Image Credits: Daniel Acker / Bloomberg / Getty Images
The major financial infrastructure company unveiled a fresh charge card initiative today, called Stripe Issuing. Denise Ho, Head of Product for BaaS at Stripe, exclusively shared the news with TechCrunch.
Stripe originally launched its Issuing product in 2018, enabling companies like Shopify and Ramp to issue over 100 million cards in the US, UK, and EU. It has become one of Stripe’s fastest-growing products, facilitating half a million transactions daily. Fintechs such as Klarna have built their businesses on it.
Previously, Stripe-issued cards were limited to spending from a prefunded account. The expansion into charge cards now allows companies to create and distribute virtual or physical charge cards, enabling customers to spend on credit rather than using their account funds.
Denise Ho stated, “Among our suite of products, Issuing has been doing really, really well. The No. 1 top demand within issuing has been the ability for Stripe to enable our platforms to offer credit to their users.”
This move benefits Stripe in two ways: it creates a new revenue stream and provides additional financing capabilities to their customers at minimal operational cost.
Platforms using Stripe Connect can now offer white-labeled products, including financial accounts, working capital loans, and charge cards. Stripe Issuing handles the core components of the charge card program, such as funds flows, network connections, printing, and integration APIs, while also streamlining compliance, bank partnerships, and ledgering.
The charge card program is currently being used by Ramp, Emburse, Kara, and Coast, with beta availability in the US. Stripe plans to launch charge card programs in the EU and the UK in the near future.
Stripe partners with startups to guide them through the process, ensuring compliance and risk oversight to avoid potential issues. Underwriting decisions are ultimately owned by the clients, with Stripe assisting in policy formation and compliance.
While clients may desire more autonomy in underwriting over time, Stripe will work on providing additional modules as it further develops its offering.
Anyone can sign up for the new program, even if they are not currently a Stripe user. Stripe generates revenue through interchange fees and will benefit from increased volume and spending by customers. Compliance fees are also associated with the program.