In what has already been a strong year, major payments fintech Stripe is closing out 2020 with two big announcements. The first announcement indicates the company’s plans to make a banking-as-a-service play, the second shares the unicorn’s strong intentions to expand in the Asia-Pacific region.
It appears that the only way for Stripe is up this year after recent speculation that the company is coming up for an almost $100 billion valuation soon. No doubt this has bolstered the fintech superstar’s confidence to expand in Asia. In 2020 alone, it was reported that the company’s hiring in the region increased by 40% after having established its Asian headquarters in Singapore in 2016. Malaysia’s online companies received Stripe’s entire product stack shortly after in October 2019. 2020 saw the company launch its interbank transfers pilot in Indonesia.
Stripe’s business head for Asia Pacific, Noah Pepper, shed light on some difficulties with the region “[Asia Pacific] is not just the world’s fastest growing market, but it’s such a fragmented market...with different laws, languages, currencies, and in some cases currency controls.”
Regardless, he also confirmed that the company is seeking to recruit engineers in Japan, China, and Southeast Asia. This, combined with a number of job postings in those countries appearing recently on LinkedIn, makes the company’s intentions clear. Despite this, Pepper conceded that Stripe will face negotiating a varied and unfamiliar regulatory landscape.
While growth in Asia looms on the horizon, Stripe has concurrently brought in a series of big banks to back a new banking-as-a-service API. This new offering will enable online businesses to embed financial services in their platforms, allowing ease of sending, receiving, and storing funds. Importantly, this service will slash any red tape associated with opening business bank accounts. Stripe has shared that more functionality will be made possible in the coming year as its partnership with Goldman Sachs matures.
Speaking on the Goldman Sachs partnership, Hari Moorthy, Global Head of Transaction Banking at Goldman Sachs stated, "Together, Stripe and Goldman Sachs are focused on relieving the frustrations internet businesses find in making banking work for them. The millions of ambitious, fast-growing businesses in the Stripe ecosystem will soon discover a dramatically improved end-to-end digital banking experience." Citibank and Barclays have been named as global expansion partners as well.
Stripe’s head of banking and financial products affirmed that the company will be focused on catalyzing change with the fact that business banking has fallen short despite technology’s effectiveness in transforming online businesses in other respects. As an early indicator of success, e-commerce marketplace Shopify has already taken advantage of the API. Shopify merchants will now be offered interest-earning accounts eligible for FDIC insurance in minutes under Shopify’s new aim to offer its merchants a business account built specifically for them.
These latest announcements underscore that not only has Stripe come a long way since changing payments a decade ago, the fintech is now likely to become a one-stop-shop for the internet’s financial services needs globally.