Online and mobile payment tech startup Stripe has expansion plans on both sides of the Atlantic, and will rely on being a "simple" play for payments startups as it faces crowded field of competitors.
Stripe is so laser-focused on developers that its homepage features sample code in various programming languages. The message is that this is a truly plug-and-play way to handle payments.
"You get the [application programming interface] keys downloaded and integrated into your website and you're up and running…you can be accepting payments," says John Collison, who founded Stripe with his brother Patrick in 2011.
Stripe, which is among the growing number of companies that provide an open development model for other payments startups, recently launched in the UK and is aggressively pushing its new Stripe Connect product. Stripe developed its tools internally to require minimal programming on the user's end. It collects 2.9% plus 30 cents per successful transaction, and does not charge setup or monthly fees.
The company plans an aggressive push of its new Stripe Connect product. Stripe Connect allows users of any website to accept credit card payments—anyone who sells in an online marketplace or uses an online invoicing system can get paid through Stripe.
The program also "makes it easier to perform analytics on payments data," Collison says.
For example, Stripe has entered into a partnership with SumAll, a company that sells business intelligence. SumAll combines payments revenue information with data from Google Analytics, Facebook, Shopify and other sources to sell services to inform special offers, marketing and other customer facing activities.
Stripe's core product allows websites to accept card payments without a merchant account or a gateway and provides an API for web and mobile payments, recurring billing support, stored payment credentials, instant activation and PCI compliance. Stripe powers electronic commerce and online payments for websites operated by the Museum of Modern Art, Foursquare, travel site Hipmunk and the McSweeney's literary journal.
Stripe faces competition in the U.S. from Dwolla, Jumio and ZooZ—all companies that make their tech available to other payment companies. Braintree's also active in the U.S.—where LevelUp and OLO have used its platform to build out payments technology, Braintree company spokeswoman Lisa Kornblatt said in an email.
Jumio's Netswipe uses webcams and smartphone cameras to capture credit card payment information and validate it for processing with merchant's processor.
"It's a matter of providing consumers with the most friction-free and convenient way to complete the sale," said Marc Barach, spokesman for Jumio, in an email.
Jumio's clients include startups and more established companies such as Western Union and Travelocity.
In the UK, Stripe faces competition from Paymill, GoCardless and Braintree, says Arkady Fridman, a senior analyst for Aite Group.
"Paymill is the closest competitor to Stripe with respect to their developer-friendly approach," Fridman says. Similar to Stripe, Paymill provides a sample of its code on its homepage, Fridman says. Paymill also supports fraud detection, risk management and Payment Card Industry data security standard compliance, he says.
Stripe's offering also resembles services provided by Ixaris, says Zil Bareisis, a senior analyst for Celent.
"We are also starting to see banks beginning to think about how they can package their assets into discrete services and offer those in an 'open platform' way to customers and third party developers," Bareisis says. "This is not going to work for everyone, but I believe open platforms will be an important source of innovation for some players in the future."
As the use of mobile devices to shop and execute payments rapidly expands over the next couple of years, the opportunities for companies such as Stripe to provide quick-hit tech for new companies will be enormous, says Philip Philliou, a payments consultant.
But there is a catch—there's a finite window for the third-party API model, he says.
"I believe that the lifespan of these … companies may be limited as the traditional payment processors are introducing similar services," Philliou says.
Stripe should have plenty of opportunity to compete with the larger processors, says Collison. "We feel the traditionally larger company has not placed an emphasis on APIs."