What is Stripe? The financial software you don’t even know you’re using

if you're watching this video from somewhere in the western world chances are you've made a purchase through stripe during the last few months without even realizing it it's the payment platform that powers the likes of amazon google and uber and is currently used by over 100 000 websites globally processing more than 100 different currencies but what does stripe actually do and how did it become so popular here's how it happened founders stories don't come much more humble than stripes brothers patrick and john collison grew up in the rural hills of the republic of ireland the pair showed a natural aptitude for science during their time at school with patrick winning an award for the best young scientist in ireland at the age of 16 and john attaining the highest ever score in the irish school's leaving certificate patrick enrolled at mit in 2006 and was followed to massachusetts by his brother who began studying at harvard two years later during their time in the us they co-founded automatic a software to help ebay sellers manage their listings and inventory on a large scale after working on it for just ten months they sold the business for five million dollars in 2008 to canadian firm live current media while the brothers were aged just 19 and 17. they both resumed their studies all the while collaborating on their next ambitious project but throughout every idea they came up with the biggest stumbling block proved to be monetization or how they could most seamlessly collect payment for services they were designing paypal seemed to be the best solution but it was better suited to individual domestic payments and less so to mass scale projects new and smaller businesses were simply struggling to collect payment for their products the fruits of their labor came in the form of seven lines of code that could be integrated into any app or website and instantly handle payments from customers the brothers pitched their idea to several investors but confidence in financial technology was low following the 2008 financial crisis and the public seem to have lost faith in new potentially high-risk ideas luckily patrick and john were able to secure a meeting with paypal founder peter thiel explaining to him how their payment platform would better paypal and he consequently invested two hundred thousand dollars stripe launched publicly in 2011 and quickly became a godsend for startups around the world some of its very first customers included lyft and shopify which provided a steep learning curve as stripe and its partners began to grow at an astronomical rate but what actually is stripe the platform describes itself as a full stack payment processor which basically means it allows website owners to accept debit and credit cards from anyone in nearly any currency its advantage over paypal is that users don't need to create an account all they need is their payment card ready to go the downside is that these payments can take up to two days to process whereas paypal is able to transfer funds instantly stripes basic pricing is set at 2.9 percent of each transaction fee plus 30 cents positioning itself neck and neck with paypal over the last few years the company has received significant backing from some of the biggest players in the vc world including sequoia founders fund general catalyst and google ventures the firm has also made several investments of its own acquiring stakes in financial businesses across the globe these include philippine fintech firm paymongo and british startups rapid and monzo stripe is also sinking its claws into the most lucrative market in the world the united states the company has led funding rounds for assembled a firm that helps businesses upscale their customer support services and fast which is focused on providing one-click purchasing to every website on the internet stripe often describes itself as a white label service as their flexible apis enable customers to fully customize the payment experience and build a custom user interface after obtaining a valuation of 35 billion dollars last year the company is well on its way to catching up with paypal and becoming the new global face of online payments and that's how it happened thanks for [Music] watching you

Channel: How It Happened

Views: 39,726

Keywords: stripe, stripe payments, stripe connect, stripe vs paypal, stripe IPO

Id: EwBkiVZuLn4

Length: 4min 33sec (273 seconds)

Published: Thu Dec 31 2020