FINTECH Case Study
According to https://stripe.com/about, stripe.com is “a technology company that builds economic infrastructure for the internet. Businesses of every size—from new startups to public companies—use our software to accept payments and manage their businesses online.” Also, according to the stripe.com about site, stripe “combines a payments platform with applications that put revenue data at the heart of business operations.” Competitors include PayPal, square , Wepay, Dwolla, Klarna, PayU, and Billing Tree.
Stripe provides APIs to developers so they can do payment processing on their websites and mobile applications. APIs allow Stripe to offer a simple solution to online payment processing with a few lines of code. In addition to payment processing, Stripe also has features such a fraud prevention, subscription management, business incorporation, credit cards etc. Stripe is considered a fintech company because it utilizes the internet (technology) to solve the problem of online payment processing Why is this company exemplary in the FinTech space? What are their strengths and weaknesses? (Kevin) What is the prognosis for this company? Where do they expect to be in the future? (James) Forbes values Stripe at $35B which some says is worth more then $10B than its closest competitor, Square. They have aligned themselves with website developers and have started to move on the idea of Stripe Capital where they will be giving loans to customers as well as a credit card arm. They have stayed away from the public markets because they feel they are in the early days of company development.
Why is the company exemplary in the FinTech space? With the rise and dominance of E-commerce in the retail space, their plug-and-play API is exemplary as it efficiently manages payments online. The core of internet commerce is the ability of a website to securely accept payments over the web, a service in which Stripe has demonstrated great expertise. Stripe’s API’s support refunds, fraud prevention, recurring payments, and various monitoring tools. In addition, the API supports in-person payments, the issuance of proprietary payment cards and also a turn-key solution for setting up an internet business. What are their strengths and weaknesses? Their strength is simplifying the credit card processing on websites. Their weakness is that payment processing involves working in a highly regulated industry requiring a lot of compliance and also there is a shortage of engineering talent.