Payments company Stripe is today unveiling a new product designed to help marketplaces like Lyft or Kickstarter scale internationally, by offering a suite of tools that allow businesses like these to accept payments from anywhere in the world, and then ensure sellers and service providers get paid. Called Stripe Connect, the product will help speed up the time it takes a marketplace to expand in a new region, making it possible to sign up new sellers in a matter of minutes, Stripe claims.
The new product is not to be confused with “Connect,” Stripe’s first product for store builders. Instead, Stripe Connect is focused on addressing the needs of online marketplaces – something Stripe says came about thanks to its experiences working with thousands of these sorts of companies, which has helped it to understand the challenges they face.
Current Stripe customers include a number of related businesses, and, at launch, the company has already signed up Kickstarter, Lyft, Indiegogo, TaskRabbit, Spring, Twitter, Fancy and Reserve as the first to use Stripe Connect.
With Connect, Stripe handles the security, compliance and ID verification requirements specific to each country. The service is currently available in the 18 countries where Stripe is live, and offers its customers the ability to customize the payments experience to fit their particular business needs. For example, businesses can choose when and to what kind of accounts payments are made, and how much the individual buyers and sellers on a given marketplace can see regarding the details of the payment process.
Additionally, the service allows marketplace operators to change their business models at any time – something that could prove to be a competitive advantage in these growing, and rapidly changing, industries. On-demand transportation companies, for instance, often have to quickly adapt to various regulatory changes in the markets where they operate. Or sometimes, they enter markets with a business model that’s designed to help them quickly grow their market share, with plans to switch over to another model once they’ve established themselves as the leading provider.
Sometimes, however, the businesses are simply trying to open up additional revenue streams which would have otherwise required them to rebuild their financial backend from scratch. And at other times, businesses just want to provide a localized experience in a given market without the hassles involved with doing so.
Explains Stripe, with Stripe Connect, marketplaces don’t have to process all payments through a centralized geographic hub, which involves dealing with currency conversions and higher costs, nor do they have to establish a local entity in each country they operate. Instead, Stripe Connect steps in to handle the sending and receiving of payments in the local currencies wherever the businesses’ buyers and sellers are located.
The new product is priced at 0.5 percent of volume paid out to sellers and is relatively quick to set up, too, Stripe tells us. While it depends on the implementation, some of these can be configured in as little as an afternoon, the company says. Larger marketplaces making the switch to Stripe will take more time, of course.
Stripe Connect is initially available to marketplaces in the U.S. and Canada, but will roll out to marketplaces headquartered in other regions in the months ahead.