“Both Stripe and PayPal make about the same volume of payments, but Stripe has about a fifth of the net revenue,” Hadick said. “From a financial perspective, this is obviously beneficial and helps them connect their merchant processing business, which is at risk of becoming commoditized, with a large subset of PayPal’s more than 400 million accounts.”
Hadick also warned that executing a deal of that size would be difficult. “Integrating mergers and acquisitions into something this size is incredibly difficult,” he said.
Beyond commercial payments
Eric Queathem, CEO of Velocity, said the acquisition would also give Stripe access to one of the largest consumer payments ecosystems in the world, providing a platform to expand beyond commercial payments.
The proposed acquisition would also determine who controls the consumer side of the blockchain-based payment infrastructure, complementing Stripe’s existing merchant network and stablecoin capabilities.
Several executives said the competitive focus has shifted from proving that blockchain technology works to controlling distribution.
Pankaj Bengani, founder and CEO of Meld, agreed with Larbi that the race is on.
“The race has gone from proving the technology works to owning the distribution,” Bengani said, adding that “stablecoins have gone from an experiment to a core payments infrastructure.”
Citi analysts reached a similar conclusion in a research note, writing that the stablecoin competition has become “a default-setting game,” with the scale falling on whichever stablecoin becomes the default in the largest merchant, consumer wallet, or autonomous transaction base, rather than the issuer with the best technology.
