Payments startup Stripe rolls out card issuing for U.S. clients
Financial-technology startup Stripe Inc. is starting a card-issuing service for U.S. clients as it expands beyond payment processing.
Stripe’s issuing technology will allow companies to develop cards for specific uses. Postmates Inc., for example, is able to give Stripe-issued cards to its food-delivery drivers to allow them to make payments at restaurants assigned to them through the app.
“The natural tendency is to pull back and go to the mattresses in a time like this, but we want to zig while others are zagging,” John Collison, president and co-founder of Stripe, said in an interview. “So we’re continuing to invest to help not only the new users, but to make the platforms more robust and reliable.”
With stay-at-home orders in effect nationwide, Stripe is one of the few companies investing rather than saving cash because its focus on online payments benefits from an increasing demand for e-commerce. Stripe also has partnerships with businesses like Postmates, Zoom Video Communications Inc., Instacart and Shopify Inc., which are seeing high volumes when overall consumer spending is declining.
Stripe is now the most valuable startup in the U.S., with its $36 billion worth putting it ahead of SpaceX and Airbnb Inc., according to CB Insights. Last week, Stripe raised $600 million in a Series G funding round from investors including Andreessen Horowitz, General Catalyst and Sequoia Capital.
To increase reliability, the fintech also announced Thursday that it has eliminated intermediaries from its card-authorization platform, meaning that Stripe can directly process payments from issuers including Visa Inc., Mastercard Inc. and China UnionPay at a faster pace. The company launched a revenue-optimization platform that reruns online card payments when they unexpectedly don’t go through, boosting authorization rates.
“The updates would be relevant in any climate, but they’re especially relevant now given the number of enterprise customers coming to Stripe in this environment,” Collison said. “We’re continuing to invest in the next year or two regardless of what the economy looks like because online payments are growing.”