pix key" to another app/bank provider.
So maybe the US opportunity is a agnostic interoperability layer on top of FedNow/RTP/Zelle/bank APIs: universal aliases, QR payments, routing, fraud checks, receipts, and reconciliation. Making instant account-to-account payments feel universal before the government forces a universal standard.
I don't think consumers broadly should be the main goal first, the best initial path should be small-business, marketplaces, rent, etc.
If someone could own that neutral UX/addressing layer, that seems much closer to the useful part of Pix than just another closed wallet.
UPI for instance only works with a physical SIM. Your phone number on the account must match the physical SIM on the device. This indirectly relies on India's insistence on KYC (for accounts naturally) on issuance of physical SIMs. "Innovation" here would be a player who can support VOIP based phone numbers (maybe by complying with phone number KYC in some other way).
UPI also makes it quite confusing to deposit money to a particular account you own. You could share a specific identifier (string or qr) based on your account but the other party generally assumes they can send you money using your phone number, and sometimes follows through with that.
(I don't have a finance background.) There any multiple instances of a one-size fits all user experience decision which strikes me as a result of the centralization and removal of competition (in efforts to drive up adoption).
I don't disagree with most of your reply (thanks for the thoughtful citations too). But i wonder why the free market cannot lower cost/settlement time similarly.
The Indian government has mandated this for strong identity assurances. Your only hope at "innovation" (ie violating financial services regulators and laws) here is cash or something like Monero.
> UPI also makes it quite confusing to deposit money to a particular account you own. You could share a specific identifier (string or qr) based on your account but the other party generally assumes they can send you money using your phone number, and sometimes follows through with that.
I haven't used UPI recently, but I imagine this is a UX issue around aliases (phone numbers, email, and other human identifiers that associate to an underlying account).
TLDR People problems cannot be fixed with tech (in this context, regulatory requirements or alias UX, submit a public comment to the regulator if you can).
> I don't disagree with most of your reply (thanks for the thoughtful citations too). But i wonder why the free market cannot lower cost/settlement time similarly.
Because without regulation, it turns into Monopoly (the board game). Sometimes, competition can be encouraged, but in some cases (broad, shared infrastructure) it cannot and regulation must fill this gap to ensure the target outcome. This is why we regulate electric utilities similarly. Happy to help, I am very interested and curious on this topic.
Except for blockchain based ones
[1] https://www.coindesk.com/markets/2025/08/18/solana-briefly-h...
[2] https://corporate.visa.com/en/sites/visa-perspectives/securi...
[3] https://solana.com/learn/understanding-solana-transaction-fe...
As mentioned in one of my other comments, Pix in Brazil costs ~$10M/year. They process ~6-8 billion monthly transactions and roughly $6.7 trillion in payment volume a year [1]. That's roughly ~$0.0015/transaction based on the math in this comment, and we don't know what the ceiling is based on existing capacity (which would drive per transaction costs down further). Choose boring technology, when possible [2].
The innovation in this context is nuking the profits of Visa and Mastercard (their margins are ~45-50% [3] [4] [5]), replacing them with central bank instant payment systems run at cost. The reduction in their revenue is money back in the pockets of everyone paying unnecessarily to move value around. I highly recommend the book "The Innovator's Dilemma" on this topic [6].
[1] https://www.ebanx.com/en/insights/articles/five-years-on-pix...
[2] https://www.elibrary.imf.org/view/journals/002/2023/289/arti...
[3] https://finance.yahoo.com/markets/stocks/articles/visa-vs-ma...
[4] https://finance.yahoo.com/markets/stocks/articles/mastercard...
[5] https://aftabborka.substack.com/p/over-50-profit-margin-how-...
[6] https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma
Most recent indicator of peak Pix transaction volumes I could find [1] was 227M/day (=2700 TPS). You can see yourself that Solana does 130-140M/day consistently. Pix fees you quote are still triple Solana's.
Not to mention there is the entire decentralization aspect, which means the government does not control your money as with other blockchains.
[1] https://agenciabrasil.ebc.com.br/en/economia/noticia/2024-09...
[2] https://blockworks.com/analytics/solana/solana-onchain-activ...
On fraud management:
Pix: https://www.europeanpaymentscouncil.eu/news-insights/insight...
UPI: https://ieeexplore.ieee.org/document/11063926
EU max credit card transaction fees are 0.3%, in the US they can be up to 4%.
It just doesn't cost 4% of a transaction to handle the exchange of funds. Just wealth transfer to finance people and the upper class who take advantage of credit card perks.
I just checked and I get charged ~8% in fees on a 10 euro transaction on Stripe. Of course some of that is the low transaction amount (flat 0.30), but it's brutal for a small business like myself.
I guess the NA interchange is charging the card, rather than the EU? Could using a MOR reduce the fee structure?(And I don't think it applies to US merchants like you anyways)
https://ec.europa.eu/commission/presscorner/detail/en/ip_15_...
in US, the government is more protective of private monopolies due to lobbying
This naturally protects the artificial oligopoly of visa/mc/discover systems.
The moment you allow Merchants to charge cc fees (even 2-3%) and allow customer to choose low processing option (ACH/debit card/cash), the whole scheme falls apart and Visa/MC will slowly go bankrupt
This is only true in 4 states.
and most small/med businesses dont have clout to protest that, so they have to accept these terms in order to earn money
These clauses would be illegal in many states and countries these days, so they don’t.
The way I see it: you are either rich and don't care or you are poor and need to spend money that is not in your account (no judging I grew up poor and had to hide from debt collectors when I was a kid).
Means one payment from my savings account a month to cover all daily expenses.
If you know Taiwan’s history, and you understand China - there’s no surprise to be..
There’s a light board game called Timeline where you have stuff like this and there are so many surprises. Temporal stuff is hard to reason about and the game catches that. But with large numbers one loses intuition easily: NYC’s subway vs. all domestic and international US air travel is closer in total passengers than one would think. The median American did not fly last year.
Stuff like this. It’s just Gladwell-fodder but numerically fun.
Stripe is really good at making themselves look like a way bigger deal than they are.
Stripe has a Get started button. You click it, fill out a form, get your site approved in maybe a day, and start making money.
Adyen has a Talk to our team button. You close the tab and never think about it again until you’re making serious money.
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Edit: that is, of course, by design. Adyen doesn’t want small businesses. From the sibling comment:
> only able to support businesses currently transacting more than €5M per year
Mollie B.V. is licensed and registered as an electronic money institution with the Dutch Central Bank (relationship number: F0038). Mollie UK Ltd is licensed and registered with the Financial Conduct Authority as a payment institution in the UK (FRN: 977968).
Thank you very much for the comprehensive feedback.
I have taken a look at the information you have provided and unfortunately, at this time, Adyen is only able to support businesses currently transacting more than €5M per year or businesses which are currently supported by a Plugin built by Adyen. The reason for this is so that we are able to provide the right level of support and resources to our merchants at the right stage of their company growth.
If you would like to stay up to date with our payment offering please do sign up to our newsletter here.
In the interim, I want to ensure that you find the right provider, so I would like to direct you about payments. They are specialists in finding the most relevant payment solutions for all business models and I have no doubt they will offer you several great options.
I wish you the best of luck with your business moving forward, and hopefully we can reconnect in the future.
Kind Regards,
Ana Sales Specialist
Shedding low value users to others makes you stronger and them weaker.
Platforms like Stripe where anyone can sign up at any time drive up prices because the amount of low-profit companies needs to be offset by the companies making more. Great for small startups but a bad deal for major companies.
Stripe has also been criticised for forcing growing companies into enterprise plans the moment they hit certain growth numbers. That's one way to keep the business profitable, but it's not necessary if you only take on businesses that are already profitable enough dedicate a sales team onto.
Separately: Once you hit a certain threshold, you get an account rep and can ask for IC+ billing. This is sometimes better than the blended/sticker rate.
And furthermore, once you're really big enough, you can negotiate down Stripe's markup on the interchange. (As with any big enterprise contract).
https://docs.adyen.com/plugins#built-by-adyen
The lesson is, marketing to developers works. And the best way to market to them to by making their job easier.
From what I understand, Stripe's main value proposition was: "how can we make this gnarly, confusing and complicated system an easy-to-use service that does NOT require the end-user to internalise the entire payment provider state transition universe?" That is obviously a valuable service, but is it valuable enough to charge an ongoing rake of nearly 300 basis points?
ß: for some weird reason people still insisted that they absolutely must be able to pay with Paypal. 2+ years of fighting cross-corporate politics + KYB and still having to stomach insanely high commissions left a properly bad taste.
im amazed that stripe is able to handle small guys like me
But there are two projects (why one, if you can have two!?), one being Wero by different banks, the other being the Digital Euro by the European central bank. If either finds good adaption (Wero is rolling out slowly and for quite a bunch of banks every customer already got a Wero account automatically) this could move things around ...
In the UK it’s the system the law imposes on everyone.
https://www.contractsfinder.service.gov.uk/Notice/182de6c9-d...
https://www.payments.service.gov.uk/roadmap/
https://www.payments.service.gov.uk/performance/
HMRCs digital services in general are pretty good, but refunds not so much.
i guess i expected it to be more significant seeing that its the UK gov
This site regularly dunks on European tech as being subpar, but when an American company gets ditched for a European one, barely anyone can find nice words to say. You really reveal yourselves in times like this, I've got to admit.