How do all the payment providers (grabpay, favepay, liquid pay) and virtual cards (youtrip, revolut) actually make money? - Seedly
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Kelly Trinh

Asked on 24 Nov 2019

How do all the payment providers (grabpay, favepay, liquid pay) and virtual cards (youtrip, revolut) actually make money?

It seems like a massive pile on recently and not so clear what is the revenue streams. What is so lucrative that is leading so many firms to pile on and enter this space?

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Cedric Jamie Soh
Cedric Jamie Soh, Director at Seniorcare.com.sg
Level 9. God of Wisdom
Answered on 24 Nov 2019

EBay started, and to solve the problem of paying via the internet, PayPal was invented.

Paypal was spun off, being more valuable than eBay.

Taobao wanted to solve the problem of paying via the internet since most Chinese does not have a credit card, Alipay was invented. Now alipay (and its competitor- wechat pay) is very valuable.

Transaction fees (paid by merchants usually), even as a small percentage, can be very lucrative since there are so many transactions per day. Just look at VISA and MASTERCARD, they are huge companies earning only a few percent of each transaction.

Don't be mistaken by the free transactions offered by most payment systems now, eventually, when they are having great market volume and power, they will be asking merchants to pay per transaction.

Holding data of all these transactions, these data are valuable to provide insights to advertisers too.

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Kelly Trinh
Kelly Trinh

24 Nov 2019

I thought PayPal started independently of eBay... I vaguely remember them giving away money for new years (same playbook as startups today, just many many years ago when PayPal was baby tech startup as well hahaha)

Advertisement, marketing from other retailers that tap on this tech firm to increase their business revenue.

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