Stripe adds Bacs Direct Debit to compete with UK rivals
Stripe, the US global payments giant valued at $36 billion, has set its sights on the UK as it gears up to launch its direct debit acceptance in the region, AltFi reports.
By authorising merchants to collect payments from consumers’ accounts, San Francisco-based Stripe will be directly competing with home market players in the UK such as GoCardless.
To deliver direct debit acceptance in the UK, Stripe is adding the Bacs Direct Debit payments service — which covers digital wallets and card payments — to its ecosystem.
Stripe’s business lead for EMEA, Matt Henderson, confirmed the news in a statement: “Bacs is something of a heritage brand. We all recognise the paper forms you fill out to set up the mandate. It’s rightly trusted, but can feel a bit old-fashioned.”
He said Stripe is “pleased to be able to bring Bacs Direct Debit completely online alongside newer payment methods like Apple Pay or Alipay”, and that the ability to collect Bacs payments will “help increase conversion, reduce cost and minimise churn”.
The company will offer the direct debit payments through its own Stripe Checkout, as well as through custom developed checkout integrations.
Some start-ups and organisations are already using Stripe’s Bacs Direct Debits, including London-based proptech Yorlet, non-profit charity Chuffed, and San Francisco-based industrial Internet of Things (IoT) provider Samsara.
Stripe says cloud accounting platform Freshbooks will launch in the UK later this year with its help to offer direct debit capabilities.
The US tech giant offer its platform in 39 countries, 29 of which are in Europe. In April, it raised $600 million in a mega funding round, and launched in five of the 29 European countries it operates in.
Henderson told The Times at the end of last month that Stripe has processed more than $1 billion in transactions from new users since March.
He said COVID-19 has compressed years of growth in the online economy into a matter of weeks, validating Stripe’s mission to “build out economic infrastructure for the internet all over the world”.