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Stripe Issuing Launches in Europe - Key Information On Competition

Stripe Issuing enables customers to create, manage, and distribute virtual and physical payment cards. The US-based FinTech shared that issuing a virtual card can be done instantly, while a physical one is shipped in 2 days! But Stripe is no stranger to card issuing. Just one year ago, amid the surge of on-demand delivery, Stripe rolled out its Issuing Service across the US. Their expansion to Europe can be seen as a great indicator of the success of this service in the US.

26/4/2021

The fierce competition between Stripe and Adyen

Stripe is certainly not the first Payments service provider to venture into offering an issuing service. Adyen already started issuing cards back in 2019.

Stripe, dually headquartered in the USA & Ireland, largely focused on the US market and now has made its way into Europe. Adyen, being our Dutch payments pride, already made its way to the US a while back.

Both payments companies are targeting each other’s clients in a fiercely competitive battle. Stripe, being very well established for small to medium-sized businesses, are upscaling their payments processing abilities to target enterprise-level prospects with their service offerings.

Adyen on the other hand, traditionally known for its focus on enterprises, are making the direct opposite movement as they have started targeting small to medium-sized businesses.
The Go-To Market Strategy in Tech

Normally speaking, within Tech, the go-to strategy to gain market share is focusing on the less profitable & unserviced segments of the market, followed by upscaling to the higher segments. Within payments, this is not the case.

tech companies market strategy
Tech Companies Market Strategy. source: growth tribe.

So in this battle which is being fought out on service offering, geographical coverage, customer target market, and many more factors, only time will tell how market capitalization will turn out between Adyen, Stripe, and other competitors.

Changes in the Payments Value Chain

What’s interesting to us is that when looking at a traditional payments value chain, companies typically used to focused on specialising in one part of the payment process. Either issuing OR acquiring for instance. However, these lines are slowly fading of late as payments companies are encompassing larger parts of the value chain.

payments value chain
Traditional Payments Value Chain. source: Adyen

Marqeta, Adyen, and Stripe are just a few examples of payment companies which did exactly that. This highlights just how valuable issuing services are, especially looking at how slow and complicated the traditional process of physical card issuing can be.

Stripe's New Target Market

With ‘Stripe Issuing’, businesses across Europe can provide employees with branded cards which can be controlled with dynamic spending limits and blocked merchant categories.

European countries where Stripe Isssuing has been rolled out are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, Spain, and the UK.

Use Cases

stripe issuing use cases
Stripe Issued Card in the US. source: Stripe

One of the great user cases of this service in the US is that on-demand delivery platform, such as Postmates for example, issue its couriers with cards to pay for work expenses. We’ve also seen car rental companies like Zipcar providing renters a “Gas card” to fill up the gas tank without using their personal cards.

In a nutshell, allowing businesses to issue customized cards opens a window of opportunities to optimize and manage expenses. But, this is certainly not only a win for companies, Deliveroo’s food riders for example, don’t need to risk paying out of pocket for customer orders.

Convenient Card Issuing Remains Highly Desirable

To conclude, quick and secure card issuing remains highly desirable, and we won’t be surprised if we saw more acquirers and payment service providers expand their service offerings! We also suspect that tokenization plays a major role in making these kinds of services available and safe!

Considering the success of Stripe Issuing in the US market, do you think Stripe will experience similar success across Europe?

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