eWAYs Matt Bullock says Stripe is mostly hype

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Matt Bullock, the founder and CEO of Australia’s chief online merchant ­payment gateway eWay, has taken a swipe at Stripe, the latest start-up wunderkind to hit our shores, arguing it is mostly spin.

Founded by the Irish Collison ­brothers, who already have a string of online businesses to their names, Stripe was launched in Australia last week by John Collison, 24.

Stripe – which comes with high-profile backers including various founders of PayPal such as Elon Musk – a point of marketing to developers at businesses.

It gives them APIs (application programming interfaces) which are small programs that make it easy to adapt users’ sites and can be changed by users to suit their needs. After supplying a bank account number, businesses can take payments nearly instantly.

Mr Bullock counters there is nothing new about APIs, with virtually all­ payment providers offering them. He said the chief difference between Stripe and eWay is that Stripe takes on more risk.

He points out, however, the price for that risk is the amount of money that merchants can accept is “throttled” when they first sign up. Merchants also don’t get paid for up to a week after a transaction – which is not a great selling point when cash flow is king for small business.

EWay is not as quick to set up, but it pays merchants as close to same day as possible.

“Our risk model is different – best case is we will do same day settlement if the customer uses NAB [eWay’s bank],” he said.

Business-focused NAB is also Stripe’s local bank and the bank for Braintree, PayPal’s equivalent, which is used by Uber, among others.

Mr Bullock founded eWay in 1998 and now has 15,500 merchant customers and processes about a fifth of all online purchases in Australia.

He has also launched in New Zealand and the UK.

“Coming into a new market, I get how you have to have some story and say something,” he said. “But we now do the same thing – we set up the payments gateway with MasterCard, Visa, Amex, whatever, without actually going and talking to a bank.”

While he offers APIs, he said most businesses just want something that works rather than tinkering with it themselves.

But Mr Bullock named only one other local direct competitor in his space – Securepay, owned by Australia Post.

Mr Collison said they are not necessarily competing with established players. Because there is so much growth in online businesses, there is room for new payment companies that offer slightly different choices,

“On a global basis, just 2 per cent of spending is online,” he said. “We’re not just taking some share of existing e-commerce, we’re increasing the GDP of the internet.”