We recently launched http://plot-ai.com to tackle this problem. It is a no-code excel add-in for data analysis, visualization and publishing (slides/web).

We have pilots going on and a lot of interest from folks in data science, consulting, strategy, finance, BI.

If this excites you as an end user or a developer I would love to chat. Ping me - anup@plot-ai.com

We have wondered about this long enough that we decided to take a shot at solving it. Signup if you are interested. http://kraft-labs.peek.link/YE5

Comments URL: https://news.ycombinator.com/item?id=26865912

Points: 4

# Comments: 4

Let me illustrate points 1 and 2 with an example.

a) Square earns $2 in revenue per $100 of transaction volume b) $0.5 would be their gross margin accounting for expenses i.e. bank/visa fees c) The next biggest line item to subtract would be risk. If there is a fraudulent transaction of $100, then square has to compensate it with 200 transactions of $100 each. (200 txns *0.5 gross margin). Net effect is not only do they have to deal with low margins, they also have to manage risk very well. And this is not something you accomplish overnight especially as you enter new markets. Personal anecdote: I had $120 or so disappear from my Starbucks wallet a couple of months ago and the merchant had to eat the loss.

Lastly, large payment processors get out of this loop because they manage the big (Targets and Walmarts of the world) with the small and over time have fine tuned their risk engine. Square went into it in the reverse order, targeting mom-and-pop stores first (which have low volumes and high acquisition costs) and then trying their hand at large merchants (Startbucks in this case and they lost a ton doing this). In the process they never got risk management right for either segment. And oh, they did not go with an online first strategy which PayPal did in the 90s and the likes of Braintree and Stripe did recently.

My 2c.

Let me illustrate points 1 and 2 with an example.

a) Square earns $2 in revenue per $100 of transaction volume b) $0.5 would be their gross margin accounting for expenses i.e. bank/visa fees c) The next biggest line item to subtract would be risk. If there is a fraudulent transaction of $100, then square has to compensate it with 200 transactions of $100 each. (200 txns *0.5 gross margin). Net effect is not only do they have to deal with low margins, they also have to manage risk very well. And this is not something you accomplish overnight especially as you enter new markets. Personal anecdote: I had $120 or so disappear from my Starbucks wallet a couple of months ago and the merchant had to eat the loss.

Lastly, large payment processors get out of this loop because they manage the big (Targets and Walmarts of the world) with the small and over time have fine tuned their risk engine. Square went into it in the reverse order, targeting mom-and-pop stores first (which have low volumes and high acquisition costs) and then trying their hand at large merchants (Startbucks in this case and they lost a ton doing this). In the process they never got risk management right for either segment.

My 2c.