Stripe, JPMorgan Chase build their faster-payments arsenals

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Stripe and JPMorgan Chase are firing rapid shots in their battle to win businesses, with faster payments as the centerpiece of their offerings.

Stripe on Tuesday released a series of new products for businesses, highlighted by the Stripe Corporate Card, and also announced a vast geographic expansion and a series of other products that includes instant payouts. At almost the same time JPMorgan Chase announced same-day deposits for clients of its WePay unit.

In Stripe’s case, it’s offering a Visa credit card to address what it sees as shortfall spend management for internet companies, claiming corporate card applications are lengthy and time-consuming. Stripe is offering an application and enrollment system in which businesses upload their logo onto the Stripe Dashboard to receive a virtual card instantly or a physical card in a few days.

The cards have built-in spend controls for staff, real-time expense reporting, incentive marketing and no annual fees, foreign transaction fees, late fees or card replacement charges.

The Stripe card joins a handful of other moves from just the past week as it faces a consolidating payment processing industry and competition from other alternative merchant acquirers such Square. Stripe has parlayed its original business of providing online payment connections for businesses into a huge valuation of over $20 billion and a network of what it says are "millions of businesses," giving it room to build a much larger stack.

Just last week Stripe launched Stripe Capital, a merchant lending product that targets online communities, which can offer the product to their own sellers. Stripe Capital is a direct play against Square, which is expanding its own merchant credit product into more types of lending; and it gives Stripe inroads into financial services as existing merchant acquirers and fintechs bulk up through acquisitions.

In an email, a Stripe spokesperson said the card has a partner bank, and credit decisioning is based on payments and banking history with Stripe, similar to Stripe Capital. The Stripe Visa Corporate Card is issued by Celtic Bank, which is chartered in Utah.

Seventy percent of businesses say they don't have access to the capital they need, and almost a quarter of small businesses use personal credit cards for business expenses, the Stripe spokesperson said.

Stripe has also extended it Global Payments and Treasury Network to support business payouts to recipients in 45 counties in local currencies over local bank networks, contending businesses can make payment connections via open source development with scant engineering work.

It additionally launched instant payouts in the U.S., Stripe Terminal in Canada, new billing technology that addresses GAAP reporting and reconciliation, and launched its overall business in Eastern Europe.

In earlier deals, Stripe acquired Touchtech to give it a foothold in strong authentication to comply with PSD2 and other open banking trends as Stripe expands internationally.

Each of these moves gives Stripe more of a reach into services that banks would provide, such as merchant support, credit and the scale and local connections to support global cross-border payments. Square has made similar moves toward banking to keep its original base of merchants from fleeing to larger financial institutions.

The banks have not stood still. Just as Stripe was announcing its card, JPMorgan Chase rolled out free same-day deposits to its WePay users.

JPMorgan Chase acquired WePay in 2017 partly to counter Stripe's influence with smaller merchants. WePay's API provides payments technology that allows merchants and online marketplaces to support digital payments, a model similar to Stripe's.

The same-day deposit feature is similar to Stripe's instant payouts offering in the U.S.; and by offering Stripe Capital to its own merchant communities, Stripe and WePay are chasing the same merchant model.

"Without the power backed by JPMorgan Chase, WePay would not be able to offer a step beyond integrated payments. … We can offer faster funding to Chase banking customers at no additional cost," a WePay spokesperson said in an email.

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Faster payments Acquirers Alternative acquirers Credit cards Stripe WePay JPMorgan Chase
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