Careers at Stripe
Stripe’s mission is to increase the “GDP” of the Internet – specifically, to expand online commerce by making it simpler to process transactions and run online businesses.
Young Irish brothers Patrick and John Collison already had impressive successes on their belt. Patrick had won “Young Scientist of the Year” at the age of 16, while John had received the top score ever by a student on the Irish Leaving Certificate, the final exam in secondary school. In 2010, Patrick was an MIT graduate, and John was enrolled in Harvard. They began discussing the challenges of accepting payments online, and brainstorming possible solutions. Over a six-month period they built a prototype for an online payment service. It initially partnered with a payments firm to carry out its operations. Within a short timeframe it garnered its first user, a company called 280 North.
In fall 2010 the brothers began working on the site full-time, with John as President and Patrick as CEO. They cut the payments firm loose, deciding it was best to control all aspects of the customer experience. The company received its first funding from seed capital firm Y Combinator, an amount in the range of $20,000 - $30,000. In summer 2011 they obtained an investment of $2 million from Peter Thiel, co-founder of PayPal, which was quickly followed by investments from other prominent firms. Soon, after having experimented with a variety of names, they settled on the moniker “Stripe”.
Stripe was officially unveiled to the public in September 2011. It was described at its most basic as a service that made it easier for merchants to set up accounts and accept payments. Its primary competitor was PayPal, and it largely differentiated itself from that service in the following ways: transaction processing that incorporates natively onto merchants’ sites (PayPal users are directed off-site to pay); a cleaner, well-documented, easier-to-use API; and the ability of merchants to transfer customer credit card data if deciding to switch to a different pay processor. The site grew rapidly, mostly through word-of-mouth as the founders did not have a significant marketing budget. Stripe now operates in 24 countries and is considered one of the top payment firms in the world.
Benefits at Stripe
Business model of Stripe
Stripe has a multi-sided business model, with two interdependent customer segments that are both needed in order to operate:
- Consumers: This segment consists of individuals, who can make purchases and set up recurring payments.
- Merchants: This segment consists of businesses, who can accept web and mobile payments from consumers.
Stripe offers three primary value propositions: price, accessibility, and convenience.
The company charges a flat rate for all transactions from accounts that do less than $1 million in volume a year – 2.9% plus $0.30. It does not include add-on fees such as those for failed transactions, cross-border payments, recurring payments, refunds, or American Express card usage. This feature saves customers lots of money in the long-run. PayPal, in contrast, charges many of these fees.
The company’s service is widely accessible. There are dozens of websites that allow customers to accept and manage payments with Stripe. Also, it supports over 100 currencies, as well as a variety of payment sources including Android Pay, Apple Pay, Alipay, Amex Express Checkout, and Bitcoin.
The company offers many features that make the site highly convenient to use. It enables merchants to set up an account in mere minutes, compared to days for other providers. Its API is quicker to integrate than competing offerings. It offers Stripe Checkout, a customizable offering that provides templates that customers can use to design payment forms, so they do not have to do it from scratch. At processing time it does not redirect off-site for consumers to pay. Lastly, it allows merchants to migrate their consumers’ credit card data if they decide to switch pay processors.
Stripe’s main channel is its website, through which it markets its offering and makes it available for use. It also offers a mobile app, Stripe Dashboard, through which customers can access the service; they must already have an existing account through the website.
Stripe’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees.
The site offers a Help section with answers to numerous potential questions. That said, there is a personal assistance component as users can contact support staff through an e-mail form.
Stripe’s business model entails maintaining a common platform enabling transactions between two parties: merchants and consumers. The platform includes its website and mobile apps.
Stripe’s partners consist of the dozens of companies that enable customers to accept and manage payments using its service.
These include firms in the following areas: Accounting, Analytics, Booking & Ticketing, Card Readers & POS Systems, CRM, eCommerce, Electronic Signature, E-mail Marketing & Dunning, Financing, Form-Building & Software Tools, Fundraising & Marketplaces, Gift Certificates, Installments, Inventory Management, Invoicing, Mobile Payments, Notifications Recurring Payments, Referral Marketing, Relay, Shipping, Transaction Monitoring, and User Management.
Stripe’s main resource is its proprietary software platform, which connects merchants and consumers. As a relatively new startup, it depends heavily on financial resources from investors. As of 2016, it has generated $280 million in seven rounds of funding from 18 investors, who include Sequoia Capital, General Catalyst Partners, Founders Fund, and Thrive Capital.
Stripe has a cost-driven structure, seeking to reduce expenses through significant automation and low-price value propositions. Its biggest cost driver is transaction expenses, which largely consist of the costs incurred to accept a customer’s funding source of payment. Other major drivers are in the areas of customer support/operations and sales/marketing.
Stripe has two revenue streams, which are as follows:
Transaction-Related Revenues: The company generates income from the following:
- Pay-As-You-Go – Fees for individual transactions, which are 2.9% plus $0.30
- ACH and Bitcoin Payments – Fees for these are 0.8%
Service-Related Revenues: The company generates income from the following:
- Connect – This feature offers benefits such as support for ID verification and tax reporting; fees go up to 0.5%
- Atlas – This feature offers support for various actions, including incorporating a firm in the U.S., obtaining guidance about U.S. tax law, and accessing tools from Amazon Web Services; while not yet widely available, it will cost $500 once so
info: Patrick earned a degree from MIT in 2010, having enrolled at age 16. Prior to co-founding Stripe he co-founded Auctomatic, a marketplace and auction management system. The company was sold to Live Current Media for $5 million.
info: John studied Physics at Harvard University. Prior to co-founding Stripe with his brother he co-founded Auctomatic, also with Patrick, which originally began its life as a firm called Shuppa in Ireland.
info: Claire earned a Bachelor’s degree from Brown University and an M.B.A. from Yale School of Management. Prior to joining Stripe she held various management and VP positions at Google, including Director of Consumer Operations.
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