Deep Dive: Stripe

Stripe was launched in 2011 by Irish brothers Patrick and John Collison. Its headquarters are in San Francisco and Dublin with 14 global offices around the world including Singapore, Tokyo, Paris and London. It currently employs more than 2500 employees.

Stripe processes more than 250 million API requests per day, peaking at 13,000 requests a second. 90% of the adult population in the U.S has bought products or services from Stripe’s business customers at some time or another

Products

Stripe’s developer friendly APIs and payments platform coupled with its broad toolkit of products and services allow businesses to build websites and apps that process payments globally. Stripe’s product fees are typically 2.9% + 30¢ per payment transaction with additional fees for services like Payouts, Billing and Atlas.

Payments

Stripe’s payments APIs allow businesses to to accept, process, settle, reconcile and manage payments. Stripe’s payment stack includes customer interfaces, payment options, mobile web, SDK and customer interfaces, use cases, revenue optimization, fraud and disputes, payouts, reconciliation, reporting insights and third party integrations.

Stripe’s payment stack offers a complete range of payment services and integrations.

Customer Interfaces

Stripe Payments users can choose from several browser and device friendly check out integrations such as a hosted payment page called Stripe Checkout. Other customer interface options include the use of embeddable UI components or Stripe Elements, in-person payments through Stripe Terminal and invoicing.

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Payment Options

Stripe Payments supports flexible payment options for international customers such as credit and debit cards, wallets, bank and debit transfers, bank redirects, Buy-Now-Pay-Later, cash-based vouchers. It works with more than 135 currencies.

Mobile Payments

Business customers can accept payments from iOS, Android and mobile websites. Stripe’s mobile SDKs also allow customers to create a customizable checkout flow from scratch.

Use Cases

Stripe’s tech stack offers one-off payments, online, omnichannel and recurrent payments, subscriptions and payments for platforms and marketplaces.

Revenue Optimization

Payments creates revenue optimization for businesses through its authorization and authentication programs. The payments API applies its authentication logic to maximize conversion and minimize

Fraud and Disputes

Payments helps counter fraud through Stripe Radar and Dynamic 3D Secure.

Reconciliation

Stripe’s API and Dashboard feature financial and consolidated reports on charges, fees, refunds and transfers. It also provides accounting support by syncing data with a business’s online ledger.

Business Operations

Payments allow businesses to share access to their Stripe accounts with their team members under a single unified account with control and visibility.

Payouts

Customers can navigate the Stripe Dashboard for payouts. Payouts supports unified, multi-currency, instant and cross-border payouts and offers payout management access to historical and upcoming deposits.

Reporting and Insights

Payment analytics are supported through Stripe Sigma, Stripe Dashboard which showcases all Stripe data and the Dashboard mobile app.

Third party integrations and Support

Stripe’s hundreds of third party integrations such as Shopify, Freshbooks and Typeform convert manual processes such as accounting and analytics to simplified automated experiences.

Stripe Radar

Radar is Stripe’s in-built fraud detection and prevention platform and network that utilizes machine learning across billions of layers of Stripe data points from its financial partners, payments and checkout flows. Radar is able to distinguish fraud attempts versus legitimate customer requests and applies Dynamic 3D Secure to high risk payments. Radar’s detection signals include device biometrics, historical snapshots, proxy detection and other multiple signal combinations.

Stripe Radar’s interface allows users access to dispute rates, dispute reason data and review rule performances.

Stripe Sigma

Sigma is a customizable data analytics platform powered by SQL which allows businesses to analyze and interpret company data that enables business operations, finance and product management teams to run reports directly and take faster action.

Stripe Billing

Billing allows users to create invoices and end-to-end billing along with avenues for increased revenue with reduced churn. It also generates financial reports. It also supports new products or business models, and accepts one time or recurring payments via card, ACH and other popular payment channels such as FPX, IDEAL and P24. The Billing API simplifies integration into user websites, apps and CRM systems and provides customisable subscription logic and pricing models.

Stripe Atlas

Atlas is Stripe’s entrepreneurial platform for startups around the world to incorporate and launch their businesses in the U.S. Atlas allows businesses to hosts thousands of founders from 140 countries. Atlas users have access to Stripe’s financial APIs and financial tools along with $5000 free credits and discounts with Stripe’s partners such as AWS and legal and accounting firms. Atlas supports the legal framework for launching companies by providing legal documents and filing paperwork in the state of Delaware.

Stripe Connect

Connect is a set of APIs and integrations that let businesses expedite payments on their software platforms, build a marketplace, and pay out sellers or service providers globally. It allows businesses to onboard and verify users through its KYC (Know Your Customer) and compliance requirements, accept and process payments for user accounts, split payments, transfer funds, send money and manage payments and users on their platforms.

The Stripe Connect user interface at a glance details payments, transfers, payouts and collected fees.

Stripe Capital

Stripe Capital offers businesses loans for growth and investment. The loans offered on Stripe Capital get repaid by sales made on Stripe’s payment platform. Capital also offers platforms a lending API that can allow them, in turn, to offer their customers financing options. Eligibility for loans depends on factors such as overall processing volume and processing history on Stripe. It does not depend on a credit check. Repayment is automated and adjusted based on a business's daily sales. Stripe deducts a fixed percentage of sales until the owed amount is repaid.

Stripe Issuing

Stripe Issuing provides an API that allows businesses to create, manage and distribute their own branded virtual or physical cards. Issuing requires no activation fees or long term contracts and is available for launch within seconds. The card issuing mechanism is linked with Stripe Connect. Stripe performs the verification legwork and provides the ledger while enabling users to set customisable controls such as spending limits, curated merchant lists, one or multiple use virtual card options etc.

Stripe Treasury

Stripe Treasury is a banking as a service API that allows users to embed banking services into their platforms and marketplaces. With Stripe Treasury businesses can enable customers to hold funds,pay bills, earn interest and manage cash flow. Stripe Treasury enforces ACH and wire transfers, interest-earning accounts, and faster access to payments funds through its bank partnerships under one umbrella platform under user control. Stripe Treasury users can create a simple stored-value account, a full-featured bank account replacement, a payout card and a product operations account.

Stripe Terminal

Terminal allows businesses to translate their online presence into physical checkouts through its developer tools, pre-certified card readers and cloud based hardware management. Terminal allows integration with a businesses online and offline payments channels with supportive links to Connect, Billing and Payments.

Stripe Climate

Stripe Climate provides companies in the U.S the opportunity to direct a fraction of their revenue into scaling emerging carbon removal technologies. Stripe’s carbon removal projects are overseen by its multidisciplinary group of scientists.

Stripe Corporate Card

The Stripe Corporate Card allows companies to issue branded corporate cards that grow with their businesses through credit increases. It offers companies the ability to monitor company spending and receive 1.5 % cash back on every business transaction. Cashback balance is routed to the monthly bill and there are no annual, foreign transaction or late fees.

Funding and Investment

Stripe raised a seed round with investment from Paul Graham and Y Combinator in June 2010. In 2011 it went on to raise a seed round with investments from SV Angel, Andreessen Horowitz, Elon Musk, Peter Thiel and Sequoia Capital. In 2019, Stripe raised $250 million in a Series F funding that valued the company at $35 billion. Andreessen Horowitz, Sequoia, Founders Fund, and General Catalyst were early investors and have continued to invest over time. Thrive Capital, Khosla, Kleiner Perkins Caufield & Byers, and Redpoint also invested in early seed rounds. Tiger Global and DST have recently participated in funding rounds.

In April 2020, Stripe raised a $600 million funding round that set its valuation at $36 billion. In November 2020, Bloomberg reported that Stripe was in talks to raise a new funding round at a higher valuation of $70 billion to $100 billion.

At the other end of the spectrum, Stripe also invests in startups, betting on firms like PayMongo, Rapyd, Paystack and Cuenca.

Recent Mergers and Acquisitions

• Paystack
• Touchtech Payments
• Index
• Payable
• Teapot

Customers

Stripe’s customers include millions of businesses in 120 countries ranging from small to large scale businesses. Stripe’s customers include ecommerce and retail platforms, B2B platforms and B2C marketplaces, SaaS platforms along with nonprofits and funding platforms. Prominent Stripe customers include Doordash, Uber, Lyft, Amazon, Shopify, Peloton, Zoom, Slack, Wish, IRC, Unicef, and Save the Children.

Competitors

Stripe’s competitors are major payment technology providers that support small, medium and large businesses.

• PayPal
• Square
• BrainTree
• Google Pay
• Authorize.net
• Coinbase
• PayJunction

Tearsheet Coverage

• Is Stripe Treasury ‘game over’ for banking as a service?
• Move over PayPal and Square, Stripe introduces Stripe Capital
• Stripe updates payments platform and rolls out card issuing
• Keap customers want to improve conversion rates with new Stripe partnership
• Stripe expands its ecosystem into lending, adds Funding Circle as a partner
• 2020 in review: The year of the pandemic as seen through Tearsheet’s top stories
• List of top B2B fintech firms
• Why bitcoin should be a ‘store of value’

Environmental Initiatives

Stripe Climate is Stripe’s flagship environmental platform for investment into carbon removal projects. Stripe buys carbon removal from Climeworks, Carbon Cure, Project Vesta and Charm Industrial. According to Stripe’s Negative Emissions Commitment, it aims to purchase negative CO2 emissions at any price per tCO2 and has committed to spending at least twice as much on sequestration in long term storage as on offsets, with at least $1 million per year.

Stripe Leadership