Stripe Service Making Online Card Acceptance Easier
- The US-based company Stripe proposes Stripe Service to make online card acceptance easier. While several e-merchants either use PayPal to accept card payments or have invested in specific infrastructures to store transaction data, the start-up proposes a simple, low-cost, alternative model.
- Stripe in intended for of kinds of e-merchants, regardless of their size. In the beginning of February, PayPal’s founders –who seemed convinced of its potential– have also invested in its development.
- For purchasers, websites having opted for Stripe Service display typical card payment interfaces but the data they enter is transmitted to the company’s server hence avoiding storage by merchants themselves. Stripe processes payments, checks for fraud and charges 2.9% + 0.30 dollar per transaction. Merchant are credited one week later.
- Also, Stripe does not charge any setup fees, monthly fees, validation fees, or card storage fees and there is no charge for failed payments either.
- Stripe Service was launched in September 2011; as it is less expensive for merchants than PayPal, it is rather popular with merchants. Yet, the service could be impacted by its longer collection delay (seven days, required by the player to avoid fraud). Also, Stripe only focuses on the Web channel and, for now, has decided to leave mobile transactions out of its scope.
- The company has recently been valorised at 100 million dollars as it raised 18 million dollars (including 17 million from Sequoia Capital investment funds).
- The interest of this solution especially relies in its simplicity for merchants: they do not have to open a dedicated bank account and they are relieved of card data protection issues; Stripe manages this storage for them. However less expensive than giants such as Amazon Payments or PayPal, one question remains: will this new entrant manage to face these well established rivals?