During Apple’s announcement, Twitter effectively became our live stream after the frustrating technical difficulties. Jasdev, a friend from Imgur, was most intrigued by Apple Pay's partnership with Stripe. I asked him to elaborate on his message for our audience.
Processing payments online from users is a tough nut to crack. Obstacles range from fraud and security to dealing with thousands of regulations. Historically, the problem has been so hard that some very smart people came together in the 90s “dot-com” boom to start PayPal. PayPal’s ability to route money between two parties was invaluable to Ebay, whose business depended upon transferring money between buyers and sellers. As a result, Ebay purchased PayPal for $1.6 billion in 2002.
Since then, there’s been an explosion of Internet companies driven in large part by the diminishing costs of creating software. The building blocks of creating a software business are widely available through APIs. An API allows one piece of software to “talk” to another piece of software. In other words, if someone has built something useful and made an API for it, you don’t have to build it yourself. This allows startups to focus on developing their product instead of reinventing the wheel. One of the most important of these building blocks is processing payments. Stripe, a relatively young company, is increasingly gaining developer adoption and becoming the payment processor of choice for Internet companies.
At its core, Stripe is an API that allows online businesses and applications to easily accept payment from their users. Their business model of charging a 2.9 percent fee, plus 30 cents, of each transaction succeeds when their customers succeed. Morever, Stripe shines in three vital areas and as an engineer heavily involved in developer relations, I am enthusiastic about the startup’s future.
Agility in adopting new technologies
Whether it’s Bitcoin, Stellar, or 139 other currencies, Stripe is able to rapidly roll out developer kits and support for new forms of payment and protocols. To give context around this speed, the company announced support for Stellar, a decentralized protocol for sending and receiving money in any pair of currencies, just hours after its announcement. While this was obviously behind a curtain, it speaks volumes about Stripe being regarded as the first choice for these types of adoptions.
Landing key deals
Within the span of 4 months, Stripe announced partnerships with Alipay, Twitter, and Apple. For a company of 160 employees, and just under five years in age, these are huge wins to add to their gallery.
Developer support and evangelism
The company extensively blogs, holds office hours and maintains an active IRC channel to help companies integrate with their services. For a startup looking to gain market share, this is crucial. However, the real challenge lies in their ability to sustain this level of support as the company grows. Another area still largely untapped by Stripe is hackathons. By having mentors on-site and getting their client libraries in the hands of as many budding developers as possible, they can solidify their name as the go-to tool for online payments.
The next few years will be critical in their journey to win over developers and fend off competitors like eBay’s PayPal and other financial companies. However, with its current trajectory, Stripe is silently on its way towards becoming the transaction layer of the Internet.