Visa and Stripe Partner to Expand Online Commerce Globally

Visa, American Express and Sequoia Capital have decided to pump money into Stripe, the hot Silicon Valley payment start-up, raising the company’s value to $5 billion (£3.2bn).

Credit card companies think they have a found an ally in the increasingly competitive world of online payments.

That report indicates that the company took in less than $100 million in this round, which also included participation from new investor Kleiner Perkins Caufield & Byers.

There are no details on exactly how much Visa has invested in Stripe, although the investment was apparently done on a valuation of $5 billion.

Unlike other payment services, including PayPal and fully integrated e-commerce solutions such as Shopify, Stripe specifically focuses on providing the technical, fraud prevention, and banking infrastructure required to operate online payment systems.

“Stripe is not competing with the card networks”, Michael Moritz, a Stripe board member and partner at Sequoia Capital, told the Times.

It has been noted meanwhile that while Stripe does include bitcoin as a customer payment option, merchants themselves are unable to pay subscription fees in the digital currency.

The commercial pact between Visa and Stripe can be grouped into three areas of cooperation, according to Collison.

In May, Stripe made the code work for American Express and the new alliance will give Stripe access to Visa’s giant base of customers and merchants. He said Stripe will use its own tokenization techniques to handle payment data storage but didn’t rule out using Visa’s techniques for building new business.

“If your goal is to increase the GDP of internet and roll out globally faster … the card networks are the blindingly obvious people to work with”, Collison said in an interview.