Money often costs too much – a look at Adyen (ADYEN:EN)

“Only two ways to make money in business: One is to bundle; the other is unbundle.” – Jim Barksdale

In the last post, I talked about the history of merchant acquiring and how the industry evolved. This post talks about the natural progression of the trend and the rise of the full stack acquirer.

A quick recap

The core jobs to be done for merchant acquiring is to enable a merchant to accept credit card payments. It started with one institution, the bank, and then unbundled into a plethora of entities. We now have a complicated ecosystem consisting of the card networks, issuing banks, acquiring banks, payment processors, and the alphabet soup of PSPs and MSP’s. Merchant acquiring transitioned to being a commodity business and scale became king. The need for scale caused the companies to grow via acquisition.Read More »

The history of merchant acquiring |Rise of the full stack acquirer

Ayden was the next pick for the Fintech PM guild’s next 10k session. As I dug through their financials, I realized that I wasn’t familiar with the history of the business they were in. Why does merchant acquiring exist as an industry? What is the history of this business, why does it exist the way it does today? Let us take a step back and take a walk through memory lane.
 
To understand any system it is useful to have a framework around the core jobs to be done in the system. In a payment system, money is the main asset exchanged between parties and there are three main jobs to be done.

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