Stripe, a payments powerhouse headquartered in San Francisco made an acquisition to adhere to the new regulations in Europe. These new regulations will be implemented later this year to make online transactions more secure.
Well, the fintech company has acquired Touchtech Payments, an Irish startup that works with banks to help build and manage Strong Customer Authentication (SCA). It is a verification process requiring cardholders to provide two different forms of authentication to process transactions. From September 14, 2019, SCA will be required for most transactions in Europe.
For now, there is no word regarding the deal but the Irish startup raised less than $500,000, claims Pitchbook data. Post acquisition, the Touchtech Payments will work from the Dublin offices of Stripe. Notably, Touchtech’s clientele includes banks such as N26 and fintech startups such as TransferWire. And, it remains to be seen how it will work with Stripe.
SCA is a wider payments direction being implemented across Europe. Basically, from September this year, people buying items have to provide two forms of verification – one by entering a code they receive on their phones or connected devices such as wearables, biometric scans or a separate PIN. There are many exceptions such as purchases under €30 and recurring billing around subscriptions as implementing SCA will make these complex.
Improvements to Stripe
Besides the acquisition of Touchtech Payments, Stripe is also updating its APIs to include a new default payments API, a new checkout and an upgraded billing. The updates to its APIs will be made on account of SCA, its effects for verification and how it will impact other parts of the payment sequence. Though it is not mandatory for all those who use its current APIs immediately, they will have to do so in the future if they are doing business in Europe.
The checkout will automatically handle SCA requirements for merchants and will be customisable to account for repetitive versus one-time purchases. The billing upgrade will automatically identify the purchases requiring SCA and trigger subsequent scripts. This will have an impact on businesses that take recurring payments such as subscriptions.
Exists across the world
Stripe was founded in 2016 by John Collison and Patrick Collison. Though it is headquartered in San Francisco, it has focused on international expansion and product development with the previous funding rounds. Eventually, it has opened engineering hubs in San Francisco, Dublin, Seattle and Singapore.
Funds Fortune 500 companies
Stripe processes billions of dollars every year for numerous businesses ranging from startups to Fortune 500 companies. Some notable businesses supported by this online payment company include Twitter, Shopify, Kickstarter, Salesforce and Lyft.
An Adyen rival
Adyen, a Dutch fintech unicorn is the primary payments provider to eBay, Uber, Spotify, Facebook, Netflix, Vodafone, etc. It can be said that Stripe, the American unicorn is an arc rival to Adyen. Especially, when the online payments are witnessing a never-seen-before growth, there is no denying that the battle is getting fiercer and many more might mushroom in the coming years.
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