Stripe, the private financial infrastructure giant, has announced the launch of a new charge card program through its commercial card issuing product, Stripe Issuing, as revealed exclusively by Denise Ho, the head of product for BaaS at Stripe.
Originally introduced in 2018, Stripe Issuing has facilitated the issuance of over 100 million cards in the U.S., the United Kingdom, and the European Union for companies like Shopify and Ramp. Today, it stands as one of Stripe’s fastest-growing products, handling half a million transactions daily. Fintech companies such as Klarna have built their businesses on this platform, demonstrating its reliability and scalability.
Previously, Stripe-issued cards could only be used to spend funds from a prefunded account. With the expansion into charge cards, businesses now have the ability to create and distribute virtual or physical charge cards, enabling their customers to make purchases on credit rather than using their account balances.
According to Ho, the demand for credit capabilities within Stripe Issuing has been consistently high. This new feature provides a dual benefit for Stripe by generating a new revenue stream and allowing the company to offer additional financing options to its customers at minimal operational cost.
For instance, platforms utilizing Stripe Connect can leverage white-labeled products from Stripe, offering embedded financial services such as financial accounts, working capital loans, and now charge cards. Stripe Issuing provides the fundamental components of a charge card program, including fund flows, network connections, printing services, and integration APIs. It also streamlines compliance, bank partnerships, and ledgering processes.
Current users of the charge card program include Ramp, Emburse, Karat, and Coast, with the program currently in beta in the U.S. Stripe plans to launch charge card programs in the EU and the U.K. in the coming months.
Ho explained that partnering with banks has been crucial in ensuring compliance, as small businesses spending through charge cards involves lending activities. Stripe assists startups by guiding them through the process and providing necessary compliance and risk oversight to avoid potential challenges.
Regarding underwriting, Stripe aims to empower its clients to make their own underwriting decisions. While helping them establish compliant policies, Stripe offers flexibility and control with appropriate guardrails. Over time, Stripe anticipates clients may desire additional modules for independent underwriting, and the company will work to develop these features as its offering evolves
