Facing more competitive pressure and a hit to its valuation, Stripe has made several moves in recent months to become a more valuable partner for small businesses.
Stripe in late April launched a revenue and finance automation suite, bringing together a number of products that handle recurring revenue, accounting, analytics and money management. Stripe has added individual products, including a tax application programming interface, which manages sales taxes for transactions on and off Stripe; it also updated its billing and revenue reporting tools to streamline processing.
The series of rollouts aims to keep the company fresh as small businesses become a larger target for payments companies, card networks and banks — and as the valuations of Stripe and many other fintechs have eroded in recent months.
"The job of finance at a company isn't constrained to the collection of money — it's about helping construct the business," said Vivek Sharma, business lead for revenue and finance automation at Stripe.
Small businesses have added more automation over the past few years to accommodate the expansion of e-commerce and to serve new consumers and suppliers outside of their home markets. Meeting those needs is part of Stripe's business model, and like most fintechs it's looking to recover
The overall goal is to provide more products to businesses that may be new to digital commerce, or new to cross-border selling.
This expansion doesn't downplay the importance of payments, Sharma said.
"Payments are becoming more important over time," Sharma said. "We are moving toward 24/7, or continuous selling of goods and services, and you need digital payments to build for that."
The new moves follow an earlier upgrade of Stripe's
"[With the new payment service] we're able to scale without needing to divert a ton of time or resources to building something in-house or closing our books," said Dan Giovacchini, co-founder of Tango, a software company that enables businesses or individuals to create how-to guides with screenshots. Tango, which uses Stripe for payments, billing and data management, said it was looking to combine payments with other functions.
"People still spend way too much time looking for answers on how to get unstuck on a task, and it's because processes are a mess," said Giovacchini, whose company has about 300,000 users. "If you're an organization, you're either trying to do 'more with less,' or your people are struggling to keep up with change and growth."
Stripe is diversifying its revenue streams to prepare for a future where payments are less profitable, according to Agustin Rubini, director analyst at Gartner.
"As payments technology advances and competition increases, margins on payments are likely to decrease," Rubini said.
This is because it will become easier and cheaper for businesses to accept payments. For example, in the telecommunications industry, WhatsApp has made it possible for users to send and receive messages for free, which puts pressure on communication service providers to stop charging for SMS messages, according to Rubini. "Technology will put pressure on companies like Adyen and Stripe as well as the banking ecosystem," Rubini said.
Plenty of other payment companies are similarly looking to build their services operations to gain new sources of revenue as stand-alone payments-acceptance technology becomes commoditized.
Visa and Mastercard both consider services to be a major pillar of their businesses, offering security, consulting and open-banking tools.
And dozens of
