Today, Stripe launches Stripe Connect, a tool that streamlines the process of accepting payments online by wiping out all the usual cumbersome clutter.
With the new system, Stripe, a fast-growing startup aiming to simplify the online payments world, lets any website that enables transactions to bring Stripe to its users instantly, with a few painless steps. The San Francisco-based company has already launched in the U.S. and Canada and has become increasingly popular among developers and investors. Sequoia Capital and General Catalyst recently deposited $20 million into Stripe at a reported valuation of as much as $500 million. Now, with its latest feature, Stripe is one step closer to making accepting credit cards online as easy as embedding a YouTube video, as the startup's cofounders once told me.
Think of Stripe Connect as the Facebook Connect for payments. Traditionally, to accept payments online, businesses were required to obtain what's called a merchant account, a wonky process that could take weeks of dealing with outmoded, legacy infrastructure to complete. Stripe streamlines that complicated process by removing the traditional hassles (gateways, subscriptions, credit card storage, hidden fees) and taking care of the other headache-inducing details (banks, regulations, compliance standards) to allow users to start accepting payments online almost immediately.
At launch, Stripe Connect will already be working with the online-store startup Shopify, the class-marketplace startup Skillshare, as well as with popular community website Reddit for donations.
"What we've seen happen in the last couple of years is that a lot of new marketplaces have sprung up online--more companies are turning their users into sellers, like Airbnb or Kickstarter," says Patrick Collison, cofounder and CEO of Stripe. "Stripe Connect enables any of these services to integrate Stripe's technology into their platform and offer it to all of its users. There is no company that does this. To do this on your own, you'd literally have to build a little payments company internally, which is obviously a huge barrier to entry."
What's more, Stripe Connect will also leverage a huge amount of payments data that's traditionally been siloed in traditional legacy infrastructure systems or just plain inaccessible. (For example, as Collison points out, some payments data is still paper-based.) Because Stripe Connect can link users to a single payment account, across a variety of platforms, the system will enable them to tap into a number of third-party services, from analytics to accounting tools.
"It's a really big deal for users, because now they have a single payments identity they can bring anywhere," Collison says. "So you're selling through this one store or your getting invoices paid through another service and then you want to share all this payments data with a CRM tool or with analytics software--Stripe Connect allows you to plug in your payments information anywhere, so you can both accept payments in more places and bring that data to more places."
Of course, there are a number of competitors in the crowded space, including eBay's PayPal and Google Checkout, which are also trying to simplify the system of accepting payments online. These corporate giants process tens of billions of dollars annually, an indication of what Stripe, a startup with roughly three-dozen employees, is going up against.
But the new release further underscores Stripe's rapid growth. The company, which we profiled earlier this year, has already gone through two big rounds of funding, last month expanded to Canada while promising even more international expansion in the near future.
[Image: Flickr user Marco Barbieri]