Apr
18
2018
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Stripe debuts Radar anti-fraud AI tools for big businesses, says it has halted $4B in fraud to date

Cybersecurity continues to be a growing focus and problem in the digital world, and now Stripe is launching a new paid product that it hopes will help its customers better battle one of the bigger side-effects of data breaches: online payment fraud. Today, Stripe is announcing Radar for Fraud Teams, an expansion of its free AI-based Radar service that runs alongside Stripe’s core payments API to help identify and block fraudulent transactions.

And there are further efforts that Stripe is planning in coming months. Michael Manapat, Stripe’s engineering manager for Radar and machine learning, said the company is going to soon launch a private beta of a “dynamic authentication” that will bring in two-factor authentication. This is on top of Stripe’s first forays into using biometric factors in payments, made via partners like Apple and Google. With these and others, fingerprints and other physical attributes have become increasingly popular ways to identify mobile and other users.

The initial iteration of Radar launched in October 2016, and since then, Manapat tells me that it has prevented $4 billion in fraud for its “hundreds of thousands” of customers.

Considering the wider scope of how much e-commerce is affected by fraud — one study estimates $57.8 billion in e-commerce fraud across eight major verticals in a one-year period between 2016 and 2017 — this is a decent dent, but there is a lot more work to be done. And Stripe’s position of knowing four out of every five payment card numbers globally (on account of the ubiquity of its payments API) gives it a strong position to be able to tackle it.

The new paid product comes alongside an update to the core, free product that Stripe is dubbing Radar 2.0, which Stripe claims will have more advanced machine learning built into it and can therefore up its fraud detection by some 25 percent over the previous version.

New features for the whole product (free and paid) will include being able to detect when a proxy VPN is being used (which fraudsters might use to appear like they are in one country when they are actually in another) and ingesting billions of data points to train its model, which is now being updated on a daily basis automatically — itself an improvement on the slower and more manual system that Manapat said Stripe has been using for the past couple of years.

Meanwhile, the paid product is an interesting development.

At the time of the original launch, Stripe co-founder John Collison hinted that the company would be considering a paid product down the line. Stripe has said multiple times that it’s in no rush to go public — and statement that a spokesperson reiterated this week — but it’s notable that a paid tier is a sign of how Stripe is slowly building up more monetization and revenue generation.

Stripe is valued at around $9.2 billion as of its last big round in 2016. Most recently, it raised $150 million back in that November 2016 round. A $44 million from March of this year, noted in Pitchbook, was actually related to issuing stock related to its quiet acquisition of point-of-sale payments startup Index in that month — incidentally another interesting move for Stripe to expand its position and placement in the payments ecosystem. Stripe has raised around $450 million in total.

The Teams product, aimed at businesses that are big enough to have dedicated fraud detection staff, will be priced at an additional $0.02 per transaction, on top of Stripe’s basic transaction fees of a 2.9 percent commission plus 30 cents per successful card charge in the U.S. (fees vary in other markets).

The chief advantage of taking the paid product will be that teams will be able to customise how Radar works with their own transactions.

This will include a more complete set of data for teams that review transactions, and a more granular set of tools to determine where and when sales are reviewed, for example based on usage patterns or the size of the transaction. There are already a set of flags the work to note when a card is used in frequent succession across disparate geographies; but Manapat said that newer details such as analysing the speed at which payment details are entered and purchases are made will now also factor into how it flags transactions for review.

Similarly, teams will be able to determine the value at which a transaction needs to be flagged. This is the online equivalent of when certain purchases require or waive you to enter a PIN or provide a signature to seal the deal. (And it’s interesting to see that some e-commerce operations are potentially allowing some dodgy sales to happen simply to keep up the user experience for the majority of legitimate transactions.)

Users of the paid product will also be able to now use Radar to help with their overall management of how it handles fraud. This will include being able to keep lists of attributes, names and numbers that are scrutinised, and to check against them with analytics also created by Stripe to help identify trending issues, and to plan anti-fraud activities going forward.

Updated with further detail about Stripe’s funding.

Apr
05
2018
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Stripe launches a new billing tool to tap demand from online businesses

As more and more spending moves online — whether that’s shopping or subscribing to services like Netflix and Spotify — there’s increasing demand for tools that allow those companies, especially smaller ones, to start getting paid.

Stripe has made its name by providing developers with a simpler way to start charging customers and handling transactions, but today they hope to take another step by launching a billing product for online businesses. That’ll allow them to handle subscription recurring revenue, as well as invoicing, within the Stripe platform and get everything all in the same place. The goal was to replace a previously hand-built setup, whether using analog methods for invoicing or painstakingly putting together a set of subscription tools, and make that experience as seamless as charging for products on Stripe.

“These large enterprise companies have the resources to build internal recurring billing in house,” Tara Seshan, PM on the billing product, said. “Even then they would tell us what challenge it would be. What we did was took a step back and think about, how should this work, how can we make billing tools that are only available to enterprises be available to everyone. That meant something really flexible and really easy to implement. If you’re [running a small operation], you should have the same subscription tools as Spotify. What we have here is a set of building blocks so you get the speed and flexibility you need.”

Indeed, a lot of the Internet has slowly but surely shifted to a subscription model. There’s even a good chance that even the phone you have in your pocket is paid for in an annual subscription to amortize the big ticket price of that product over the course of several months. Larger companies have had these tools in place, but it’s a traditional very startup-y problem to just not have the resources to build them even by cobbling together online payments tools in order to get these running. Startups often have a long list of priorities, and they need to start generating revenue immediately if they want to continue growing.

This launch is, in part, a response to customers demanding a billing product that gets all these invoices and subscription expenses into a single spot. Stripe at its heart is an enterprise company, which means it has to keep close tabs on the needs of its customers while still balancing the needs to continue creating new products that small businesses didn’t realize would actually solve those problems in an elegant way. That’s especially true when it comes to Internet-oriented businesses, which are often changing their business models over time, Seshan said.

“Unlike something like Instagram or Facebook, where you’re doing analytics A/B testing voodoo to figure out what you should build, with Stripe, our businesses know what they want,” Seshan said. “They have clear requests, so we’re much more inclined to listen to our users as opposed to sitting in an ivory tower coming up with a strategy. As they look to add new products, that applies to the startup selling fast and iterating to the large tech companies about to launch a new subscription line or about to add a “for work” side of their product. What we saw often was that billing was the limiting factor to getting a product to market.”

In addition to all this, Stripe looks to apply the machine learning tools it’s created for things like fraud prevention into a new area of expertise. One example of this is figuring out when to intelligently retry a recurring billing charge, which may fail for any number of reasons. Stripe tries to get around problems like lost credit cards or anything along those lines to try to keep the experience as seamless as possible. Seshan said Stripe businesses that implement billing see a 10% increase in revenue — which, for flipping a switch, is pretty substantial.

As companies get bigger and bigger, they will also likely graduate beyond just a simple subscription. An enterprise software company, for example, will probably have to start targeting larger customers that have a salesforce and a different approach for implementing new technology. That means getting invoice-level revenue, which has different implementation requirements than just normal subscription billing. In that case, it’s not like the CIO of a Fortune 100 company can just put a credit card number into a billing service, as those require more robust research and a partnership in place.

While this is a tool that’s a natural fit for something like Stripe, it’s certainly one that’s created a substantial business opportunity. Last month, Zuora — an enterprise subscription services company — filed to go public amid a fresh wave of enterprise IPOs that included Dropbox and Zscaler (and also, to a certain extent, Salesforce’s big acquisition of Mulesoft). Zuora’s subscription services revenue continues to grow, showing that Stripe will certainly have competition here, but also that there’s a large market opportunity.

“We want to think about Stripe as growing the economic infrastructure to increase the GDP of the Internet,” Seshan said. “What we noticed is, we invested in marketplaces in the past, but we’re investing in the next wave of software-as-a-service businesses. We want to power that next trend, and it’s gonna accelerate in the year ahead. We’re really thrilled to power that with billing and subscriptions and we want to make that available to companies with all sizes.”

Oct
03
2017
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Elements, Stripe’s new check-out toolkit, aims to boost e-commerce sales completions

 Stripe, the payments startup is now valued at $9 billion, is today taking the wraps off its latest effort to help its customers — which now number in the hundreds of thousands, and include companies like Lyft, Salesforce, Facebook, Deliveroo, and the U.K. government — generate more transactions, and thus greater returns for Stripe itself. It is launching Elements, a free toolkit… Read More

Nov
07
2016
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Stripe launches Works With Stripe, a directory of apps that integrate with its payments

works-with-stripe Stripe, the company that competes against the likes of PayPal by letting businesses add payment services into their apps and websites with a few lines of code, is today launching a new directory that plays into its bigger ambition to position itself as not just a payment tech startup, but a wider platform for business services.
Works With Stripe, as the new directory is called, brings… Read More

Mar
18
2016
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Stripe’s startup toolkit Atlas opens for business in Cuba

cuba A month ago, payments company Stripe launched Atlas, a toolkit for startups to incorporate in the U.S. and lay the groundwork for growing their businesses online. Aimed largely at small enterprises outside of the U.S., Atlas is making a notable addition to the roster of countries covered under the program: from today, it will begin to accept Atlas applicants from Cuba, so that… Read More

Feb
11
2016
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PayPal Commerce Matches Stripe With PayPal’s Own Native Shopping Toolkit For Apps

email_buy_buttons PayPal’s first acquisition after it separated from eBay in 2015 was of a young startup called Modest, which had built a platform for small businesses to integrate buy buttons across third-party apps. Now, PayPal is taking the wraps off a new product that will integrate Modest’s technology. PayPal Commerce — as the new service is called — launches today in closed… Read More

Jun
09
2015
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Stripe Now Has An iPhone App For Monitoring Payment Activity

stripe app Stripe, a service that companies can use to accept payments, has a new way for businesses to track purchases and user activity — an iPhone app. The new iPhone app does basically everything its existing online dashboard does, but brings it to an interface more suited for a mobile device. Businesses can also set up notifications for whenever a payment or purchase is made or set up a… Read More

Jun
30
2014
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Get Paid: GoDaddy Links With PayPal, Dwolla, Stripe For A Mobile & Web Payment Service

4222474443_a5e2ebaabe_b As GoDaddy gears up for a $100 million IPO, the domain and web services company is adding on more features that will help it make more profitable revenues from its 12 million small-business customers. The latest of these puts GoDaddy further into the world of e-commerce. Today, it is launching “Get Paid,” a new online and mobile payments service created with existing… Read More

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