Payments Disruption and Stripe
The rapid growth in digital economies has created demand for more robust payment platforms. Factors influencing demand include needs to transform outdated financial infrastructures, decrease fraud, reduce complexity in online markets, grow international transactions, integrate with partner applications and create easier check-out experiences for consumers. Firms are now forced evolve how they think about conducting business in multisided online markets – transacting payments across markets and currencies – which have become more complex and highly regulated. There need for more innovative payment solutions is clear and this has inspired greater competition. Differentiating factors in the future of payment gateways include greater discipline in human-centered digital design, cross-platform integration, and increasing the speed at which new customers can be onboarded.
Stripe is an end-to-end payment platform that has made significant innovations in cross-border payments, digital commerce check-out, and payment fraud prevention. The payments technology space is highly competitive, but Stripe has out-innovated and grown faster than its competition. In terms of breath of payment offerings, Stripe’s are the most transformational and broad. Their platform offers well documented APIs, multi-sided marketplace connections, fraud identification using machine learning, recurring payment processing for subscription based businesses, and advanced payment analytics. Stripe’s success in offering payments technology have position them to move into more traditional banking business, now offering loans and credits cards. The rapid growth in ecommerce has small firms looking for improvements in payments speed, user experience, and security and Stripe has delivered innovation in each area.
For a firm with high growth (62% total headcount growth – 2019), Stripe has maintained a decent retention rate (12% attrition – 2019). With more than half of the firm’s roughly 2,000 employee located in San Francisco, their growing international business had Stripe hiring in Europe (mostly in Ireland). In terms of notable talent flows, Stripe has successfully pulled teams from Google, Facebook, and Amazon, while not losing great numbers to any one major competitor. Early employees of Stripe who are just starting their careers are open to hearing about external opportunities, but competing firms struggle to meet candidate expectations on culture and compensation. As Stripe’s market share continues to grow, so do external investments. Increased pre-IPO values will help Stripe’s retention rate, making it more difficult for competitors to acquire the firm’s innovators.