Why Visa Chose Stripe

The news that Visa is aligning with Stripe – both as an investor and as a strategic partner – is the kind of news that can shake up the payments industry. No doubt that the deal is a coup of sorts for Stripe, which now counts among its investors two (American Express and Visa) of the “big three” credit card networks.   

As has been widely reported earlier today (July 28), Stripe will use the Visa partnership, and the investment (as yet undisclosed), to ramp up its international expansion, especially in emerging markets. Access to Visa’s issuing and acquiring partners will certainly give the startup scale, and quickly. In addition, according to the release from Visa and Stripe Tuesday, Stripe will also be able to utilize Visa security offerings such as tokenization, further expanding the scale and reach of a capability important to Visa in protecting the integrity of cardholder data in a digital world. 

Visa and Stripe will jointly focus on eCommerce, with features including “buy buttons” and other developments as yet unnamed. So we’ll start seeing technology announcements down the road.

But the question — amid headlines swirling around Stripe’s venture cap and card backers and $5 billion valuation – remains: What’s in it for Visa?

Before the news broke, PYMNTS had a chance to ask (via email) Jim McCarthy, who serves as Visa’s EVP of innovation and strategic partnerships, those very questions.  

PYMNTS: Why Stripe? What capabilities did they provide (and therefore others didn’t) that you found appealing enough to make such a commitment?

JM: Stripe is particularly strong in creating great tools for developers to onboard merchants instantly and easily. This partnership gives Stripe the ability to connect to Visa’s network capabilities via APIs and SDKs for their developer community to access our payment and risk management services.

Visa seeks to invest in organizations that are focused on merchant top line goals such as growing sales and customer loyalty, which are consistent with Visa’s goal of changing the dialogue with our merchant partners.

PYMNTS: Is it your expectation that this partnership will help to accelerate the acceptance of Visa Checkout?

JM: We look forward to collaborating with Stripe in the future and expanding its offerings of Visa solutions, including Visa Checkout.

PYMNTS: Can you provide a few examples of the “expanded set of capabilities” that “will be made available to the developer community and the payment ecosystem worldwide?”

JM: Visa will work with Stripe to bring new experiences to online merchants via new developer tools, helping them offer their developer community access to payment and risk management services, Visa’s tokenization service and security technologies.

PYMNTS: And, I am sure you won’t say, but I’ll ask anyway — how much of an investment was made?

JM: You are correct; as per our corporate policy, we are not disclosing the amount of investment.

 And much more to come, we’re sure.