Merchants and online platforms have a user interface problem.
Will Gaybrick, president of Product and Business at Stripe, told Karen Webster that pain points at checkout are hampering online conversions, translating into lost revenues. The customer wants a better experience, while the merchant enabling that experience wants the conversion, of course.
For Stripe, enabling payments acceptance itself is the low-hanging fruit that leads to additional monetization opportunities as the continuing transformation of the digital economy means that apps and platforms are expanding into commerce ecosystems.
In the bid to help those merchants drive high conversion rates, he said, “it’s all about helping users model and orchestrate complex commercial systems that are highly regulated.” The rise of embedded payments has changed the ways in which merchants and platforms — and providers including Stripe — can monetize a host of services surrounding the transaction itself.
“It’s a boatload of work to manage multiple payment methods,” he said, “and it’s a huge amount of work to integrate them, to manage reconciliation flows and to build new front ends.” Consumers still struggle with drop down menus, having to input card details and expiration dates … and often walk away before the transaction’s done.
Gaybrick’s perspective has been honed by a career that includes nearly eight years with Stripe — starting as CFO, then CPO and a stint as head of payments before settling into his current role, leading the product and engineering teams. As he mused to Webster, “one thing about payments and financial infrastructure in general is that it’s all highly multidisciplinary … it takes a village to create the products that our users want.”
Stripe, he noted, has come a long way from its initial innovations centered on self-servable APIs and a focus on payments processing. The company’s reach has expanded into dozens of products that now include billing systems and fraud protection while supporting local acquiring and roughly 50 payment methods across dozens of countries. In doing so, he said, payments, and the services surrounding those payments, can be monetized by Stripe’s corporate clients amid a slew of use cases.
Against that backdrop, he said, payments no longer can be thought of as a commodity — instead, we’re well into a great re-bundling of offerings that improve consumer-facing user interface and streamline back-office flows behind the scenes.
It’s not enough to just provide the proverbial “pipes” that enable ISO messages to be sent to Visa or Mastercard, he said. Providing payments functionality now extends upward into the user interface (UI) layer, he said, offering up Stripe’s Payment Element as an example. That UI “component” accepts several dozen payment methods and enables enterprises to embed those payment methods into their consumer-facing front ends.
“We intelligently ‘order’ the payment methods based on which ones are most likely to convert for that session and for that consumer,” he said. Enterprise clients that have adopted Payments Element to show and allow a variety of payments (digital wallets among them) have seen their revenues grow by around 10%, he said.
Gaybrick pointed to Stripe Connect, which he noted marked a “key moment in Stripe’s history” nearly a decade ago. The APIs, he noted, have helped platforms and marketplaces design end to end payments experiences and facilitate payouts — where Lyft can send money to drivers and Shopify can craft “Shopify payments” for its users.
At a high level, he said, a Stripe account becomes far more than a repository of money.
“It’s not just about accepting money — it’s about managing money in the cloud,” he said, which in turn gives Stripe the on-ramp to offer value-added capabilities around the payment itself.
He noted that network tokenization has become a priority for the payment networks, and can have a powerfully positive effect on conversions. But not every issuer has implemented tokenization. Stripe, he said, can “dynamically make a choice” for platforms and merchants as to whether they should process the “raw” account number or use a network token.
“These are tiny little optimizations that increase the likelihood of conversion by just a few basis points,” he said, “but those basis points add up to … multiple percentage points of revenues.”
Webster noted that B2B commerce continues to move online, and there’s a burgeoning desire for buyer and suppliers to jettison paper based, analog processes. There’s ample opportunity, said Gaybrick, for commercial transactions, and money movement, to move across digital conduits.
“One of my adages here,” he said, “is that everybody has a billing system — and nobody likes theirs.” Stripe, for its part, has been boosting its efforts to modernize B2B commercial infrastructure, with “straight billing” functions that improve an enterprise’s collection of funds from customers so that back-office reconciliation (including taxes and country-by-country e-invoicing compliance) automated.
Looking out into the future, and with improved UIs, he said, “a decade out, we won’t be pecking numbers into online forms.” Stripe’s Link, he said, is helping move toward that more streamlined checkout, as it Link saves and auto-fills payment and shipping information, decreasing the time to fully “check out” by 87%. More recently, he said, Stripe has been allowing select merchants to accept bank payments with one click.
“One-click checkout — and maybe even ‘no-click’ checkout, with biometrics, is coming our way.” Elsewhere, there’s room for artificial intelligence (AI) to be fully harnessed to improve checkout, as large language models can create a “layer” above the hosted surface that curates product display pages on a per-session, per-consumer basis.
“There’s some promise here in flattening, and narrowing, the distance between discovery and purchase,” he said of AI’s potential.
The online storage of money, so that it can move seamlessly between platforms, customers and platforms, said Gaybrick, can unlock new economics for payments and commerce. That means being able to programmatically issue virtual cards tied to those stored accounts or underwrite fund flows between merchants and their sub-accounts, and unifying offline and online omnichannel experiences.
“We’re in the early days of thinking about what the core economics of the Internet’s infrastructure should be,” Gaybrick told Webster, “and we’re still in the early days of payments and online money movement enabling new business models.”