Fintech giant Stripe is getting into the credit game

Image credits: Daniel Acker/Bloomberg/Getty Images

Stripe wants to make it easier for businesses to access credit.

The private financial infrastructure giant today announced a new credit card program from Stripe Issuing, its commercial card issuing product, Denise Ho, product lead for BaaS at Stripe, told TechCrunch exclusively.

The company originally launched its Issuing product in 2018 and has since helped companies like Shopify and Ramp issue more than 100 million cards in the US, UK, and EU. Today, the Stripes product is one of the fastest growing products, Ho said, supporting half a million transactions a day. Fintechs like Klarna build entire businesses on it, the company says.

Previously, Stripe-issued cards could only be used to spend money from a pre-funded account. Its expansion into charge cards, according to Ho, will give companies the ability to create and distribute virtual or physical charge cards that allow their customers to spend on credit rather than using funds in their accounts.

Among our product suite, Issuing is doing very well indeed, Ho told TechCrunch. And the main request n. #1 within Issuing was Stripe’s ability to enable our platforms to offer credit to their users.

This has a two-fold benefit for Stripe, giving it a new revenue stream and the ability to offer new financing capabilities to its customers with little additional operational cost, Stripe argues. (Operational efficiency is in vogue, after all.)

For example, platforms using Stripe Connect can offer white-label products from Stripe and provide a range of built-in financial services, such as financial accounts, working capital loans and now debit cards, too, Ho said.

Additionally, he added, Stripe Issuing provides the core components of a charge card program such as fund flows, network connections, printing and integration APIs and then aims to streamline all necessary compliance, bank partnerships and registry.

Ramp, Emburse, Karat and Coast are among the current users of the credit card programme, which is available in beta in the US and will later expand to the EU and UK

In the US, the banks are the ones that have been our sponsors and that’s regulated, Ho explained. And because you’re letting the small business spend, that’s a form of lending so the loan compliance has to come from the bank.

For his part, he said Stripe is partnering with startups to help walk them through the process and help provide the necessary compliance and risk oversight so they don’t get in the way.

When it comes to subscription, Ho said Stripe has received feedback that its customers ultimately want to own the subscription decision.

What we do is help them put the set of policies together and ensure that these policies are actually compliant, he said. So we offer both. . . flexibility and control but with guardrails.

Over time, Ho said his customers may want more modules to subscribe to, so that’s something Stripe will work on over time as its offering matures.

Anyone can sign up for the new program, he said, even if they’re not an existing Stripe user.

For its part, Stripe will make money from interchange fees, so as customer volume grows and users spend more, Stripe will make more money. There will also be compliance costs associated with the program.

On May 31, TechCrunch reported exclusively on Stripe’s acquisition of Okay, a startup that has developed low-code analytics software to help engineering leaders better understand the performance of their teams.

Note: The original post said Stripe would be expanding to the UK and EU in the coming months. This has been changed to say that the expansion will happen at a later date.

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