Comment by mbesto

Nope.

> Issuing side (the side that "issues" the cards) is usually the one that people describe as "all of the value"

In theory you could argue "all of the value" may be there, but that is locked up across issuing banks and the credit card companies themselves. You basically cannot compete there unless you have some novel way of creating a credit card that isn't Visa, MC or AMEX. There is also a reason banks haven't consolidated on the issuing side because it's an uninteresting business for them, otherwise they would. Hence the credit card side is all about volume and hence all of the value for software providers is on the acquiring side.

> The merchant's / acquiring side has significantly tighter margins and usually needs substantial volume before it can become an interesting business.

You're myopically looking at one part of the acquiring side. Controlling the merchant relationship means theoretically unlimited upside, versus the issuing side that is usually capped by regulated interchange fees or market pressure. There are thousands of providers that sit on top of Stripe (and other similar providers) and charge 4%~7% and capture the residuals (which is a higher BPS than Stripe itself), hence this is where the value is. Stripe et al compete on volume because they themselves get volume discounts on the underlying providers (e.g. if you have a high enough volume Stripe will charge you less than the rack rate...just like everyone else that provides a software gateway). I would argue the economic value created by providers sitting on top of Stripe is greater than the value Stripe generates for themselves.

> My inner child lights up at the thought of payment rails.

Payment rails for Visa/MC/AMEX is very different than your experience with moving money at banks in Kenya/Russia. I've actually seen the tech that runs the rails for payments in the US. If anyone thinks the Paypal dev experience is bad, wait until you see this shit.