“Stripe and PayPal generate about the same volume of payments, but Stripe does about one-fifth of the net revenue,” Hadick said. “From a financial perspective, this is obviously accretive, and it 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 it would be difficult to close a deal of this scale. “Integrating mergers and acquisitions into a company of this size is incredibly difficult,” he said.
Beyond merchant 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 merchant payments.
The proposed acquisition would also determine who controls the consumer side of the blockchain-based payments infrastructure, complementing Stripe’s existing merchant network and stable capabilities.
Several executives said the competitive focus has shifted from proving blockchain technology works to controlling distribution.
Pankaj Bengani, founder and CEO of Meld, agrees with Larbi that the race is on.
“The race has moved from proving that the technology works to owning distribution,” Bengani said, adding that “stablecoins have moved from experimental to basic payments infrastructure.”
Citi analysts reached a similar conclusion in a research note, writing that stablecoin competition has become “a game of definition by default,” the scale of which comes down to which stablecoin becomes the default among the largest merchant, consumer wallet, or standalone transaction base, rather than which issuer has the best technology.
