Stripe Terminal addresses blurring of e-commerce, physical POS

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Stripe is making a Stripe Terminal available to its e-commerce clients, looking to unify online and physical point of sale payment streams.

The terminal, which resembles a pocket calculator, is Stripe's answer to a problem many of its e-commerce customers were facing — there was not a business model in place for them to handle both online and in-store payments. It's the reverse of the dilemma companies like Square have faced in serving shops that also expect to sell online.

When Stripe acquired technology startup Index this year, it was apparent the e-commerce payment processor was going to make some inroads into the physical retail space, said Jordan McKee, a senior payments analyst with 451 Research.

After all, PayPal has spent billions of dollars in acquisitions to try to keep competitors like Stripe and Square at bay.

Stripe countered with its purchase of Index, created by former Google executives, obtaining the technology to integrate numerous features through a point of sale terminal — from adding promotions and offers, to supporting different payment methods and connecting various mobile devices.

"Stripe absolutely realizes that to go up-market they have to have a proposition that handles online and physical retail," McKee said. "They want to be the single entity to enable payments across many channels."

Stripe is addressing "an increasing appetite for merchants to work with a payment partner that has a single platform that can facilitate transactions online and in physical retail," McKee added. "There is a growing desire for that in the market."

Retailers already using Stripe to power in-store and online payments include Warby Parker and Glossier.

The terminal connects to booking and commerce software platforms such as Mindbody, for yoga and fitness centers; Zenoti, for salons and spas; AtVenu, for concerts and performances; and Universe, for live events and tours.

"For the kinds of companies that run on Stripe—modern, globally oriented, technically sophisticated organizations—there’s been no good way to unify the acceptance of in-store and online payments," said Devesh Senapati, product manager for Stripe Terminal. "We’ve been hearing from our users, both internet-first retailers and software platforms, that they’d like us to be able to support their expanding presence in the physical world."

The terminal is available in the U.S. currently, and Stripe says it plans to launch in more countries in the coming months.

The announcement comes just weeks after Stripe revealed on its issuing portal that it was offering application programming interfaces to issue physical and virtual credit cards.

"Both Stripe Card Issuing and Stripe Terminal extend Stripe’s infrastructure from the online to the physical world," Senapati said. "And both are fundamentally designed for modern, technically sophisticated, internet-first companies."

Stripe began offering credit cards three months ago, through Visa and Mastercard network support.

Furthering Stripe's strategy, it partnered with Microsoft this year so that Microsoft could use the Stripe Platform to allow hundreds of millions of Outlook users to immediately pay invoices and bills received via e-mail in more than 35 countries.

Stripe Terminal readers are supplied through Verifone or BBPOS and can handle EMV chip card, contactless and mobile Apple Pay or Google Pay payments.

Stripe has raised about $450 million in funding from investors such as Sequoia Capital, Visa and General Catalyst since it was founded in 2010.

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