Article by Samuel Caink, Trainer at Solvay FinTech Marketing Hub

Stripe was founded in 2010 by two brothers, John and Patrick Collison, whose entrepreneurial adventures started when they were still teenagers. They created Auctomatic, a tool to help small Ebay sellers to improve their revenues. Due to the recorded success, John and Patrick have been able to sell their company for $5 million in 2008 at age 18 and 20.

By working for and with small sellers, they noticed on Ebay that those who were trying to develop their own e-commerce websites were struggling with online payments. Indeed, unlike big players who can afford to develop their own payment solution and all its requirements (merchant account, fraud prevention, etc.), small players on the other side had to rely on third parties. PayPal was the most obvious solution for the Ebayers. In Belgium, we have a good example with Ogone (now it is known as Ingenico ePayments) which is an effective solution provider for processing online credit and debit cards. These kinds of solutions have however a major flaw: breaking the customer experience by making the payment outside the vendor’s website. Moreover, they are not always easy to implement and might require a subscription fee in addition to the transaction costs.

 A tailor-made product

John and Patrick came up with a new innovative solution for the numerous small e-business entrepreneurs who were struggling with the online payment systems. They created Stripe to address their target’s needs by offering:

– easy platform implementation on any website with a simple line of code;

– high user experience;

– no need for a merchant account;

– no need for a monthly subscription;

– high fraud prevention system.

Stripe allows its users to have an Amazon-like checkout experience while providing security and protection.

Reaching the advocates

There was another element the third parties had in common: the lack of documentation and the outdated code they used. Developers can be pricey, especially for entrepreneurs with a limited budget. By focusing on the developer-side and having a solid documentation, they managed to get advocacy from the developer community. Step-by-step, Stripe became the obvious answer for developers and entrepreneurs in terms of online payments processes.

Above and beyond through partnerships

Stripe got also traction thanks to its partnerships. Shopify is one of the best examples. The Canadian E-commerce platform allows anyone to make its own e-commerce website in just a couple of minutes. Every single of those websites (377.000 and counting) is packed with Stripe. Partnerships are also made with acceptance networks such as Visa and Mastercard but also more recently with national ones such as Bancontact.

Those recent positions taken by Stripe reveals a will to address targets outside the US with an all-in-one solution to accept every single payment method. In 7 years, Stripe managed to reach the second position in the Online Payments market with 5,63%, but still far behind the top player PayPal with 75,59%.

Do you think it will be able to get out of the small businesses side with the product/service they made to reach larger structures with their specific needs?