Stripe says it expects growth this year will not be as strong as last year when the company benefited from an e-commerce surge spurred by the COVID-19 pandemic, according to an annual letter from its cofounders.
Stripe said it collectively processed more than $640 billion in payments last year for a year-over-year increase of 60%. The letter further explains that “since a lot of this came from one-time behavioural adjustments caused by the pandemic, 2022 won’t match the same level of growth.”
In the letter, Stripe argues that opportunities presented by the internet are underestimated.
The company expects to benefit this year from growth of the “creator economy” in which people who produce content, like podcasts, TikTok videos, newsletters and software, are directly paid by the consumers of their content.
“Production decisions shouldn’t just be made in centralised fashion by corporate managers; the growth of everything from Substack to Teachable shows there are important topics, niches and other forms of cultural creation that have been left under-addressed,” said the letter.
Stripe also will benefit from what it calls “the explosive growth in FinTech,” especially in embedded finance, which refers to the business of inserting financial and payment tools into other products and services.
According to the letter, Stripe can aid e-commerce growth by “lowering the cost and complexity” of starting a business; helping established businesses adapt their models to the web; simplifying the often convoluted process of international payments; and lowering the cost of scaling by providing simple, secure and reliable APIs and related services.
The company notes that small businesses around the world lack access to financial services.
Surveys cited in their letter showed “only 48% of small businesses say they have access to all of the financing they need,” and 55% of business owners have to visit a local branch in-person for financial services, while 23% of businesses have to send a fax to open a bank account.
“In short, the landscape still looks pretty antiquated,” the letter said.
Each day in 2021, 1,400 new companies and 100 non-profits joined Stripe, and more than 100 businesses generated $1 million in lifetime sales on Stripe
“We have, of necessity, expanded a great deal during the pandemic. We sometimes use the analogy of solid rocket boosters: once lit, they can’t be extinguished.
They remind us of our customer base. We’re proud to work with the fastest-growing companies in the world, from Airtable to Zoom, but it also means that we have to work hard to stay ahead of their needs.”
The company also asserted that 60% of the companies that went public last year are Stripe customers. “We want to support start-ups from the first line of code through (their) IPO and beyond,” the letter said.
In the letter, Stripe also called out the areas where it invested over the past year, including in its Stripe Terminal product, which is an in-person payments tool for internet businesses to manage all of their offline and online sales. To bolster that product, the company acquired card reader provider BBPOS this year.
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