In recent weeks, global payments platform Stripe has announced its launch into Australia, offering merchants the ability to quickly and easily make and receive payments in over 100 currencies.
As such, Stripe is an example of the increasing competition in the payments space – a scenario that has been slowly coming to the boil since PayPal first appeared on the scene. While competitors have been slow to catch up, it appears that the payments landscape is finally on the tipping point, with a number of different products all competing for the same market.
PayPal has since upped the ante with the acquisition of Braintree, which has been active in Australia since 2012. Credit brands Visa and MasterCard have also developed their own options in V.me and MasterPass Connect – and this is by no means the complete list of payment providers available to local merchants, each with various benefits and points of difference.
“I expect the pace of innovation to pick up significantly now that Stripe is here,” said Niki Scevak Startmate, Blackbird VC. “While payments solutions in Australia have been incremental improvements, we think the arrival of Stripe could mean that new kinds of businesses will be easier to start than ever in Australia; particularly online software and services businesses like Campaign Monitor or Atlassian, marketplaces like Freelancer or 99Designs, and subscription businesses.”
For many merchants, choosing the right payment provider comes down to the fine print. For this very reason, Founder of competitor payment company eWAY, Matt Bullock believes there are a number of issues with Stripe’s offering that local businesses should be aware of, including the lack of same-day settlement and phone support.
“I was shocked at the way the Stripe news was covered, and felt I had to speak up in defence of the current payments providers, to provide information transparency to local merchants,” Bullock said. “The fact that Stripe holds funds for seven days shows clearly that they don’t understand the needs of Australian businesses. Their lack of phone support, growth restrictions, and slowness in releasing funds are a real problem.”
Bullock points out that not only is Stripe being potentially misleading by claiming unique service offerings such as global currencies, easy setup, end-to-end facilities and multi-currency NAB-backing, but he also alleges the upstart payment provider’s onboarding process for new clients could be “stifling”.
“The way their system works means that anyone that signs up to Stripe needs to go through a vetting process. You can only do a trickle of business until they trust you with volume. This would be stifling for any business that is actually on a growth trajectory.
“Cashflow is king, and Stripe holds and controls the payment for local merchants, only giving it up every seven days. That’s something that any business owner knows just doesn’t cut it.”
For many, Bullock’s statements may sound like that of a beset competitor, seeking to piggyback Stripe’s launch announcement, however the specifics should certainly be noted by merchants either way.
Ultimately, the payment provider that a business selects must be thoroughly researched, as different options will suit different sized merchants, with added considerations for those transacting across various channels. In particular, Stripe’s seven day turnaround on settlement should raise eyebrows with many merchants.