Payments start-up Stripe is making waves in the US following a $20 million investment from big names like Sequoia and early Facebook investor Peter Thiel. The financing round values the company at almost half a billion dollars.
According to TechCrunch the company co-founded by Limerick brothers Patrick and John Collison is “growing like Square” [Jack Dorsey's payments firm]. Stripe aims to streamline the process of building a payments system and is a direct competitor to PayPal. Despite this, three of PayPal’s five co-founders have already invested in the company.
The company’s product allows developers to take payments without having to set up their own merchant bank account or store credit card details. Instead, Stripe keeps the data secure and complies with anti-fraud regulations.
The Stripe API is said to be popular with developers as it is easy to integrate with. “For us the real advantage of Stripe is that it makes payments so easy to implement it changes the types of products we can build,” says Xamarin founder Nat Friedman on why he chose the product over competitors. Foursquare’s Jason Liszka likes Stripe’s system as it saves them the time and hassle of cumbersome financial transactions. “Stripe’s API abstracts away all these complications and lets us focus on our core business,” he said.
The simplicity and flexibility of the young company compared to larger competiros seems to be winning it a lot of fans. “We’re building the economic infrastructure for the Internet.”, said Patrick Collison. At the moment the startup charges a base 2.9% fee + $0.30 for every successful transaction, and unlike other systems has no other surcharges or monthly fees.
Patrick (23) and John (21) Collison reportedly came up with the idea for Stripe whilst they were on a college holiday in South America. John studied Physics at Harvard whilst Patrick is an MIT mathematics graduate. The brothers already have a successful track record in the technology industry having established Auctomatic, a company that manages inventory for sites like eBay, before selling it for a reported $5 million in 2008 to a Canadian firm.