In Silicon Valley, “marketplace” is an increasingly hot buzzword. That’s because it is the business model of companies like Uber, Airbnb and Lyft, where companies act as intermediaries for thousands of people who want to sell their services to the public.
Stripe, the e-commerce start-up, believes marketplace businesses are not a fad. As dozens more companies using this model appear in the coming years, Stripe has built a payments system to help these start-ups grow into thriving, global businesses.
Hence the release of Stripe’s latest product, Connect. It is essentially a solution that marketplace-style companies with more complicated payments structures can just plug into their systems. Connect will allow the companies to then manage mobile payments more easily.
"What these companies need are quite different than traditional businesses," said Patrick Collison, co-founder of Stripe, citing the complicated schemes that companies like Lyft must deal with when paying thousands of drivers who work for the company.
Many marketplace start-ups also face more difficulties when trying to expand beyond the United States. Banking networks in, say, Germany or Australia, have different security, compliance and ID verification requirements than the United States. Connect, Stripe said, handles all of those headaches for the start-up.
If the system takes off, it could have large implications for companies with international ambitions. Mr. Collison notes that for marketplace start-ups, one of the largest barriers to expansion remains navigating the tricky world of payments systems in countries outside of the United States and Canada.
Stripe employees in 18 countries will handle most of the heavy lifting so that, for example, a company like Kickstarter will not have to send people to Luxembourg to deal with currency conversion and other compliance issues.
Stripe is working with some of the most closely watched marketplace companies in the space to get Connect off the ground. Kickstarter, the crowdfunding platform, is using the new product, as well as Lyft, Instacart and Postmates, among others.
New York Times
