Stripe launches charge card programme as a new revenue stream for fintech platforms

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Stripe's Headquarters in San Francisco.

Stripe unveiled a new charge card programme for Stripe Issuing, their commercial card issuing product. The inclusion of charge cards enables fintech companies and platforms to create and distribute both virtual and physical charge cards, allowing their customers to spend on credit rather than the funds in their accounts. This move paves the way for new revenue opportunities for platforms and the ability to offer new financing capabilities to customers.

“Whether a fledgling enterprise or a business poised for expansion, access to capital can make a tangible difference,” said Denise Ho, Head of Product for BaaS at Stripe. “Our new charge card enables fintech and SaaS platforms to offer a reliable source of credit for the myriad small businesses they collaborate with.”

Since its launch in 2018, Stripe Issuing has been used by platforms and fintech companies to create over 100 million cards in the US, the UK, and the EU. Until this point, Stripe-issued cards could only be utilised to spend money from a prefunded account. The extension into charge cards permits platforms to offer these same users access to credit. Cardholders can spend up to their credit limit and repay the outstanding balance at the end of each month.

Recent surveys suggest that 77% of Small and Medium Businesses (SMBs) harbour concerns about access to financing. Software platforms can alleviate these concerns by providing access to capital that customers can use to spur growth. Furthermore, the addition of a charge card programme allows platforms to forge deeper, more profitable ties with their clientele.

However, building a credit offering from scratch is no mean feat. Platforms would need to navigate complex requirements such as collecting repayment, handling lending compliance, and deciphering licensing requirements. The Stripe Issuing charge card programme tackles these challenges head-on, allowing platforms to offer access to credit with minimal additional operational cost.

Stripe Issuing provides the core components of a charge card programme, including funds flows, network connections, printing, and integration APIs. It also streamlines all the necessary compliance, bank partnerships, and ledgering.

“The task of building a charge card programme can be formidable. Stripe offered invaluable support in planning and launching our programme swiftly, with a compliance-first design that we’re confident can scale to meet Ramp’s needs,” said Michael Cohen, Vice President of Partnerships at Ramp.

Businesses can set individual credit limits and repayment schedules, with flexible weekly, monthly, or set-day repayment options. When businesses need to collect repayments from customers, they can utilise Stripe’s suite of products, including no-code and embeddable options like Invoicing and Checkout.

The charge card programme also offers flexible funding options for platforms. Once a card is used for a purchase, the transaction needs to be funded. While most charge card programmes require the platform offering the card to cover the transaction immediately, Stripe Issuing allows platforms to send funds to Stripe after the transaction settlement date, reducing the need for platforms to maintain large cash balances.

Ramp, Emburse, Karat, and Coast are already employing the charge card programme, which is currently available in beta in the US, with plans for expansion to the EU and the UK.

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