For years, the growth in e-commerce has outpaced the underlying payments technology. With an aim to simplify payments, US-based startup Stripe has emerged as a key player in the financial technology revolution in recent years, tackling the layers of intermediation in the payment rails.
Backed by heavyweight tech investor Peter Thiel and Tesla founder Elon Musk, the payments infrastructure company now enables businesses to receive payments in more than 130 currencies, supporting credit and debit cards, and alternative payment methods and mobile payments.
Stripe’s Chief Financial Officer and Chief Product Officer Will Gaybrick recently sat down with EJ Insight to explain how Stripe builds its infrastructure and helps millions of businesses in payments.
In the final part of the interview, Gaybrick talks about the startup’s latest participation in Facebook’s cryptocurrency initiative Libra, as well as other issues such as the so-called “Tech Cold War” and the new China-US conflicts involving tech giants like Huawei and Google.
Q: Since founding in 2010, Stripe has grown swiftly, driven largely by word-of-mouth between developers. How does this positioning work?
A: Our core audience and most important audience is software engineers, and we focus a whole lot on that audience, and it is heavily correlated with startups and technology companies; not just startups, companies with ambition, companies that want to leverage the Internet in a new way, in a powerful way, with a new business model.
It is also a very useful audience to have, because it is very demanding. They are always trying to push the boundaries and what is possible and asking for new things, and so we actually are the beneficiaries of a business model that does not require a lot of creativity, because our users are always asking for so much, so we can look years ahead, and things that we need to build for our users. It is a part of working with developers that is so powerful that they really push you, and then you build more products for them, and that part is leverageable across the entire user base.
We really focus on creating generalized infrastructure and products that are self-serviceable. And as we follow our users, they are leading us along several dimensions. One, as they grow increasingly global, Stripe is increasingly global. That’s both in terms of our product and our organization. Last year, we announced Singapore as our fourth global engineering hub, joining Seattle, Dublin and San Francisco. Our Singapore office is focused on primarily building completely new products, and to ensure that Stripe’s product suite works just as well in Southeast Asia as it does in Europe and North America.
Q: Amidst the anti-globalization forces and so-called “tech cold war” between China and the US, what is your take on the challenges in starting a business in the digital economy, as Stripe is expanding in the Asia market?
A: Things are getting more complex and fragmented every day. For one, barriers to international trade are resurging. Look no further than today’s headlines, tariffs are returning to some of the world’s biggest trade corridors, decades-old trade deals that set standards for the movement of goods and services are being questioned.
Regional differences and regulation are inevitable, [because] countries are different in their laws, cultures, histories and political climates. Barriers like these reduce the velocity of money on the internet.
We are at somewhat of a crossroads and the evolution of the internet. The answer to resolving this tension must be a global infrastructure that makes both global expansion and local compliance, not only possible, but even easy.
That is why in Stripe we are so maniacally committed to building core economic infrastructure for the internet. It is to accelerate the velocity of money and grow the GDP of the internet. It is to distribute the benefits of a globalized, internet economy more equally, making physical location, increasingly, irrelevant, as a determinant of success.
Q: As Facebook unveiled its cryptocurrency Libra this June, and explained how it is preparing for the public launch in 2020, we know that Stripe is one of the members of the Libra Association, which oversees the development of the token. What will Stripe do to boost the adoption of the new cryptocurrency?
A: I have a couple of things on this front. For one, it is very early days, the Association is just drafting the charter, and so the notion of… even what a founding member means is yet to be well-defined. For Stripe, our mission is to increase the velocity of money and the internet, and therefore to grow the GDP of the internet. And we think there is a lot of potential for Libra and other cryptocurrencies to do that. We believe in the mission of the economic access and financial access they are trying to create.
If Libra takes off, just like we support so many other payment methods, whether it is Alipay or WeChat Pay or others, there will be the Libra-based payment methods that we support, and we want to add them to our global payments and treasury network, so that is why we are involved in, and excited to see what happens.
Q: What is your view on cryptocurrency? Do you think there is a real market for retail purchases through cryptocurrencies? Would Stripe consider adding cryptocurrencies into its payment options?
A: Stripe has actually long been sort of deep in crypto. We were the first major payments company to support Bitcoin payments in 2014. But then we did deprecate it, right as it was peaking in price. The reason we did that is that, even though Bitcoin is useful as a sort of a store of value and an asset, it is not useful to payment method.
The settlement times are too slow, it was too expensive, it was actually subject to a whole lot of fraud, and so our users were not … so clamoring to use it. That said, we were a contributor to the Stellar Foundation, and Stripe has been supporting the Stellar Lumen (XLM) from early on. I think there are a lot of promises for cryptocurrencies, it is just a matter of… you know, what is the value to our users? That is what we always come back to.
So you can imagine a world in which there could be a lot of value in a global cryptocurrency, like Libra, they create economic access. But for Bitcoin, we did not see a whole lot of value.
To be honest, that is most of what I have on the Libra front, because it is just too early to say. I think one thing that will happen, no matter what, is that you will have to see any cryptocurrency complying with regulations. It will not be a way to skirt around regulators. There is now a bill in China to completely stop Bitcoin mining, and so this is… It is not going to be sort of a panacea for some of the centralizing forces of the online economy, but it may be a new driver of efficiency.
This is the second and final part of an interview with Stripe’s CFO and chief product officer.
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See also: How Stripe is building its payments infrastructure business