Stripe Announces Partnership with Visa

Updated: 07/29/2015 09:42
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stripe visa partnership
Stripe declares the start of partnership cooperation with Visa, which along with other card network providers joined the new round of the Stripe financing
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The provider of online payments Stripe has recently started the new round of financing. The following payment systems: Visa and MasterCard invested to the startup. Along with that the US venture fund Sequoia Capital joined the financing as well. The amount of financing has not been disclosed though. Thanks to large investments the Stripe capitalization reached the amount of $5 billion.

Experts claim the significant startup value is not of such a great importance as its cooperation with Visa. The startup authorities state they managed to sign agreement with the payment system. The companies will be working on digital transactions transactions. Particularly they will start developing the "Buy" buttons for the online-services.

The provider of mobile payments Stripe announced the new round of financing, during which such investors as Visa, American Express and Sequoia Capital estimated the company value of $5 billion. Besides, the co-founder of Stripe Patrick Collison declared the beginning of partnership with Visa, aimed at improving digital transactions, payments security and tools for making sales on websites.

The capitalization increase up to $5 billion is a serious progress for the company, which was estimated at $3.5 billion just half a year ago. Stripe received $70 million investments then. The amount received during the previous round is not disclosed, there is just a note saying it is "less than $100 million".

Stripe, founded five years ago has been gathering speed fast, offering simple software and services for small and medium businesses online. Just as Square and PayPal, Stripe allowed debit and credit cards for making payments with a small commission fee.

Starting the cooperation with Visa Patrick Collison sees the opportunity to expand Stripe services widely. Now the company is offering its services in more than 20 countries and hopes to expand its presence with the help of Visa.

Starting the partnership of Visa with Stripe instead of more global companies is an alert for all members of the digital payments market. Visa always treats carefully other providers of payment services, such as PayPal, which processed more than $220 billion via online transactions during the previous year, the one, which has recently became independent from Ebay. Although PayPal has been processing credit transactions basically from the very start of online commerce, Visa is worried about the opportunity of PayPal and similar platforms to switch the relationships with clients to themselves to some extent and so to pull clients over to debit transactions, where PayPal actually receives more profit.

Charles W. Scharf, the CEO of Visa Inc. considers as a threat ability of PayPal to analyze the transaction data that go through the platform with the purpose to change the model of interaction between clients and the card network. Scharf voiced concerns for that during the online conference with Wall Street analysts last week. The authorities of PayPal, who took over another company, competing with Stripe, Braintree in 2013 gives no comment on those concerns.

Michael Moritz, the non-executive director of Stripe and Sequoia Capital partner considers that Stripe is not a competitor. It is a friendly partner to the main card networks. And the fact Visa invests to the company truly confirms its partnership with the young company and is of a great relevance to the future of the company and the industry as a whole. Patrick Collison confirms the words of Moritz, and declares the rules of the game on the market of retail finance are mostly defined by the credit card companies, and Stripe, which managed to launch the payment tool with American Express recently, is looking forward to continue the cooperation with these networks.

As for the USA, Stripe is getting far more and more popular due to the integration simplicity. Earlier Future Banking wrote that Stripe has bee used by the members of presidential election race in the USA for taking donations.


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