Irish brothers John and Patrick Collison, the cofounders of Stripe.com, have been building what appears to be the easiest way for developers to embed and take payments from customers online without having to set up a merchant bank account or store credit card information.
This means that requirements for data protection and guards against fraud will no longer be part of the tedious steps needed to monetize. It’s a more intuitive and simpler process for a developer to get money for goods than PayPal or Google Checkout.
Stripe manages the financial transactions for their customers by taking in the money and then placing it in users’ bank accounts not unlike PayPal. The major distinction is that the service is not aimed at the buyers. Instead, Stripe.com gives the code to developers for free so they can embed this transaction capability into their site, receiving money only minutes after the addition of the Stripe code.
Even New York’s Museum of Modern Art now uses Stripe.
Corrientes and Esmeralda
It was while sitting in a café in Buenos Aires, Argentina that the pair received their first customer. Renting a space to live and work for one month, the brothers decided to go to Buenos Aires after reading Maciej Ceglowski’s blog idlewords in which Ceglowski spoke highly of the Latin American jewel of a city.
Deciding to rent an apartment and hack together in cafes for one month was what the brothers did during an icy Cambridge, MA winter. The notoriously hot and humid Buenos Aires summers had the pair hacking in the ubiquitous wi-fi enabled cafés of “Capitál” on a daily basis. So much so that they admit not having seen any typical tourist destination there.
Back in Boston and Beyond
Both had initially come to Boston to study. Patrick was at M.I.T. studying math and John was to study physics at Harvard although both eventually dropped out to pursue Stripe.
While competing with the likes of Google and PayPal, Stripe already attracted investment from PayPal cofounders Elon Musk, Peter Thiel, and Max Levchin. Just days ago it was announced that the total investment in Stripe reached $20 million which includes money from General Catalyst and Sequoia.
Now located outside of San Francisco, Stripe says that it currently holds 100,000 developer accounts with interest also coming from other high-profile online businesses.
Stripe’s payment model is structured as follows: It charges 2.9% + $ .30 for each transaction that’s successfully completed. There are no subscription or monthly charges. Stripe may change the game in a significant way.
Entrepreneur Mark Bao put in this way in a Hacker News thread, “Merchant accounts are a serious drag. I’ve opened a few and they’ve been nothing but headaches. Couple that with getting a gateway account, dealing with credit checks, monthly fees, monthly minimums, slow people in the payments industry, and PCI compliance. Stripe takes payments and puts them behind a simple API. No crappiness and 1099 rules of PayPal. No more reconsidering the meaning of life back when I had a merchant account.”
Stripe.com has made it easier to charge money online and it’s an issue that’s caused users time and money. John (20) and Patrick (22) and their 18-member development team will soon change that.
