In today’s high tech world, shopping has taken on a whole new form. Shopping in stores has become almost obsolete compared to what it used to be just years ago. Most people do some, if not all, of their shopping online anymore. It’s easy, convenient and you can find just about anything and everything you need and want, right online and never have to leave your house. The day has come where you can purchase even your groceries online, and then have them delivered right to your door. Online purchasing means that merchants need a way of getting their money, and consumers need a way of making their payment. Of course, consumers want to be sure that their payments are getting there safely and their information is secure. They also want it to be as easy and uncomplicated as possible so that their online shopping experience is worth their time, when compared to making a trip to the store.
Stripe is a new online payment business that is taking the business world by storm. John and Patrick Collison are not only the Cofounders of the mobile payment sensation Stripe, they’re also brothers. They have created a way for hundreds of thousands of customers to make online payments using a simpler, more efficient way of completing transactions. The Collison brothers wanted to create a better way to make payments online to different vendors, and the platform they designed allows for a one-click payment process for the first time, as opposed to the well-known online payment processor that has been around since the 1990’s, the EBay-owned, Paypal.
The new version of Checkout, the Collison’s developed, allows for an embeddable payment form that can be installed on your desktop, your tablet or mobile phone. The updated version that differs from Paypal in that it allows customers to make payments without having to be redirected to another page or area in order to complete their transaction, eliminating time consuming steps. In the big scheme, and the bottom line is, that this latest version of Checkout that utilizes the one-click platform, is going to solve problems for merchants for the mobile payments they receive.
So how does Stripe work?
When a purchaser gets on the Stripe Checkout site from their phone, the customer’s asked for their credit card info which they will input. They will then be given the option if they want Stripe to hold onto it and remember for the future. Customers will also be asked for their phone number so that Stripe can send them a one-time-use SMS code that they’ll use to complete the transaction at checkout. After the initial visit, for subsequent purchases, no matter manner you get onto the site, computer, tablet or another mobile phone, the customer just enters their email address and another SMS code will b e sent to the phone number that is attached to the email address. From there, complete the purchase without having to re-enter the long credit card number all over again. Of course, not having to re-enter your credit card number is a great perk, but another is that you can shop from merchant-to-merchant and move across different sites to shop and still, your credit card info is already there.
The Collins’ brothers knew that simplifying purchase process and the system has already been installed on multiple thousands of different sites and it has already managed millions of different transactions. A few of the sites where this version of Checkout has already been installed with include, Dribble, WillCall, and Humble Bundle. It’s already been determined that by eliminating steps and simplifying the process of payment transactions, you’re creating a platform that is going to change the way people shop and purchase online, and not in a small way. This relieves a lot of problems for merchants and gives customers a much smoother experience for payments, especially when they are purchasing items from their tablet or iPhone.
How big has Stripe gotten so far?
As more and more companies catch on to this newer, more innovative way of making payments, including Apple, the word of this newest version of Checkout is going to Boom and will soon be the main way to pay online. Investors are already betting on Stripe and claim it will soon become the big powerhouse, leaving PayPal behind, and collecting dust in the outdated past. As a matter-of-fact, big name investors, such as Khosla Ventures, Sequoia Capital, as well as Peter Thiel’s Founders Fund, have all invested money into the new venture to the sum of $1.75 billion. They are confident this is going to hit mainstream, soon. Thiel was so convinced, he acted as an angel investor several years back, during Stripe’s start-up.
As of today, it has been determined that Stripe’s payment volume is running at about $20 billion annually. Like Paypal, Stripes does get a fee per each transaction run, charging 2.9% plus 30 cents. This is about the average of other payment businesses, Square being one of them, however, companies and volume purchasing customers will get volume discounts. With these fees in mind, this already boots Stripe’s profits to top $450 million. So how well is this company doing and going to do? Well, Stripes estimates that about 27% of Americans will have purchased something using the company’s Checkout platform at least one time over this past year.
Although the Collison brothers are seeing their venture turn the corner into one of the biggest technology developments in online purchases, they still operate with a hint of caution, stating that they are still in the early stages of accomplishing all the goals they’ve set for themselves.