First, Stripe, despite it's mega valuation, is small peanuts. They are just a part of something much bigger, and they are not really enabling new markets.
Second, they didn't invent anything new, they just made the process a easier. There are plenty of non-Stripe solutions you can use today.
To a teenage software developer without business exposure or experience, who thinks 'opening a merchant account' is a big deal, or that 'incorporating' is a big deal, Stripe seems like some kind of magic.
But none of that is hard. People do it all the time. Your plumber, hairdresser and local cafe probably have some kind of incorporation and collect/pay a VAT and business tax. It's not rocket science. You can usually do it online in a few minutes.
'Dealing with banks' is not a problem with scale. 2% of every transaction however, and the underlying power structures that want to keep it that way ... that's a problem.
> Your plumber, hairdresser and local cafe probably have some kind of incorporation and collect/pay a VAT and business tax. It's not rocket science. You can usually do it online in a few minutes
I'm in the UK.
Setting up a company is easy. The last time I did it, took an hour or so of filling out forms online, but it's cheap and a few hours later, or the next day, you have a legal company.
Registering for tax/VAT etc takes longer. The forms took me longer to fill and the system took a few weeks to proceed through each step (codes sent in the post, figures in online forms checked by a person, etc), but you can start trading before they are done if you follow the transitional arrangements.
Getting a bank account is much slower. Recently I did it with Starling, because they offered a much faster online process than the high street banks. It still took a frustrating 4 working days, with support messages back and forth because they kept challenging me for "proof" that I was a business. Having a company was not sufficient proof. Lots of money laundering requirements, having to prove the type of business, having to provide evidence of online presence, etc.
I temporarily altered my LinkedIn profile (which I saw they did check) to satisfy their requirements.
The time before that was a high street bank, Barclays. The process took about 2 months. They interviewed me twice, and another of the directors, and conducted background checks on everyone. In the interviews they asked a lot of challenging questions about the nature of the business, even though it was a non-profit with 5 independent directors, handling only a small amount of money.
Other people, in more regular types of small business (plumber, hairdresser, cafe etc) report that getting business accounts can often take 1-2 months, and be quite frustrating because you want to start trading and that's a bottleneck.
Merchant accounts (for taking credit cards) are no longer necessary because of services like Paypal and Stripe. It used to be that merchant accounts were a challenge to get as a small business, because they didn't serve early businesses.
But even now, with Paypal, last time I did it, they set a cap on £1000/year of transactions until certain documentation was received by them. Despite sending them 10 different forms of business documentation at their request, they were never satisfied, and so that business stopped using Paypal, relegating it to a handful of users that couldn't pay any other way.
Second, they didn't invent anything new, they just made the process a easier. There are plenty of non-Stripe solutions you can use today.
To a teenage software developer without business exposure or experience, who thinks 'opening a merchant account' is a big deal, or that 'incorporating' is a big deal, Stripe seems like some kind of magic.
But none of that is hard. People do it all the time. Your plumber, hairdresser and local cafe probably have some kind of incorporation and collect/pay a VAT and business tax. It's not rocket science. You can usually do it online in a few minutes.
'Dealing with banks' is not a problem with scale. 2% of every transaction however, and the underlying power structures that want to keep it that way ... that's a problem.