Stripe’s mission is to grow the GDP of the internet.
The core idea behind the company—one they endeavor to take very seriously—is that we’re still early in the journey of software-driven innovation, and Stripe is “an applied exercise in thinking through some of the corollaries of that.”
In particular, thanks to the new possibilities afforded by the internet, Stripe believe that putting better—more global, easier to use, more flexible, faster, cheaper—economic infrastructure in “the hands of companies and entrepreneurs will lead to a more
vibrant and prosperous world.”
Notably, this journey was still in its infancy when Stripe launched in 2011.
Thirteen years, and more than “a doubling in internet users later, it’s still early. The world of 2034 is going to look very different.”
Collectively, the businesses running on Stripe “passed the milestone of $1 trillion in total payment volume in 2023, up 25% from the prior year.” (US e-commerce, an imperfect but useful comparison, grew 7.6% last year.)
At $1 trillion, the output of businesses that run on Stripe sums to roughly 1% of global GDP. (Most Stripe users sell so-called “final” goods, which are those that count toward GDP.)
Stripe was robustly cash flow positive in 2023 and “expects to be again in 2024.”
This threshold is important, because it allows them “to invest for the long term, building what they believe their users need 10 years from now, without regard for the natural volatility of capital markets.”
In addition, Stripe customers can be confident that they “provide stable, long-term infrastructure with a durably sustainable business model.”
Online payments is, among other things, a conversion optimization problem.
This is very different from in-person payments.
Imagine you go eat out at a restaurant: you first consume the service, and afterwards you’ll figure out payment no matter how hard or easy.
Even the most laborious payment experience is “easier than washing dishes for the rest of the night, or being pursued by a spatulabrandishing waiter.”
Online, things are different.
People increasingly flit around the web in the fissures “between other tasks, and they very rarely have to complete a purchase. In the face of hurdles—extraneous form fields, labyrinthine authentication processes, broken mobile flows—your competitors or just funny TikTok reels are both a mere swipe away.”
While that assuredly involves cases where there “was never actually an intent to purchase, it’s clear that there’s significant deadweight loss.”
Stripe obsess over eliminating barriers to internet purchases. Their optimized checkout suite now includes over 100 optimizations, “from the very large to the very small.”
Even the smallest tweak to fine-tune the checkout experience “benefits from Stripe’s economies of scale, since we can amortize the fixed costs of complex improvements across more than a trillion dollars of transactions.”
As reported recently, Stripe says it supports Apple Pay Later, which allows clients to pay for items up to $1,000 during a span of six weeks.
Apple Pay Later is a buy now, pay later or BNPL service that’s backed by Apple and enabled via the global Mastercard network. It enables clients with solid standing to pay for items between $75 and $1,000 during a period of six weeks in four flexible and equal payments.
Stripe is among the latest payments platform to add Apple Pay Later. It is supported by default for merchants that take Apple Pay.