Stripe's Payments Payout Technology For Collaborative Consumption Startups Now Processing Up To $500K Per Day
A few weeks ago, payments startup Stripe made it significantly easier for collaborative consumption startups to take and process payments. The company’s new technology allowed for payments to be distributed to multiple bank accounts, which is an issue for startups like Lyft, which are attempting to pay drivers with different accounts from the accounts of users. Stripe says that the service has taken off, and the company is now paying out up to $500,000 per day in these payouts to collaborative consumption startups alone.
To put that in perspective on the Stripe side of the equation, the payments company processes “millions” of dollars in transaction volume a day. But whether that number is $5 million or $10 million, half a million is a big chunk of change for collaborative consumption startups.
So why has this specific payments technology grown so fast in adoption? It’s mainly because of the challenges these startups face in paying out money to workers, says Stripe CEO Patrick Collison. When a buyer of a service (i.e. a person using Lyft for transportation) pays, the money can only be transferred to one account. So Lyft has to have payments sent to their own account, and then sent to the driver (i.e. the seller). According to Stripe, using the previous system, Lyft would require 10 full-time employees to manage payments to and relationships with their drivers. With Stripe’s new technology, you can insert a few lines of code into your app, and you will enable the ability to add multiple accounts to where money can be sent.
Users of Payouts include Lyft, Exec, Sidecar, Postmates, Homejoy, Kitchensurfing, HomePolish, Flightfox, Weddings.com, and Shoptiques.
Collison adds, “The part of Stripe that I’ve always found most interesting is the idea of facilitating new commerce that wouldn’t otherwise happen. Payouts is turning out to be a big part of that. These new networks are efficient, intelligent replacements for offline behemoths. It’s a cliché to say stuff like ‘I can’t wait to see what gets built,’ but I think the companies created with Payouts are really going to be transformative.”
Part of Stripe’s allure as a payments platform is that the company’s API, and integration is extremely simple and easy to use for developers. As many developers have commented, using Stripe allows an online site to accept payments in a matter of minutes. With Payouts, we’re seeing the company take this strategy a step further by now making transactions themselves more seamless for users in a specific vertical. You have to wonder if we’re going to see Stripe go after the specific pain points of verticals in the payments space, especially in areas of innovation (i.e. collaborative consumption) where there is fast growth. Stay tuned.