Stripe Lands Apple in Quest for $720 Billion in Payments

Patrick Collison, co-founder and chief executive officer of Stripe Inc., 

Apple Inc. (AAPL)’s list of partners for its new Apple Pay service reads like a Who’s Who of the payments world, including Visa Inc. and First Data Corp.

Then there’s Stripe Inc.

Getting included on Apple’s list was a coup for the five-year-old startup, which will enable mobile applications to work with Apple Pay. It’s the latest success for Stripe, which is also powering an e-commerce feature for Twitter Inc., working with Alibaba Group Holdings Ltd.’s Alipay, and helping thousands of other companies process online and mobile payments.

The challenge for San Francisco-based Stripe is fending off EBay Inc.’s PayPal and traditional financial companies that are barreling into mobile payments. The burgeoning market -- with global spending on commerce via handheld gadgets set to reach $720 billion in 2017, up from $300 billion this year, according to IDC -- has brought on a crowded field of competitors.

“We’re hugely excited about the Apple announcement, but this is just another step along the way,” said Patrick Collison, 26, who along with his brother, John, 24, founded Stripe in 2009.

Stripe’s partnerships with Apple and Twitter now catapult it onto a bigger stage, cementing its elite spot among Silicon Valley startups. In a sign of its trajectory, the company, which is widely regarded as a potential initial public offering candidate or acquisition target down the road, landed a $1.75 billion valuation this year, up from $100 million less than two years ago.

Standing Out

At first glance, Stripe doesn’t look too different from other payments startups. The company offers processing services for online and mobile transactions, which customers such as ride-sharing provider Lyft Inc. can integrate into their apps. Stripe typically takes a 2.9 percent fee, plus 30 cents, of each successful transaction.

Yet Stripe stands out from rivals for the amount and ease of code it offers, which lets software programmers quickly incorporate the payment features into their apps. Stripe lets businesses start processing credit-card payments in 139 different currencies, bank transfers, bitcoin and Alipay in less than five minutes, according to the company.

“They execute very quickly on new features, and they’re always ahead of the curve,” Lyft Chief Executive Officer Logan Green said. He said his San Francisco-based company began using Stripe in early 2013 and liked how it could automate features such as proving the validity of charges that consumers don't immediately recognize.