TechCrunch reports that Fintech giant Stripe has announced plans for a new charge card for its business card issuance product.
Stripe launched its Stripe Issuing product in 2018 and has helped US, UK, and EU companies issue over 100 million cards. Some of its clients include Shopify and Ramp.
Previously, Stripe-issued cards could only be used to spend from pre-funded accounts. The recent expansion to debit cards will help companies distribute virtual or physical debit cards to their customers, enabling them to make credit card purchases rather than just use the funds available in their accounts.
“Our new charge card allows fintech and software-as-a-service (SaaS) platforms to provide a reliable source of credit to the many small businesses they work with,” Ho said.
Stripe Issuing provides the core components of a debit card programme, such as funds flow, network connectivity, printing and integration APIs designed to simplify all necessary compliance, banking partnerships and ledgers.
Stripe cites a survey showing that 77% of small and medium businesses (SMBs) are concerned about securing funding.
However, despite the need and interest from providers, building a credit product from scratch is difficult, the company said, because the platform has multiple requirements, such as collecting repayments, handling loan compliance and navigating licensing requirements.
The product is in beta in the US and has been used by companies such as Ramp, Emburse, Karat and Coast. Stripe will soon launch a charge card program in the EU and UK.
Anyone can sign up for the new plan, even if they are not an existing Stripe user, said Denise Ho, Stripe’s head of BaaS product.
The payment processor will profit from the interchange fees. Stripe will earn more revenue as its customer base grows and users spend more. The programme will also charge a compliance fee.