The World of Digital Payment Systems
We live in a different world now. Yeah, we were aware of the transition that made borders disappear thanks to the thingmagic called internet and we were quite pleased with the velocity of the roller coaster however when another factor of nanometric proportions showed up like a Mongol horde from the steppes – pun, geographically accurate – we came to accept that our lives could be confined, sometimes for more than we could possibly handle. That’s why all aspects intertwined with us had to accommodate the circumstances as well, the economy being one of most affected of them all.
Even my highly tech-shy relatives have given up and submitted to the digital overlords having started using mobile banking apps that relieved their old hypertension-ridden body from the stress of waiting in lines, okayed their credit card being used online, even! Yeah, what is a breakthrough for my uncles is a typical day’s shopping for the younger of which the absence would be stupefying after all these years.
Making an online payment is a layer which is actually bigger than most businesses you get a glimpse of for a minute maybe before your order is processed. Payment processors, technically, act as the intermediary connecting the merchant and the customer effectively making it a deal between the two parties. The payment gateway that does the actual math in between is sometimes separate or incorporated within the payment processor itself.
Who runs the world?
One of the most widely known payment systems would be PayPal – a company whose core direction was led by Elon Musk himself until he was ousted as the CEO over a technical disagreement with board members, which announced a net income of 2.5 billion USD in 2019. For most EU countries, UK and USA, checking out with PayPal generally has its own button on e-commerce websites that takes the customer through its own infrastructure to receive the payment. As of 2021, it is the only foreign operator with total control of a payment platform in China.
Shopify is yet another one of these services, although processing payments is not their only trade, they provide a host of other services for online retailers such as marketing, shipping and customer services tools as well as making their website “commerce-able”. Now serving more than 1 million businesses worldwide , Shopify joined the ranks that blocked Trump-affiliated organizations, taking TrumpStore.com offline as part of the aftermath of the attack on the U.S. capitol.
Stripe, Klarna, eToro, Adyen, no blog post would be enough to talk about them all. It just needs to be understood that these companies now belong to the bloc that “runs the world” as commerce gets inevitably electronicified and it is always a good idea to keep a close eye on them. The market is still hungry and it is my duty as an investor to point out that we can do a lot more and better.