Stripe announced today that it is expanding its service to Canada, marking its first launch outside of the U.S. and the first step in a larger strategy of broad international availability. The Canadian launch should make quite a splash, because the online payments space is dominated by long-established incumbents here like Moneris, and at least as primed for the kind of shake-up that Stripe has managed in the U.S., if not more so.
Stripe has raised considerable funding, including a $20 million Series B round from General Catalyst, Sequoia and Peter Thiel, and traction has been good. The company was reported to be valued at around half a billion when it raised that round, and it’s since added some big name partners, including Reddit, and added features like team settings including permissions, as well as improved recurring billing options. The company launched on the premise of being easy for developers to build into their products, and now it’s busy adding functionality to that core value proposition.
“Stripe is building the new economic infrastructure for the internet, and part of how we think about that is by looking at how transactions work on the internet on a global basis, and trying to figure out how to unify it,” Stripe co-founder Patrick Collison explained in an interview. The problems inherent in trying to make that happen are that first, it’s hard to even make it possible to accept all the various payment methods available in the U.S.; second, expanding internationally involves dealing with very different financial regulatory systems; and third, when you look at the various payment methods that are popular in international locations, they vary tremendously and delivering better support is incredibly difficult.
Stripe wants to address all three of those problems, and expanding to new markets is a key component of the unifying strategy it wants to build to address all of those problems and enable anyone, anywhere to buy almost anything. Canada made sense as a first attempt because it’s very similar in terms of culture to the U.S., and also because the opportunity there was huge. In talking with Canadian e-commerce company Shopify, Collison said it became apparent that there was a need for a disruptive online payment gateway in Canada, and in fact such a solution was long overdue.
“We heard from Canadians all the time, and I think that was in large part because the options that are available to Canadians are sort of problematic,” he said. “We started a beta program earlier in the summer with Shopify, Tarsnap, MetaLab and about 100 other businesses. We’ve been testing it with those and refining it such that what’s launching today is the real deal: Any canadian business or individual will be able to begin accepting payments instantly.”
Stripe is bringing the same fee structure it already offers to Canada, a basic 2.9% plus $0.30 on every successful transaction. That’s bound to be a breath of fresh air for Canadian businesses used to dealing with the established players in the space; Moneris, for instance, was recently investigated for its fee practices, and charges a varied rate depending on a number of factors – basically the opposite of Stripe’s no-nonsense approach. Collison said it was actually relatively easy to work with Canadian financial institutions to make this launch possible, and it seems like the bad behavior of the existing industry leaders could be a big reason why. One thing’s for sure: Stripe should have no shortage of allies in helping its service gain traction here in Canada.