Adyen, Stripe, Checkout, & Payment Acquirers
Former Director at Stripe
inpractise.com/articles/adyen-stripe-checkout-and-payemnt-acquirers
Former Director at Stripe
Interview Transcript
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If we can talk about the networks and acquiring in general, Adyen has developed its own acquiring capabilities in many different geographies and this seems to be in marked contrast with many other players, even some big players. My understand is that it gives Adyen an advantage in terms of authorization rates. Is that right and, in that case, why is this model so superior compared to others who basically rely on third parties to do some of their acquiring in some geographies?
I think, first and foremost, Adyen are mainly focused on large enterprise customers, so typically merchants who have multiple entities across the world and they want to optimize their authorization rates but also their payment costs. By having a global network of licenses and local acquiring capabilities, it allows their enterprise customers to process domestically in some markets, so maybe a Netflix could process with Adyen in Mexico domestically, which increases the authorization rate. In many countries, the issuing banks issue cards that are typically not set up for international or cross border payments.
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Was there a big difference with Adyen in terms of pricing?
I would say Checkout is commonly known as more aggressive because they want to grow volume. They are still a bit smaller but they were very aggressive in winning large deals and sometimes at zero margin or even negative margin. Finally, in payments, it's about winning a customer and then growing it over the lifetime value over contract, so typically Checkout was well known for being aggressive. I've been competing with them during my Stripe time in some deals but where it was maybe a walkway moment for Stripe, Checkout.com dropped their pants and was able to contract that very aggressively. That’s common behavior when there's a contender in the market who really wants to win the market share.
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