Financial services company Stripe has rolled out credit cards for customers to enable fintech to create and distribute credit cards for customers, providing new revenue streams and giving easier access to capital for small businesses.
Stripe revealed that this service will allow other fintech platforms to create virtual or physical cards that customers can spend on credit, rather than funds in their account.
Speaking on the rollout of the card, the Head of Product for BaaS at Stripe Denise Ho said,
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“Whether a small business is just starting or looking to expand, access to capital can make all the difference. Our new charge card allows FinTechs and SaaS platforms to provide access to a reliable source of credit for the many small businesses they work with”.
Stripe stated that these cards will provide new revenue streams for platforms and provide smaller businesses with easier access to capital. Also, the new service will remove some of the challenges other platforms would face in developing their credit offerings, such as repayment collection and licensing requirements.
The fintech’s charge card scheme will offer adjustable settings, so businesses can set individual credit limits and repayment schedules. The program runs on Stripe Issuing, which the company claims already supports around half a million transactions per day.
The charge card offers will be linked with other Stripe services, as platforms will be able to use features like Invoicing and Checkout when they need to collect repayments.
While supporting the finances of small businesses, Stripe said this scheme will also make funding easier for platforms offering credit, as funds issued out can be sent back to Stripe after the transaction settlement date.
Also, businesses can set individual credit limits and repayment schedules, including flexible weekly, monthly, or set-day repayment options. When businesses need to collect repayments from customers, they can use Stripe’s suite of products, including no-code and embeddable options like Invoicing and Checkout.
The charge card program also provides flexible funding options for platforms. Once a card is used to purchase, the transaction must be funded. Most charge card programs require the platform offering the card to cover the
transaction immediately, which forces platforms to maintain large cash balances.
For its part, Stripe will make money off interchange fees, so as customer volume grows and users spend more, the financial giant will earn more.
Launched in 2011, Stripe has been investing in global payments and treasury networks to help solve the pain point for ambitious, global platforms and marketplaces that want to connect retailers with consumers. The financial giant’s remarkable offering has seen Millions of companies of all sizes from startups to Fortune 500s, use Stripe’s software and APIs to accept payments, send payouts, and manage their businesses online.
Stripe makes moving money as easy and programmable as moving data. Also, users can use Stripe not only to accept payments but also to quickly support new markets, upgrade existing systems and tools, go direct-to-consumer, and engage customers with subscriptions and marketplaces.