Visa is partnering with and investing in Stripe, fueling the processing startup's
"It's about enabling as many players as possible to embed payments in every commerce experience that may be out there," said Richard Crone, a payments consultant, who predicted Visa' stake will become a full acquisition at some point. Visa and Stripe did not comment by deadline, or divulge the size of the stake.
The two companies will power new e-commerce experiences, such as "
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Stripe will also be one of the first beta partners to connect to Visa's network through application programming interfaces (APIs) and software development kits (SDKs), or toolboxes that allow developers to connect to other technology. The link between Visa and Stripe will increase developer access to payment and risk management services, Visa's tokenization servicewhich replaces account numbers with one-time-use "tokens" to safeguard payment dataand other technology.
"Stripe has been novel in its simplicity to providing payment APIs to developers in every commerce experience, except for in-person point of sale," Crone said. "Stripe is one of these go-to providers for a simple API for payments."
The startup, which launched publicly in 2011, has also proven adept at enabling payments for
Stripe was valued at
One of Stripe's earliest and most important products is Stripe Connect, which allows businesses to accept credit and debit cards online. Its clients include Lyft, Instacard and Kickstarter. The vendor recently
"[Visa's stake] is great news for Stripe. In addition to the actual funding, they get a strong strategic partner that will help them further expand globally," said Zil Bareisis, a senior analyst at Celent.
Visa is bolstering its technology as
Adding ties to Stripe improves Visa's ability to reach developers with new payments technology, in much the same way PayPal's 2013 purchase of
"There's a big upside (in APIs), and we haven't even tapped the biggest potential," Crone said, adding the API market is expanding at a 50% yearly rate.