This is why it's hard to build a profitable payment processing business.
In 2022: processed €767.5B. Net revenue €1.3B. EBITDA of €728.3M. EBIDTA margin of 55% - similar to that of eg Visa or MasterCard.
The difference? Cost basis.
Adyen employs about half the people as Stripe, mostly in Europe (their HQ is in Amsterdam). It’s not just fewer people, but, most likely, lower cost per employee (European HQ vs US HQ, and the wage difference between the two).
They offer lower rates, collect less net revenue, and have a far bigger profit than Stripe.
Source on Adyen’s numbers: their annual report https://www.adyen.com/press-and-media/adyen-publishes-h2-202...
Our rates were also significantly better with Stripe in the US, though we were doing into the billions in annual transactions, which likely has a lot to do with it (we wouldn't have moved all of those billions to Adyen right away).
Which is all to say, much of what you say is true, but it's not like Adyen is a clear winner.
Taking on enough liability to wipe out the entire company in just a few days in the worst case scenario just to make a fraction of a cent of profits.
PayPal key statistics
PayPal generated $27.5 billion revenue in 2022, an 8.6% increase year-on-year
PayPal net profit declined in 2022, from $4.1 billion in 2021 to $2.4 billion
Over 22.3 billion transactions were completed in 2022 on PayPal, accounting for $1.36 trillion in transaction volume 435 million users and merchants use PayPal
The rate is the area to give the least concern to, but novices in the field always get hyper focused on.
Approval ratios, chargeback mitigation and other possible services are the bottom line real earners.
Today one of them could be break even but with 20000 customers could introduce a service that makes them incredibly profitable.
It is a bit of a jump, but Apples accessories department is currently accounting for 20% of Apples entire earnings. Not even the core product.
Payments example for either being discussed is they could just introduce the same services Ethoca was offering MasterCard acquired and they'd add on another $20-40M in EBITDA.