If you haven’t read my blog before, yes I am a huge fan of Stripe: the company, the people (the ones I have met who work therein a form or another) but most importantly the products.
Stripe recently announced a new product: Stripe Treasury.
Stripe Treasury allows people to build products that offer service that up until today only banks could.
- debit cards
- bank accounts
- accounts with interests
and other products to their own customers.
To achieve this Stripe partnered with Citigroup, Goldman Sachs, Barclays and other financial institutions (FIs).
This product comes as a the natural evolution of other products such as Connect, Capital, Payouts and Issuing.
To offer the ability to other companies to build their own fintech services for to their own customer, so that they can perform all of their money management needs on THEIR product without ever leaving it.
Imagine being able to do ebanking transaction directly from your AirBNB, so you can pay the cleaners directly from inside the app! A much better experience for everyone. This would allow AirBNB to build a lot of extension of their already successful business model.
So far Stripe Treasury has launched a product in partnership with Shopify (or at least that is what we can see from Stripe’s landing page and the corresponding Shopify landing page here).
When a merchant get access to Balance, they will be able to have near-instant access to revenue earned through Shopify. That means spending directly from their Shopify balance. For example they will be able to use a dedicated merchat card to buy for business things; even access credit if their balance is 0.
Other scenarios could be: transferring their balance via ACH or wire transfer, pay bills, send money to other Shopify merchants/users (for example to pay for add-ons) etc.
I was reading through the web and I noticed this comment from one of Stripe’s PMs:
Bank account replacement for businesses with tools integrated directly into the platform or marketplace they’re already using. For example, say you have a Shopify shop, you sell items and make money through Shopify but then you have to transfer the money OFF from Shopify and into your bank account so that you can pay bills/invoices/people in your company at the warehouse etc.
Like I mentioned Shopify is building Balance with the Treasury API so you can manage all your money in one place with a single view of revenue and spend.
There are a ton of other benefits that Stripe has highlighted, that Treasury users could build:
- systems for faster payouts
- rewards built into the parent system for using their own banking system
- alerts and notifications for balances
- cashback programmes
Companies that run operations like Lyft, Uber, etc - they can build their own banking system finally!
That would allow the drivers to pay for their cars, as a percentage of the earnings they make from driving. Maybe pay their insurance premium within the same app they use to manage their driving business.
Or maybe something even simpler like paying for gas or electricity for their cars.
If you work for a company like UberEats, Doordash, Favor, Postmates you might get a work-issued credit/debit/prepaid card to buy food on behalf of your customers. I dont know what the exact advantage of this would be, I am sure the small-text on transactions matters somehow. Additionally, if you’re a new “player” into this vertical you might come up with creative solutions for using this new Platform. Maybe the more you work, the more you spend from this pre-loaded card, the more benefits you as a delivery person can earn (i.e. free food from your most visited restaurant during your workhours?)
The point with Treasury, just like any other Stripe product, is that it’s up to the community to make stuff. Stripe itself doesn’t know what the people out there can build on top of the API. It’s like LEGO , you have a bunch of blocks and someone comes up with incredible rendition of 1 to 1 premium cars.
Stripe wants to help companies build their fintech infrastructure .
So why this now? Well no other tool built by Stripe can be used to create these things. Not even Stripe Connect - you can’t hold funds in your account. There are some regulations around this instead using Treasury API companies can build their own money management account - all backed by major banks like Citigroup Barclays etc. That would allow indefinitely holding money just like a Bank.
In conclusion, I honestly think Stripe will build a product that could become an Atlas, by providing everyone with the ability to become a bank - they would be the map holders. They can probably see and build amazing analytics on top of all these datapoints gathered - that might lead to another announcement in a year or two - who knows.
At the end of the day this is great for everyone:
- Companies that implement the Treasury API have a new tool to become more flexible and build the stuff they really need
- Those who work for such companies have faster access to money and possibly new perks to look forward to.
- and new companies can come out of thin air to bring all of this data together to make it more userfriendly for everyone to use a million new pseudo banks!