I think that's why this deal makes sense for Stripe
At the end of the day, it's a marketplace. The moat is volume/distribution, providers need to go to them to increase distribution. But their margins are tight, if they add too much margin it creates room for a second player. Since the margin is tight down to the payment processing, vertical integration with a payments processor prevents anyone from under-cutting them. With stripe getting into stablecoins that even cuts out the payment networks, so there's no juice left for competitors to squeeze.
This is manifest of my thesis re: Lightning, but the intermediate stablecoin step.
Lightning/stablecoin payments must first track with granular, machine-to-machine payments, in competitive low-margin businesses: #1419562
The problem with stablecoins is the upper bound on the stablecoins respective network effects, potentially KYC gates, reserve value etc. A Lightning competitor could make inroads against OpenRouter eventually but this acquisition makes that more distant and a much higher bar to clear.
I think that's why this deal makes sense for Stripe
At the end of the day, it's a marketplace. The moat is volume/distribution, providers need to go to them to increase distribution. But their margins are tight, if they add too much margin it creates room for a second player. Since the margin is tight down to the payment processing, vertical integration with a payments processor prevents anyone from under-cutting them. With stripe getting into stablecoins that even cuts out the payment networks, so there's no juice left for competitors to squeeze.
This is manifest of my thesis re: Lightning, but the intermediate stablecoin step.
Lightning/stablecoin payments must first track with granular, machine-to-machine payments, in competitive low-margin businesses: #1419562
The problem with stablecoins is the upper bound on the stablecoins respective network effects, potentially KYC gates, reserve value etc. A Lightning competitor could make inroads against OpenRouter eventually but this acquisition makes that more distant and a much higher bar to clear.