Stripe is adding a charge card program to its commercial issuing product. This will allow businesses to give their customers virtual or real cards that they can use instead of the money in their accounts.
Since Stripe Issuing came out in 2018, platforms and fintechs in the US, the UK, and the EU have used it to make more than 100 million cards.
But until now, Stripe cards could only be used to spend money from an account that had already been loaded with money. By adding charge cards, platforms can give these same users access to credit. This gives them new ways to make money and gives their customers new ways to finance their purchases.
Stripe points to a recent poll by Goldman Sachs that found 77% of small and medium-sized businesses were worried about getting financing.
But, says Stripe, it’s hard to build a credit service from the ground up because platforms would have to do things like collect payments, handle lending compliance, and figure out licensing requirements. This is true even though there is demand and benefits for providers.
The charge card program takes care of these problems right out of the box. It provides funds flows, network links, printing, and integration APIs. It also makes it easier to comply with regulations, work with banks, and keep track of accounts.
Platforms don’t have to pay for the transaction right away. Instead, they can send money to Stripe after the payment date.
Denise Ho, head of product for BaaS, Stripe, says: “Our new charge card allows fintechs and SaaS platforms to provide access to a reliable source of credit for the many small businesses they work with.”
In the US, Ramp, Emburse, Karat, and Coast are already using the test version of the service. The UK and EU will soon be able to buy it.
“Building a charge card program is a daunting task. Stripe provided immense value in planning and launching our program quickly, with a compliance-first design that we’re confident can scale to meet Ramp’s needs,” says Michael Cohen, VP, partnerships, Ramp.
