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Protocol | Fintech
The people, power and politics of fintech, every Tuesday and Friday.

Stripe's global ambitions

Jakarta, Indonesia.

Hello and welcome to Protocol | Fintech! This Tuesday: Stripe gets global cash, local banks find a fintech advocate and Robinhood doubles its recruiting.

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The Big Story

Stripe's global ambitions

Investors put another $600 million in Stripe's coffers, valuing the developer-friendly payments company at $95 billion.

The sources of that funding all but spell out Stripe's expansion plans. There's Allianz of Munich, Baillie Gifford of Edinburgh, and Axa of Paris. Oh, and Ireland's National Treasury Management Agency. Stripe plans to hire 1,000 people in Dublin in the next five years.

Tomorrow, the world. It was less than a decade ago that Stripe began its global expansion, hanging a Canadian flag in its office on Second Street in San Francisco.

  • Stripe is in 43 countries, but only 11 of those are outside Europe. Brazil, India and Indonesia are next.
  • Ireland is a logical base. Many tech companies choose it for international operations, but the brothers who co-founded Stripe, Patrick and John Collison, were born in Limerick.
  • Its international growth is off to a good start. Stripe has surpassed Adyen, the Dutch payments company, in total transaction volume, according to the Financial Times.

Stripe is stretching beyond payments. Part of the global push will mean bulking up banking, lending and other services.

  • Stripe already offers tools besides processing credit cards. Customers can use Stripe to issue payments, manage billing and subscriptions, and detect fraud.
  • Every payments company wants to lend — Square, PayPal, Amazon and Shopify also offer merchants loans, typically paid back through sales the companies process. Stripe also has a corporate card that competes with those from Brex and Divvy.

A business that builds businesses. Stripe says its goal is to increase the "GDP of the internet." That means knocking down obstacles to creating and growing businesses.

  • Stripe introduced Atlas, a "startup toolkit" to help entrepreneurs incorporate and open a bank account, five years ago. Those tasks remain challenging, particularly for those who are crossing borders to get their businesses underway.
  • Stripe recently invested in payroll service Check and partnered with cyber insurance provider Layr.
  • Stripe even publishes books — heady intellectual fare from authors like economist Tyler Cowen and tech executive Elad Gil. The imprint's goal is the same as its other ventures, Stripe says: to help businesses grow.

The bottom line: Stripe wants to be the "AWS of money." Stripe doesn't want to just provide better or faster payments. It wants to provide the underlying internet infrastructure for finance globally. That will require planting many more flags, even as it overtakes rivals.

A MESSAGE FROM GODADDY

GoDaddy

Greg Goldfarb, who is VP of Products and Commerce at GoDaddy, admires the resilience and ingenuity of small business owners. "It is amazing to see entrepreneurs figuring out the new context really quickly to adapt and survive." We sat down with Goldfarb to talk about the rise in ecommerce, the impact of COVID-19, the major trends emerging this year and more.

Read the interview

From Protocol | Fintech

  • Dapper Labs had a rough start when its CryptoKitties collectibles swamped its blockchain. But it bounced back to build NBA Top Shot, which is now raking in millions.

Overheard

  • "I remember texting my dad when I was up $40,000 and he told me to pull out and I didn't. It was definitely an emotional rollercoaster. … It felt more like gambling than investing." —Payne Porter, 23, on joining the GameStop stock trading frenzy in January.
  • "I respect every competitor, I don't fear any competitor. We study all competitor moves, whether it's the fintech disruptors or major players."Bank of America CEO Brian Moynihan on the heightening competition in financial services.
  • "We don't underestimate the challenges that come with scaling a new brand in an area dominated by entrenched banking incumbents, yet the opportunity is incredibly exciting."Zeller CEO Ben Pfisterer on the payments software startup's competing in a crowded fintech space.

3 Questions With...

Chris Griffin, Narmi co-founder

What are you most excited about in fintech?

Business digital banking is finally gaining the spotlight. Neobanks and fintechs have been drivers for change in consumer digital banking, but the business digital banking experience has mostly been an afterthought. Last year's Paycheck Protection Program loan distribution served as a valuable test of the relationships businesses have with their financial institutions.

What fintech trend are you most worried about?

The delocalization of banking. That is a dangerous trend for the consumer, for the community and for the overall system. There is a need now more than ever for community banks and credit unions to maintain their personalized services but do it in a way that is fast and innovative to meet the needs of their communities in an entirely digital-first way.

What in fintech do you think needs to be fixed?

I'm hopeful that we will see open banking regulations in the United States in the next few years. There are countless use cases when a third party needs access to your financial data. In Europe, open banking laws like PSD2 require financial institutions to share this type of data when an end user authorizes it. Notably, this data access is governed by a secure, standards-based scheme: OAuth 2.0. In the United States, this data access relies upon brittle and insecure means like screen scraping and unhashed password storage. This needs to change from a privacy, reliability and national security perspective.

Need to Know

  • China cracks down. After financial authorities humbled Ant, China's antitrust regulator is clamping down on Tencent, another big player in payments, sending its shares tumbling.
  • JD.com in talks to buy a brokerage. China's largest ecommerce company by revenue wants to buy a stake in Sinolink Securities, per Reuters.
  • Binance is under investigation. The Commodity Futures Trading Commission is investigating the largest cryptocurrency exchange to see if it allowed U.S. residents to buy crypto derivatives without the required registrations.
  • The Consumer Financial Protection Bureau is probing Oportun Financial. An investigation by the Texas Tribune-ProPublica investigative unit found that Oportun sued low-income Latino borrowers during the pandemic.
  • Robinhood buys a recruiter. The online brokerage doubled its recruiting staff by hiring San Francisco's Binc, adding more than 80 people.
  • MSTS is now TreviPay. The global B2B payment company announced a new name for the business that facilitates $6 billion in transactions a year in more than 27 countries.
  • Koho Financial raised $70 million. The Canadian challenger bank's series C funding round was led by TTV Capital and also involved existing investors Drive Capital and Portag3 Ventures.
  • A new hotshot emerges in NFTs. CryptoPunks surpassed NBA Top Shot Monday in the value of digital collectibles traded. It's seen $4.6 million in 75 transactions, according to CryptoSlam.io.

Thanks for reading — see you Friday.

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