Online Payments company Stripe has announced that it will soon be offering companies the ability to issue their own credit cards. According to the announcement, Visa and Mastercard will be the operating networks for the new service, which has been named “Stripe Issuing.”
The company describes the service as “an API for creating cards and new business models,” can be used to create both physical and virtual credit cards. Possible applications of the service were described as creating employee expense cards with customizable spending limits, or even “[running] the entire card stack for a new digital bank.”
Introducing Stripe Issuing: https://t.co/uFr4lY4mkJ
— Stripe (@stripe) July 26, 2018
Dozens of Partners Have Reportedly Tried the Service
Lachy Groom, head of the new Stripe Issuing division, told Bloomberg that “we’ve tackled many of the major problems on accepting payments, but businesses still have trouble moving money. We realized we're staring at another Stripe-sized hole in the payments economy.”
The company told Bloomberg that dozens of partners have been testing the product, although it would not name a single one.
If the service takes off, Stripe could take home a pretty penny indeed: the company will receive a small percentage of each payment made with one of the cards. Some of that percentage will be shared with the card issuers. For example, a trucking company getting cash back on a driver’s petrol purchases.
”New Use Cases We Haven’t Thought About Before Today”
Jordan McKee, an analyst with 451 Research, told Bloomberg that building a customized payment structure is such a complicated and expensive process that most companies don’t bother. “The complexity of that process has throttled the level of innovation we've seen on the issuing side,” he said.
“So I think with Stripe coming into the market and leading with a simplicity value proposition, over time we could see some new use cases we haven't thought about before today.”
Companies interested in the service are encouraged to request an invitation on the Stripe blog.
