The Silicon Valley payments giant is expanding its offering. Stripe allows businesses and websites to easily accept money online. Now, the start-up wants to help them spend that money with its new credit card issuing API.
Stripe’s next venture, which should be announced Thursday, will allow businesses to make payments and control expenses.
“We’ve tackled many of the major problems on accepting payments, but businesses still have trouble moving money,'' said Lachy Groom, head of the new Stripe Issuing division. “We realized we're staring at another Stripe-sized hole in the payments economy.”
The company refused to reveal any of the partners it has been testing the product with, stating that there are dozens. However, examples of how the product is currently used or could be used were given. For example by a car-sharing company to manage and track gas purchases made with its fuel cards. Another example would be to give contractors a one-time virtual credit card number, which is set to only approve transaction for a predetermined amount and store. In another instance, manager could set dynamic budgets for their sales teams’ expense accounts, rather than approving dining purchases later.
Stripe charges a small transaction fee for each payment made with the cards and shares some of that revenue with the companies when they use the cards — in the form of cash back to the employer, for example. The physical cards will be customized with the employer’s logo. Printing and distribution is to be handled by Stripe, for a separate fee.
The new business will function through the card networks of Visa and MasterCard. Stripe expects that while the new offering will drive some revenue through interchange fees, it will also help acquire and retain customers looking for one way to handle both accepting and making payments.