Stripe's decoupling of their value-added services from payment processing is commendable. Clayton Christensen would tell you: “When there is a performance gap — when product functionality and reliability are not yet good enough to address the needs of customers in a given tier of the market — companies must compete by making the best possible products. In the race to do this, firms that build their products around proprietary, interdependent architectures enjoy an important competitive advantage against competitors whose product architectures are modular, because the standardization inherent in modularity takes too many degrees of design freedom away from engineers, and they cannot not optimize performance.” Digital payments had significant performance gaps and both Stripe and Adyen saw this and approached it with a similar mindset back when they launched 10 + years ago. But a lot has happened in 10 years to close that performance gap. Again, from Christensen: “Once their requirements for functionality and reliability have been met, customers begin to redefine what is not good enough. What becomes not good enough is that customers can’t get exactly what they want exactly when they need it, as conveniently as possible. Customers become willing to pay premium prices for improved performance along this new trajectory of innovation in speed, convenience, and customization.” At Spreedly, we saw this change occur somewhere between 2017 - 2018. We went from a fringe idea (why would you want to work with multiple providers?) to hearing “Even the best provider places restraint on our product roadmap and growth. We need to build in flexibility from the get-go/now" I’m sure Stripe has known this for the last couple of years. This would be a gigantic engineering task to make happen though - a very impressive accomplishment. For existing PSPs and payment platforms like Spreedly that have always had an open platform mindset, this is excellent validation via a major market participant. And for merchants, there is more choice than ever when building the ultimate payment stack.
Jacqueline Wells
2mo
Interesting times ahead for the evolution of payment solutions.
Abhinav Nehra
3mo
This makes so much sense
Vadim Smirnov
3mo
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Product Manager @Adobe | Optimizing payments using AI/ML | CMU
3moI agree! More growth awaits and perhaps the network effect gets kicked in once they open up the product stack!