[HN Gopher] Amazon-Stripe partnership
___________________________________________________________________
Amazon-Stripe partnership
Author : polyrand
Score : 230 points
Date : 2023-01-23 15:38 UTC (7 hours ago)
(HTM) web link (stripe.com)
(TXT) w3m dump (stripe.com)
| l8again wrote:
| Amazon has its own Uber, own fulfillment service down to
| monitoring tools that are built in house. So, not sure if it's a
| change in their "buy vs build" strategy or there's a more
| business play here to gain traction in the global markets?
| elforce002 wrote:
| Uber? Which division is that? Are you referring to Amazon
| fresh?
| __derek__ wrote:
| Amazon Flex. It's more like Uber Eats or DoorDash.
| devmor wrote:
| It's unrelated to either other than sharing the gig economy
| model. It's just another part of their Fulfillment
| Operations that relies on individuals with their own
| vehicles instead of a fleet.
| __derek__ wrote:
| I think that was clear from the context of the thread,
| where OP alluded to an in-house Uber, and I noted that
| the model was more similar to the local delivery services
| than to Uber per se.
|
| Anyway: Amazon Flex drivers actually did handle delivery
| for Amazon Restaurants, which was a direct competitor to
| Uber Eats, DoorDash, GrubHub, Caviar, etc.
| karmasimida wrote:
| It is a deal to keep Stripe lock on AWS. Same with Slack, where
| Amazon agrees to adopt Slack internally in exchange for Slack
| to use AWS for video conferencing.
|
| You got to give something in return. In this case I think both
| parties have something that the other side wants so why not?
| kotaKat wrote:
| Hell, Amazon bought a fairly not insignificant stake in a
| random no-name Korean handhelds company (Point Mobile). Their
| devices have been rolling out in FCs to replace Zebra
| handhelds left and right.
|
| Though... that was also because their main handheld vendor
| (Zebra) bought their own warehouse robotics company, so a bit
| of a signal to Zebra that they don't play well when their
| partners become competitors.
|
| https://renovotec.com/press/amazon-2nd-largest-
| shareholder-p...
| https://www.communicationstoday.co.in/koreas-point-mobile-
| ex...
| pwarner wrote:
| I suspect the economic environment may trigger reevaluations at
| Amazon and many other companies. I am not sure this is a bad
| thing? Fewer, but better choices may be OK?
| numair wrote:
| This seems like one of those "unlock greater efficiencies" type
| deals where both parties earn an effective 0% margin on each
| others' business. Both payment processing and cloud computing are
| very low margin when you're handling business for a savvy
| customer who knows how to reduce costs.
|
| From a data perspective, it would seem that there would be some
| major implications for this particular deal. If Stripe can gain a
| window into the purchasing habits and volumes of Amazon's massive
| customer base (not the actual items, but the size and frequency),
| it seems like it'd be a major boost to the depth and breadth of
| its machine learning models. For Amazon to give that sort of
| capability to another company -- which seems to have begun a few
| years back -- seems quite remarkable to me.
|
| On this same line of thought, I would assume that Apple has been
| working to bring more and more of its payment infrastructure in-
| house, as it's a major area of data leakage (regardless of
| whether the data is merely used to train fraud prevention models,
| or to do something more "interesting"). Maybe someone with actual
| knowledge on these matters will comment here...
| [deleted]
| aabhay wrote:
| In enterprise, it's often the case that your biggest customer
| effectively owns you. They get to dictate roadmaps, you're forced
| to spin up a special team just for them, and it becomes harder to
| justify your investment into long tail customers because this big
| golden monkey is on your back.
| snird wrote:
| If managed well, you can ride this "golden monkey" to heaven.
| So is the case of TSMC with Apple.
| ketzo wrote:
| To expand on this great example a little: TSMC is a really
| smart case, because the chip business is all about
| extraordinarily high up-front development costs and near-zero
| marginal costs.
|
| TSMC uses Apple as their first-and-best customer for their
| bleeding edge chips, using fat stacks of iPhone cash to push
| the limits of semiconductor technology.
|
| Then they can keep selling chips built on that process for a
| decade or more (to a _very_ long tail of other customers).
|
| Nobody would say that TSMC isn't dependent on Apple! They're
| certainly tied very tightly. But they've turned that
| dependency into just the _top_ of a very profitable funnel.
| ajb wrote:
| TSMC has many customers. If they lost Apple (and I don't see
| how) they could have to make some hard decisions but they
| would still be the world's top fab.
| ketzo wrote:
| Yeah, but that's looking at them _today_ , as the
| definitive #1 fab in the world.
|
| The path they took to get here was all about doubling down
| on Apple.
| throwawaysleep wrote:
| The long tail also requires support and that doesn't scale
| well. At one of my jobs, the rule is basically that any company
| under around 5K-10K ARR (it is arbitrary) doesn't get any real
| support and just gets strung along until they quit, as giving
| any developer time to their issues makes them unprofitable.
| bilbo0s wrote:
| There's just a lot of harsh facts about business out here in
| the real world. One of those facts is that some customers are
| just more trouble than they're worth. And "trouble" can be
| cost, or PR blowback, or your largest investor just doesn't
| trust the guy. Whatever it is, it's a reality you _probably_
| have to accept and deal with.
| [deleted]
| JCharante wrote:
| I can see how this makes sense, but at my job with thousands
| of devs each team has the independence to choose their own
| tech stack/tooling and what ends up happening is if 1 team
| finds a product they really like then it slowly starts to
| spread across the organization. Seems bad to ignore a team
| when they're trying out a new product.
| [deleted]
| ketzo wrote:
| I worked briefly at FedEx corporate, and they made a big deal
| about their policy that a customer could never account for more
| than 30% of total volume.
|
| Leadership often made it clear that Amazon was right at that
| limit, and wanted to send a lot _more_ volume, but FedEx wouldn
| 't let them, in order to maintain "independence."
|
| To your point: it didn't stop them from working to cater to
| Amazon's every whim, and it _did_ provide Amazon the incentive
| to build a (better and more cost-effective) fulfillment and
| shipping network themselves.
|
| I don't know what the "right" play was, and obviously the story
| is far from over. But FedEx always seemed to me like they chose
| the worst of both worlds.
| Laremere wrote:
| Amazon was likely to build out their own shipping network
| anyways. Their MO in all other spaces is to observe others
| doing it, then undercut by vertically integrating.
|
| Over expanding to fullfil a single large customer who isn't
| actually reliant on you is a good way to end up bankrupt.
| Seems like FedEx made the right move here.
| mritchie712 wrote:
| What % of FedEx revenue was from Amazon? Would have guessed
| it'd be much less than 30%.
| scottyah wrote:
| In 2018 (latest I could find with a quick search), it was
| 1.3%. FedEx said that no customer is more than 3% of their
| revenues.
| ketzo wrote:
| Wow, that's a _lot_ lower than I would have thought. I
| wonder if my memory is wrong? The "30% of volume" stat
| stands out in my head, though.
| ketzo wrote:
| I wasn't high-up enough to have that kind of number, sadly
| :D
|
| It's an interesting question, though -- I'm sure Amazon had
| a very favorable contract, so to your point, probably less
| than 30%.
| michaelt wrote:
| _> it's often the case that your biggest customer effectively
| owns you_
|
| I read an article back in ~2006 that made a similar point [1]
|
| If you're a lawnmower manufacturer and Wal-Mart comes to you
| and says they want to make you their main supplier of
| lawnmowers and they need X units per year (which will double
| your sales) that sounds like a great deal which will really
| grow your business - right?
|
| But once you've built a second factory to deal with all this
| extra sales volume and hired a bunch of extra workers, if Wal-
| Mart decide that $250-retail-price lawnmower is going to cost
| them $20 less next year you can't walk away, because you've got
| to pay the loans you took out to build this new factory.
|
| [1] https://www.fastcompany.com/54763/man-who-said-no-wal-mart
| acdha wrote:
| Here's an even older one about the Wal-Mart effect:
|
| https://www.fastcompany.com/47593/wal-mart-you-dont-know
|
| > The gallon jar reshaped Vlasic's pickle business: It chewed
| up the profit margin of the business with Wal-Mart, and of
| pickles generally. Procurement had to scramble to find enough
| pickles to fill the gallons, but the volume gave Vlasic
| strong sales numbers, strong growth numbers, and a powerful
| place in the world of pickles at Wal-Mart. Which accounted
| for 30% of Vlasic's business. But the company's profits from
| pickles had shriveled 25% or more, Young says-millions of
| dollars.
|
| > The gallon was hoisting Vlasic and hurting it at the same
| time.
|
| > Young remembers begging Wal-Mart for relief. "They said,
| 'No way,' " says Young. "We said we'll increase the
| price"-even $3.49 would have helped tremendously-"and they
| said, 'If you do that, all the other products of yours we
| buy, we'll stop buying.' It was a clear threat." Hunn recalls
| things a little differently, if just as ominously: "They
| said, 'We want the $2.97 gallon of pickles. If you don't do
| it, we'll see if someone else might.' I knew our competitors
| were saying to Wal-Mart, 'We'll do the $2.97 gallons if you
| give us your other business.' " Wal-Mart's business was so
| indispensable to Vlasic, and the gallon so central to the
| Wal-Mart relationship, that decisions about the future of the
| gallon were made at the CEO level.
|
| > Finally, Wal-Mart let Vlasic up for air. "The Wal-Mart
| guy's response was classic," Young recalls. "He said, 'Well,
| we've done to pickles what we did to orange juice. We've
| killed it. We can back off.' " Vlasic got to take it down to
| just over half a gallon of pickles, for $2.79. Not long after
| that, in January 2001, Vlasic filed for bankruptcy-although
| the gallon jar of pickles, everyone agrees, wasn't a critical
| factor.
| ecommerceguy wrote:
| So is Amazon Pay just arbitraging Stripe's standard 2.9%?
|
| https://pay.amazon.com/
| morpheuskafka wrote:
| I don't understand how Amazon needs or can use Stripe in the US
| (I can see how it would be useful for the emerging markets they
| were previously using). As the largest merchant in the country,
| don't they already have direct negotiations with banks and
| compete for the lowest possible fees?
| hopefulengineer wrote:
| [dead]
| bethling wrote:
| From my time with Amazon's payments team, they do. However they
| do like not depending on any one particular provider, and being
| able to spread the payments to different providers does give
| them leverage to negotiate rates from a stronger position.
| jaywalk wrote:
| I bet fraud detection is a big part of it, if not the only part
| of it.
| capableweb wrote:
| Judging by this release, Amazon seems to acknowledge they
| cannot handle payments as well as Stripe (makes sense,
| companies focusing on one thing usually does that thing better
| than a company focusing on 100s of different things). Also,
| isn't the saying something like "outsource anything that isn't
| your core competence?" and I'm guessing Amazon is doing just
| that here.
|
| This statement is what lead me to have the above perspective:
|
| > "Stripe has been a trusted partner, helping accelerate our
| business at every turn," said Max Bardon, vice president of
| payments, Amazon. "In particular, we value Stripe's
| reliability. Even during peak days like Prime Day, Black
| Friday, and Cyber Monday, Stripe delivers industry-leading
| uptime. We appreciate Stripe's relentless commitment to putting
| users first."
|
| Translated: Stripe has better reliability than the systems
| we've setup ourselves, especially during peak days.
| ceejayoz wrote:
| I don't read that as "Stripe has better reliability", just
| "theirs is as good as ours, don't worry". Amazon doesn't tend
| to have trouble with payments on Prime Day or Black Friday;
| they've got a fairly huge benefit of not having to charge in
| realtime, as they typically charge at the time of shipping.
|
| I suspect the bigger appeal to Stripe is all the
| international alternative payment methods that Amazon doesn't
| have to worry about with Stripe handling it.
| devmor wrote:
| Agreements (and pull) with card issuers and banks is
| definitely a large part of the value in payment processors.
| You may be right.
| lnxg33k1 wrote:
| I wish everyone would switch to Stripe, I hate to be forced to
| keep an account on PayPal in order to deal with some partners
| because PayPal can't just get a credit card and let me pay
| without trying to be a social network, when some partner send me
| stripe, it's so easy and straightforward without any fuss
| kennywinker wrote:
| Monopolies don't usually work out well for the end user, so i
| really hope everyone _doesn't_ switch to stripe.
| lnxg33k1 wrote:
| Yeah I agree with you, let me rephrase, I hope everyone I
| deal with switches to stripe then :D
| Etheryte wrote:
| As a user, Stripe is super convenient. As a provider, Stripe is
| often a nightmare with no explanation provided terminations,
| nonexistent support and roboemails.
| d4rken wrote:
| Eeriely similar to how Google treats Android developers...
| lnxg33k1 wrote:
| Well, as a user I will get as much as convenience I can get
| ^^
|
| But yeah I understand that today is a bit of the culture of
| tech companies to be unreliable, was just thinking about it
| today, I had few updates on iPhone apps, and all the apps
| didn't have any explanation, just trying to be funny about
| having fixed bugs, but no details, software engineering is a
| bit of a joke nowadays, and I think it's not just software
| engineering but it's just that companies are a joke, no
| explanation to customers, not explanation to users, no
| support etc.
| joshmn wrote:
| My primary email address is somehow flagged globally on
| Stripe, so I have to use an alternative to get any payment to
| go through regardless of what card I use: whatever@domain.com
| causes the payment to fail, but whatever+1@domain.com works.
| It's sad but hilarious but sad.
| lnxg33k1 wrote:
| I guess you booked it with a guest at the start
| juujian wrote:
| If you have the authority, why not create
| whatever.stripe@domain.com? Looks official, like it's done
| on purpose.
| smca wrote:
| Just dinged an email to the address listed in your bio.
| Etheryte wrote:
| [flagged]
| lnxg33k1 wrote:
| [flagged]
| college_physics wrote:
| Do these "partnerships" ever specify more binding conditions
| (exclusivity in some market, a minimum commitment of business
| over some period of time etc). Obviously the public announcements
| are a great opportunity to co-promote respective entities, but
| how much do these actually constrain business options?
| sfmike wrote:
| fast forward to future post title "I can't checkout anymore on
| Amazon because I'm banned on stripe from black box algorithms and
| I don't know why"
| vishnugupta wrote:
| 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...
| ROFISH wrote:
| Just noting from my experience that many e-commerce platforms
| like Shopify have started charging an extra "third-party
| payment fee" for not using their own payment platform so all
| the savings gained from lower fees would've been ate up by the
| other platform.
|
| Being aggressive in banks is only half the equation. You also
| need to be aggressive against the e-commerce platform's own
| greediness.
| MuffinFlavored wrote:
| > 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?
| ericmay wrote:
| > 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.
| MuffinFlavored wrote:
| > 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)?
| ericmay wrote:
| 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%
| MuffinFlavored wrote:
| Where do companies like Apple park their cash short term?
| Obviously not 10Y bonds most likely?
| ericmay wrote:
| Short-term yea treasuries and things like that.
| MuffinFlavored wrote:
| How do you get notified of HN comment replies, or do you
| also incessantly check your profile comments like I do?
| ericmay wrote:
| I check them incessantly depending on how the day is
| going :)
| ethbr0 wrote:
| 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
| MuffinFlavored wrote:
| > 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?
| DueDilligence wrote:
| "good at few things".
|
| .. track history proves otherwise.
| firstSpeaker wrote:
| Elaborate?
| morpheuskafka wrote:
| I'm not surprised that they are giving up on Amazon Pay, as
| that never seemed to get much traction or customer recognition.
|
| However, I am very surprised that they are abandoning their own
| first-party payments to Stripe. Don't you all already have the
| very best rates possible, directly negotiated by every bank? In
| other countries Amazon has even threatened to stop accepting
| cards because they couldn't negotiate the fees they wanted, and
| they are about the only merchant big enough to dare doing that.
|
| I'm sure they won't be paying Stripe the standard 2.9%, but
| still--what value does Amazon get out of this? Stripe is
| supposed to make payments easy from both a coding and business
| perspective for developers. Everything Stripe does, from card
| acceptance to fraud handling to UX to ACH payouts Amazon
| already has working at large scale.
| ghostingbanana wrote:
| > I'm sure they won't be paying Stripe the standard 2.9%, but
| still--what value does Amazon get out of this?
|
| These deals are priced on a cost-plus basis. Amazon might pay
| Stripe the cost of the underlying network fee plus .1% or
| half of cent.
|
| Stripe negotiates fees with leverage.
|
| note Stripe is publicly commuting to AWS in this
| announcement. It's likely that the exchange here is "we use
| you for payments and you commit to $Xbn in AWS spend."
|
| Similar to MSFT and OpenAI. We give you billions, you spend
| it right back on Azure.
| di456 wrote:
| > Stripe negotiates fees with leverage.
|
| Same with Amazon's leverage for vendor negotiation. They
| will go for stock warrants if it's a big enough deal and
| they have the right leverage. More upside that way and it
| creates a competitive moat.
|
| No idea if that's the case here though.
| cstejerean wrote:
| It's not clear from the announcement that they are giving up
| all first-party payments to Stripe.
|
| > Stripe will become a strategic payments partner for Amazon
| in the US, Europe, and Canada, processing a significant
| portion of Amazon's total payments volume across its
| businesses, including Prime, Audible, Kindle, Amazon Pay, Buy
| With Prime, and more.
|
| That makes it sound like some things (and certainly a
| significant percentage of the total) will be processed by
| Stripe, but not all spend. For example it doesn't seem like
| normal purchases on amazon.com would actually be processed by
| Stripe at this time.
| ChrisNorstrom wrote:
| _joke_ So how long until an Amazon representative complains on
| HNews about Stripe locking them out of their account and not
| telling them why?
|
| No seriously, I used to use Amazon Pay for years long ago when
| it first became available for woocommerce powered stores and I
| specifically stopped because I had to manually download and go
| through all my weekly reports and add up the fees I was paying
| for my business's taxes. As advanced as Amazon can be sometimes
| they are very dinosaur like when it comes to financial reports
| or taxes. It took decades for them to collect taxes from
| sellers. Took years for them to finally catch a couple that
| were scamming millions of dollars in returns out of sellers. I
| stopped bothering with any Amazon products because of the years
| of glitches, gotchas, lack of reports, lack of understanding
| user intent or use cases. And the thing is, Amazon Pay was
| great, I had a lot of customers that used it and prefered to
| pay that way.
| ShinTakuya wrote:
| Payments are hard, it's no coincidence that only a handful of
| tech companies do it well despite it being one of the more
| lucrative areas to do business in.
|
| Makes sense for Amazon to work with a market leader in this
| case rather than spend years playing catch up. Perhaps in the
| long run they'll acquire Stripe instead of simply partnering.
| qqtt wrote:
| It's pretty wild that Amazon is playing "catch up" at all.
| Amazon Pay was launched years before Stripe was even
| founded. Not to mention Amazon has been at the forefront of
| online payments since the 90s (Amazon itself was founded 4
| years before PayPal).
|
| There is some dogma that Amazon is peerless at building
| platforms and developing APIs, but this is a pretty big
| failure to capture the market given a huge head start.
| johnmaguire wrote:
| It's odd too because I recently saw this headline across my
| screen: Amazon hopes to increase checkout dominance via Buy
| with Prime expansion[0].
|
| [0] https://www.insiderintelligence.com/content/amazon-hopes-
| inc...
| remus wrote:
| > 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.
|
| This does seem very un-amazon from my outside perspective. In
| the past I've always had the impression that amazon are very
| happy to shovel money in to an area if they think it'll improve
| their margin and/or protect them from reliance on third
| parties. This seems exactly the opposite of that! Stripe must
| be spending a shit load of cash with AWS and offering amazon a
| pretty attractive rate for processing.
|
| I wonder if GCP has been fishing for stripe's business?
| acdha wrote:
| > I wonder if GCP has been fishing for stripe's business?
|
| That would make a lot of sense: they mention increasing their
| use of AWS and this is something that neither Google nor
| Microsoft could really match as the carrot for an exclusive
| commitment. Stripe is already pretty big but being able to
| say Amazon trusts them with payments is a pretty strong sales
| pitch.
| tempsy wrote:
| this just sounds like stripe will handle some of the payment
| processing volume for digital purchases
|
| doesn't sound like it's a replacement for the amazon pay button
| at all
| [deleted]
| pwarner wrote:
| I have no inside knowledge, but maybe rather than stop
| experimenting, they'll just declare some failures rather than
| keeping mediocre offerings alive. I have no first hand
| knowledge that Amazon payments was good or bad, but I also took
| note of Amazon partnering with Slack. That seemed as an ack
| that Chime's chat was never going to be good as Slack, might as
| well join them.
|
| To me it's big step up in maturity for Amazon to find the right
| areas to focus on, and get the right partnerships.
| strgcmc wrote:
| As another former Amazonian (but not near payments stuff by any
| means), judging from the outside, this doesn't sound like it
| equates to the death of Amazon Payments at all.
|
| The PR statements are very carefully worded to say, strategic
| partner that will be "processing a significant portion of
| Amazon's total payments volume." If significant portion was
| going to mean anywhere near 100%, I'm sure Stripe would have
| shouted that fact from the rooftops even louder (what a huge
| win that would be!).
|
| For my money, this really just reads like mostly a quid-pro-quo
| deal, you give me X% of payments volume, I'll give you Y level
| of commitment to AWS. With no insider knowledge of any kind, I
| would wildly speculate that "significant portion" could mean a
| value of X as low as 5-10%.
| argc wrote:
| Amazon is ok with internal competition, so this could just be
| a way of keeping options open while locking in a large
| customer. Maybe Stripe is better in some markets or verticals
| but Amazon will still rely on Amazon Payments for others.
| Long term there could still be a convergence on one or the
| other. (Amazonian but this is complete guesswork)
| jacurtis wrote:
| This announcement to me is possible the strongest argument
| against building your own payments platform that I've ever
| seen.
|
| Next to Walmart, Amazon is probably the largest single credit
| card payment recipient on planet earth right now, at least in
| volume of transactions. If Amazon went through the work as you
| mentioned, to build our their own payments solution for several
| years and eventually abandoned it in favor of using "off-the-
| shelf" Stripe. Now, I do recognize that I am sure Stripe is
| somewhat customized for Amazon's use case and they obviously
| aren't charging Amazon anywhere near 2.9% + 30C/ per
| transaction. So its a little different than the Stripe we use,
| but its still a fascinating argument in the "Buy vs Build"
| debate to favor buying over building.
|
| I find it also interesting coming from Amazon. Since much of
| the work I am doing right now is moving internally-built
| technical systems to AWS' managed and built solutions. So I am
| deep in the transition of moving built technical systems to a
| buy model from AWS across many different technologies. To see
| Amazon dishing off their payments to another company instead of
| maintaining it in house just feels like the ultimate "circle of
| life" or rather, "circle of specialization".
|
| Tech is getting so complicated now that its becoming harder and
| harder to justify in-house solutions to problems. It seems like
| anymore we are moving everything to be managed by a different
| provider with companies focusing on one or two things they are
| amazing at and everything else being passed to another company
| who specializes at that other thing.
| mmaunder wrote:
| Why? Amazon is known for vertical integration. And AWS has so
| many big customers that losing Stripe shouldn't move the needle.
| Is Amazon playing possum to acquire them, and Stripe is playing
| along?
| xfour wrote:
| Wait, obviously Amazon has their own checkout software. Is this a
| name recognition play to have AWS come with Stripe batteries
| included?
| __derek__ wrote:
| It seems like payments is traveling the inverse of the
| shipping/delivery route: first build in-house, then add on
| other fulfillment partners that are able to handle certain
| payments better.
| agloeregrets wrote:
| My guess is that Stripe is way better at international payments
| and by moving US to stripe they can have a single payment
| processor worldwide.
| julianlam wrote:
| They do, but Stripe may have other advantages that Amazon's
| home-grown billing does not... fraud detection comes to mind.
| Hermitian909 wrote:
| Stripe's superior fraud detection is an open secret in
| FinTech. There are apparently a lot of large companies with
| their own payment rails that route riskier looking payments
| (e.g. a new account who you haven't yet settled a transaction
| with) through Stripe for this reason.
| habitue wrote:
| which probably makes stripe's job even harder, because now
| there's adverse selection
| BurningFrog wrote:
| You can charge extra per detected fraud.
| mschuster91 wrote:
| If there is one company _besides_ Stripe that I 'd expect to
| have high quality fraud detection, I'd name Amazon actually,
| maybe add PayPal. The largest online retailer in all major
| markets sans China and Russia by far, you don't get to that
| position if you're lacking in the anti-fraud department.
|
| (Alternatively, one might say Amazon simply is large enough
| to eat up the cost of fraud...)
| ceejayoz wrote:
| If Amazon has good fraud detection, they should consider
| using it on sellers.
| marban wrote:
| ~2025: Stripe becomes Amazon SBS -- Simple Billing Service
| Bhilai wrote:
| Stripe internal valuation is around $65B. I think its unlikely
| Amazon is going to spend that much to acquire Stripe.
| fisherjeff wrote:
| $65B for payment processing is a lot. $65B to be magically
| inserted into the checkout flow of like every small to medium
| independent online retailer out there (exaggeration, I know)
| starts to look like a much better deal.
| joshstrange wrote:
| I... I... I don't hate this idea...
|
| I'm all-in on AWS and I've drank the kool-aid so I'm obviously
| biased but I've quite enjoyed living in the AWS walled garden.
| Stripe is one of 1-2 external services I use, bringing that "in
| house" would be nice, especially if CDK had full support for
| creating merchants/etc.
| mritchie712 wrote:
| What do you think would improve by Stripe being in AWS? As a
| Stripe customer, I like the way Portal[0] allows me to
| outsource payments (almost) entirely. I don't see the
| advantage (relative to the cost) of building it into my
| product.
|
| 0 - https://stripe.com/blog/billing-customer-portal
| enahs-sf wrote:
| Hopefully getting Stripe's designers to take a crack at the
| AWS UI would be nice.
| devmor wrote:
| Resolving support issues is the only one I can think of. I
| have seen a non-trivial amount of Stripe integrators have
| to resort to social media, HN or reddit to get any real
| response to issues like Stripe holding their balance
| hostage.
| lechacker wrote:
| Amazon has around USD 58 billion in cash and short term
| investments according to their last quarterly report. Stripe's
| last "valuation" in 2021 was at USD 96 billion so today, based
| on the market cap behavior of similar companies like Square or
| PayPal, that number should be at USD 30-40 billion today.
|
| It would be a large acquisition but not unheard of.
| 7ewis wrote:
| Would it really benefit Amazon though? If Stripe are already
| putting hundreds of millions through AWS, they'd essentially
| be losing a large customer by buying them.
| ignoramous wrote:
| You kid, but AWS had 2 year head-start on Stripe [0] and here
| we are...
|
| [0] https://archive.is/R7m9s /
| https://www.allthingsdistributed.com/2007/08/the_amazon_flex...
| mardifoufs wrote:
| What went wrong? Why didn't it take off, and why doesn't
| amazon have a similar offering on AWS? They have such a wide
| variety of products there that I'm surprised they didn't try
| again after 2007.
| kijiki wrote:
| I used it at the time.
|
| It was very ambitious, supporting a scripting language for
| what are now called smart contracts, and very complex
| payment schemes.
|
| It was also a huge pain in the ass to integrate, and the
| user payment flow was wonky, with a redirect to multiple
| amazon branded pages to log in to amazon, then redirect
| back to finish the transaction.
|
| I've not used stripe, but people who have tell me it is
| super easy to integrate.
| jahewson wrote:
| Amazon Simple Transactional Revenue Internet Payment Exchange.
| marcosdumay wrote:
| The acronym is too long and distinctive. Amazon doesn't do
| that.
|
| Except for this, it's great.
| ojkelly wrote:
| AWS Systems Manager Payment Manager
| banana_giraffe wrote:
| Amazon Simple Salary Swapping Service, or S4
| napolux wrote:
| And the logo will be a blue square with the $ sign in it,
| rotated 45 degrees
| marban wrote:
| A pyramid with Jeff's eye embossed on it.
| fragmede wrote:
| The marketing firm will charge $10,000 for each degree.
| hbn wrote:
| And note that they actually rotated it 315-degrees in the
| other direction
| capableweb wrote:
| > We couldn't run without AWS [...] said David Singleton, chief
| technology officer of Stripe
|
| I know this is a PR piece, but shouldn't a CTO know better? What
| could they possible not have achieved if they weren't using AWS?
| Literally every feature of AWS exists somewhere else. Maybe not
| all of the same features in the same place, but to say they
| couldn't run Stripe without AWS strikes me a bit silly.
| sofixa wrote:
| > Literally every feature of AWS exists somewhere else. Maybe
| not all of the same features in the same place, but to say they
| couldn't run Stripe without AWS strikes me a bit silly.
|
| At AWS' scale, fully managed, when Stripe was founded (2010)?
| Bullshit. Back then, and even up until ~2013-2015 the state of
| the art was either VPS, colo where you DIY everything from the
| nuts and bolts to databases, Heroku/Google App Engine where you
| have little control, hosted VMware (utter shit), and slowly,
| AWS.
|
| You're making the classic Dropbox mistake. Today yes, the
| majority of what you can do on AWS can be done elsewhere
| (mostly Azure and GCP, depending on specific features needed
| maybe one of the smaller ones like OCI).
| jaywalk wrote:
| You said it yourself, it's a PR piece. After signing a massive
| deal with Amazon, you want the CTO to say "yeah, our software
| could easily run on Azure or GCP, but Amazon just gave us a
| massive deal so we're sticking with AWS."
|
| Don't take it literally.
| capableweb wrote:
| Even so, saying something like "We really like AWS so that's
| what we're doubling down on" (but with more PR/flowery
| language) rather than "Stripe would be impossible without
| AWS" would have been a more balanced statement while still a
| giving them praise.
| chuckwnelson wrote:
| I just assumed its hyperbole. In the same way I would say "I
| couldn't live without Diet Coke."
| spiderice wrote:
| Meh, I feel like you're taking a common expression and reading
| it too literally.
|
| "I couldn't have made it to the top of the mountain without
| these specific hiking boots" doesn't mean it was literally
| impossible without that exact brand of hiking boots. It means
| they like the boots, it made the experience better for them,
| and they think the hiking boots are better than comparable
| ones.
|
| I don't think the CTO is claiming that Stripe is solving a
| problem that would be impossible to solve without AWS. He's
| saying we wouldn't be as well positioned today if we had to
| solve the problems that AWS solves ourselves, or by relying on
| their not-quite-as-good competitors.
| devmunchies wrote:
| A little hyperbolic marketing for AWS in exchange for a fat
| deal. This deal will probably help Stripe further penetrate
| fortune 500 companies on case study alone.
| napolux wrote:
| Good. Guess why PayPal after leaving eBay wasn't moving on
| Amazon.
|
| Maybe they were doing enough money already :)
| rabuse wrote:
| Still waiting for the Apple Pay partnership.
| captn3m0 wrote:
| Interesting how India is not in the list of countries where
| Amazon is relying on Stripe.
|
| Amazon is doing its own fintech play here, with heavy investments
| into Amazon Pay, Amazon Credit cards, and more. None of that
| seems to be driven via Stripe, but other local partners and banks
| instead.
| Brystephor wrote:
| India has special regulations for payments which blocks a lot
| of payment processors from doing business there. Adyen and
| Braintree don't process payments there. Stripe probably doesn't
| also.
| captn3m0 wrote:
| Stripe was among the first payment processors to get approval
| for a Payment Aggregator license, which was just introduced.
|
| https://business-standard.com/article-amp/finance/rbi-
| clears...
| chimeracoder wrote:
| > India has special regulations for payments which blocks a
| lot of payment processors from doing business there. Adyen
| and Braintree don't process payments there. Stripe probably
| doesn't also.
|
| Stripe processes payments in India, and has for over five
| years:
|
| https://stripe.com/global
| sidcool wrote:
| Payments infrastructure in India is years ahead of those in the
| US or Europe. Amazon uses it's own Amazon Pay here in India.
| singhambesh wrote:
| Not Europe. I pay with my Apple watch everywhere. UPI is good
| for merchants due to no MDR (for now) and no capex
| requirement in terms of devices etc. From a customer POV, UPI
| hardly adds value (ApplePay / GPay / Contact-less works much
| better).
| chimeracoder wrote:
| > Not Europe. I pay with my Apple watch everywhere.
|
| Maybe everywhere that accepts Apple Pay, but given how low
| credit card penetration is in Europe overall (relatively),
| it's almost impossible to avoid falling back on cash at
| some points unless you're very limited in the places you
| patronize.
|
| UPI adoption is _massive_ (and not just in India). The
| ubiquity of it is a huge benefit to the consumer - simply
| the knowledge that you can reliably depend on using it even
| for a random street vendor is a huge paradigm shift,
| compared to the status quo of knowing that it might be an
| option, or might not, depending on who you 're talking to.
| singhambesh wrote:
| Debit card -> Add to ApplePay/ GPay -> Touch the POS ->
| Done. UPI is good for 3rd word as a) most merchants cant
| afford (wont get a POS) b) need working capital daily (as
| working capital loans are not available or merchants
| don't have a bank account).
|
| From a customer POV, UPI with it's lower success rates,
| no chargeback/dispute mechanism and with higher latency
| (take out your phone -> unlock -> open app -> click scan
| QR button -> enter pass -> Look at loader for 3-10 sec)
| is worse than debit card set up on phone / watch.
| bjacobt wrote:
| Can you share some examples of what makes payments in India
| ahead of US or Europe?
| sofixa wrote:
| India's UPI allows for free instant transfers with
| email/phone number, regardless of amount. Business have
| started using it for payments, that's how good it is. In
| the Eurozone there's SEPA Instant which is close but
| requires a bank account number. In the US... checks in the
| mail? Or third party middlemen for the fun of it.
| chimeracoder wrote:
| > In the Eurozone there's SEPA Instant which is close but
| requires a bank account number. In the US... checks in
| the mail? Or third party middlemen for the fun of it.
|
| SEPA's equivalent in the US is ACH, and in recent years
| ACH (which is a much older system) has mostly closed the
| gap with SEPA. Also, SEPA Instant exists, but not all
| banks are guaranteed to support it - as of even just a
| few months ago, many popular banks don't support it,
| which means that using SEPA reduces to ACH (in terms of
| payout settlement and information flow at POS).
|
| Europe also has additional country-specific methods, so
| you can lean on (e.g.) iDEAL or or BACS if you know
| you're primarily dealing with Dutch or British customers,
| but that's not going to help you if you need seamless use
| across Europe.
|
| ACH just never took off culturally in the US as a popular
| payment scheme - in part because of the easy availability
| of credit cards, which are usually free to the consumer
| and provide additional protections (such as chargebacks)
| that both ACH and SEPA lack. By contrast, credit card
| adoption is historically much lower in Europe (especially
| when segmented by country), so it makes sense that SEPA,
| for all its drawbacks, would catch on as a more popular
| method.
|
| Of course, all of these pale in comparison to India's
| payment schemes, which are light-years ahead.
| devmor wrote:
| ACH also never took off in the US because
|
| A) You have to initiate a transfer at your bank, there's
| no way to use ACH independently as a consumer without a
| commerce setup or relying on a 3rd party (like Zelle).
|
| B) There's no confirmation step. If someone has your
| Account Number and Routing Number and does have a
| commerce setup, they can debit your account at any time.
| chimeracoder wrote:
| > You have to initiate a transfer at your bank, there's
| no way to use ACH independently as a consumer
|
| That's actually not true - it appears that way because in
| practice ACH is only used in corner cases in the US, but
| it is absolutely possible.
|
| > There's no confirmation step. If someone has your
| Account Number and Routing Number and does have a
| commerce setup, they can debit your account at any time.
|
| ...I have bad news for you about what the SEPA standards
| require!
| JCharante wrote:
| For smaller quantities (sub $1000) USA's Zelle allows for
| free instant transfers 24/7 with email/phone number. It
| does have daily limits but if a business was dealing with
| $15k MRR or $30k MRR then surely they would just buy a
| POS. So if you wanted to act as a merchant selling $200
| of groceries out of your garage in your neighborhood in
| the US then you could feasibly do it using Zelle.
| Basically all banks support it. You might say that
| requiring a bank account is a barrier but they're
| literally free at many banks. You can even create a bank
| account completely online with companies like Charles
| Schwab.
| FpUser wrote:
| Friendship without the limits ...
| bluelightning2k wrote:
| Amazon must have seriously considered not only bypassing a
| company like Stripe but also competing with them.
|
| I'm sure Amazon Pay or AWS Payments or whatever must have got
| some serious consideration. Not to mention every bank offering a
| direct relationship.
| Brystephor wrote:
| I had a short period where I worked in Amazon payments. Max
| Bardon was the L10 or whatever above me.
|
| Amazon likes to diversify their payment processors. They don't
| have one payment processor for one region because it's an
| availability issue for them. Cost of payments is big. So this is
| likely some agreement to help Amazon reduce their cost of
| payments, by essentially redirecting costs to the AWS side of
| things. India likely isn't being processed because India has
| regulations that most other countries do not. Adyen, Braintree,
| and maybe not even Stripe can be payment processors there (if
| they are, they're likely just a proxy for another processor).
| alsodumb wrote:
| It's also party because India has a robust ecosystem of local
| companies that handle payments, including real-time payment
| methods such as UPI that are specific to the country and these
| are already well integrated into Amazon.in
|
| Honestly the ubiquity of UPI and the rate of it's adaptation in
| India always surprises me. I hear stories of how small, often
| illiterate vendors selling tea for 10 cents on the streets
| would insist on getting their payment through UPI and not cash
| because it's more seamless.
|
| UPI handles about 200 million transactions a day in India. I
| think Visa does like 150 million on their global network?
|
| https://en.m.wikipedia.org/wiki/Unified_Payments_Interface
| chimeracoder wrote:
| > It's also party because India has a robust ecosystem of
| local companies that handle payments, including real-time
| payment methods such as UPI that are specific to the country
| and these are already well integrated into Amazon.in
|
| Just to add, UPI is actually no longer limited to India.
| Several other countries either are currently using it or have
| contractually agreed to and are in the process of integrating
| it and rolling it out.
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