AWS Summit NYC 2024 | Mark Smith | AWS & Aakash Sahney | Stripe

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Mark Smith

Head of Payments Market and Business Development

AWS

Aakash Sahney

Head of Product, Stripe Connect

Stripe

How Stripe and AWS are transforming payment platforms for modern businesses

In today’s rapidly evolving payments industry, modernization has become paramount. Companies seek faster, more secure and personalized payment solutions to meet the increasing demands of consumers, small businesses and enterprises alike.This drive for modernization is transforming payments, enabling businesses to innovate and iterate continuously. The collaboration between Stripe and Amazon Web Services Inc. exemplifies this shift.“We’ve now been in this space for over a decade. We’ve helped over 13,000 platforms embed payments in some way,” said Aakash Sahney, head of product, Stripe Connect. “Embedded payments opportunities are really everywhere

Stripe reportedly in talks to acquire fintech startup Bridge for $1B

Payment technology company Stripe Inc. is reportedly in talks to acquire fintech startup Bridge Ventures Inc. for $1 billion.According to Forbes, the acquisition talks, which are still under discussion and subject to either party walking away, would be Stripe’s largest deal to date. Some of the sources referenced by Forbes also note that regulatory considerations such as licenses and compensation for employees, including Bridge founders Zach Abrams and Sean Yu, remained potential hurdles.Neither Stripe nor Bridge has commented on the reported acquisition discussions

How Stripe and AWS are transforming payment platforms for modern businesses

In today’s rapidly evolving payments industry, modernization has become paramount. Companies seek faster, more secure and personalized payment solutions to meet the increasing demands of consumers, small businesses and enterprises alike.This drive for modernization is transforming payments, enabling businesses to innovate and iterate continuously. The collaboration between Stripe and Amazon Web Services Inc. exemplifies this shift.“We’ve now been in this space for over a decade. We’ve helped over 13,000 platforms embed payments in some way,” said Aakash Sahney, head of product, Stripe Connect. “Embedded payments opportunities are really everywhere

play_circle_outline Exploring the Future of Payments: Modernization Trends and Innovations in Reliability and Scalability

play_circle_outline Empowering Businesses through Embedded Payments: Verticalization and Solutions for a Range of Industries

play_circle_outline Innovative Data-Driven Payment Experiences: Customization and Seamless Flexibility in Payment Methods

play_circle_outline Accelerating Innovation: AWS, Partnership, and Modernization Transforming Payments

play_circle_outline Offering broader suite of financial services beyond payments

play_circle_outline Building reliable and scalable infrastructure for high performance transactions

Info

Mark Smith | AWS & Aakash Sahney | Stripe

Mark Smith

Head of Payments Market and Business Development AWS

Aakash Sahney

Head of Product, Stripe Connect Stripe

search

(bright music)

Shelly Kramer

>> Hello, I'm Shelly Kramer, Managing Director and Principal Analyst here at theCUBE Research. Welcome to this special CUBE conversation, which is part of the AWS Financial Services Partner series. The topic today is key themes in payments and what is happening across the industry, especially in terms of payment platform modernization. We're going to explore how reliability and scalability are helping drive innovation in the payment space. We're going to laser in on how Stripe is leveraging AWS to transform payments for enterprises and beyond, and we're going to talk through some industry use cases, including a look at automotive, retail, and FSI to help show sort of some examples of this transformation in action. Today I'm thrilled to be joined by Mark Smith, who's the Head of Payments Business and Market Development for AWS. And Aakash Sahney the Head of Product for Stripe Connect. Welcome, gentlemen. It's great to have you.

>> Thanks Shelly, thanks for having us.

>> Great to be here.

>> So we're going to kick off this morning's conversation

>> by talking a little bit about key themes in payments. Mark, I want to kick that off with you and see if I can talk you into kind of walking us through some of the key themes you and the team at AWS are seeing in the markets with your customers and so on as it relates to payments.

Shelly Kramer

>> Yeah, sure. And I'm fortunate enough to talk to customers every single day, and we hear a lot of themes with those payment customers and payment partners, but the overarching theme that we're hearing these days is all around payments modernization. Whether we're talking to a payment company that's been around for decades or centuries even, or a FinTech that just started up 10, 15 years ago, we work really closely with those payment customers and partners to make sure that, you know, they're not only building for today, but also building for tomorrow. And a lot of times that means just working backwards from what their customers want. So clearly their customers, whether they be a consumer or small business or enterprise, they want faster payments, more secure payments, and more and more they want customized or personalized payments as well. So the biggest theme we have with customers is how do they envision those fast, secure, customized products or applications for their customers where they want to be, right? And then continuing to innovate and iterate on those using the data that they've picked up along the way to continue to please those customers. So modernization, modernization, modernization is the theme that we're hearing more and more.

>> Yeah, well, and I think it's really, it all boils down to think about our own customer behavior, right? That's what all of us want. We want it to be fast, we want it to be easy, we want it to be personalized. You know, all of those things are expectations that we come into a relationship with a vendor with. So, you know, working to solve for that makes a lot of sense. Aakash, talk with us a little bit about what patterns you've seen, you know, Stripe, Stripe team has observed about platform payments and how that's impacting what platforms are doing to approach online customers.

Shelly Kramer

>> Yeah, for sure. I would say the most powerful trend that we've observed in the industry broadly over the last several years is just the verticalization in software platforms. So, you know, there are now software platforms for kind every corner of every SMB, every part of the economy has a software platform serving. Some of my favorites are Housecall Pro, which is a software platform for home service technicians, or Mindbody, the software platform for gyms and yoga studios. And you know, what all of these platforms or many of these platforms seen is a big opportunity to help their customers is to just sort of deeply integrate payments into the product experience and process payments on behalf of their users. And connect is sort of the core of our offering to help do that. And it's just been a really, really fascinating time to watch since I've been at Stripe.

>> Alright, Aakash, what I would love to hear more

>> from you about is why do platforms come to Stripe for modernization?

Shelly Kramer

>> Yeah, you know, we've now been in this space for over a decade. We've helped over 13,000 platforms embed payments in some way. And this is a really broad sense of the word platform. You know, I said earlier that embedded payments opportunities are really everywhere. So we see companies like Shopify, Lightspeed, Housecall Pro, software platforms that integrate payments for their users is a big category for us. Marketplaces like Lyft or DoorDash as well as, you know, large enterprises like BMW, integrating payments to smooth the experience for their users. So we've had a ton of experience across a number of different areas and you know, we're a very users first company, so over the course of that decade, we've really sanded down all of the parts of the experience and as much of the friction as possible to make it as smooth as possible for our platforms and of course for their end customers. That's the first thing is sort of, we've got a lot of experience in this area and it's one that's really core to sort of Stripe. Second, I would say one of the things we've learned, as I mentioned all of these really diverse users is that the needs are not one size fits all. So when it comes to embedding payments, we give platforms the ability to invest in the areas that they really want to invest in and offload the rest to Stripe. So, you know, if you want to build your own dashboard experience for your merchants and have a really tightly integrated experience, but you want Stripe to handle risk management, you can do that. Or if you want to take control of pricing but don't want to deal with risk management, again, you can do that. Or if you want to manage your own risk and use Stripes prebuilt dashboards, you can do that. So sort of all of the configurations are available for our users. Because again, payments, especially with such a diverse sort of user base of platforms is really not one size fits all. And then third is, you know, we definitely see that our customer's ambitions extend far beyond just payments and more widely out into a broader set of financial services. We offer Stripe Treasury, which allows platforms to offer sort of financial accounts to their users that they can earn yield with, send money with, and even use an attached card to spend with. And so just like a richer suite of financial services capabilities is really on the eyes of a lot of the platforms that we talk to and something Stripe tries to help with, with a wide suite of products.

>> It makes perfect sense.

>> I think one of the things that is especially important and attractive today is really just meeting customers where they are, and you said this, there's not a one size fits all solution and really respecting the fact that everybody's on their own unique journeys. And so being able to use the services, use the capabilities that they need, downsize when they don't need, that sort of thing, those kind of choices and that flexibility I think is what makes a vendor partnership incredibly attractive. And I think that's what customers are looking for.

Shelly Kramer

>> Totally, and I would say it's especially true in payments and financial services because there's such a wide set of complexity you can engage with or choose to engage with. You know, I think I mentioned earlier that we have, when platforms are expanding to new geographies, they have to make some decisions about which local payment methods they want to offer to their merchants. And so we offer some tools that allow them to give that configurability to their merchants really easily with embedded components. And yeah, there's just so much depth in this space that being able to pick and choose can really change how efficiently you can run.

>> Yeah, I'd say that's a Stripe superpower for sure. So why are platforms embracing embedded payments in finance? I mean, it kind of seems like a no brainer, but let's talk through that.

Shelly Kramer

>> Yeah, I think from my perspective, I think it all stems sort of like Mark mentioned from going to the end customer and working backwards. You know, very often if you're operating a home services business, a HVAC business, you use Housecall Pro to manage everything, to manage your scheduling, your bookings, your staff schedules, and it's only natural that payments and managing invoicing, collecting funds from customers would all be part of that experience from the home service professionals perspective. And so Housecall Pro of course has this really rich now financial services integration with payments and other financial services from Stripe to help make that experience really, really smooth, really tightly integrated and ultimately provide a better experience for the home service pro and their end customer.

>> Yeah, that makes perfect sense.

>> So Mark, I'm going to throw it to you now. What are some of the industry trends that you are looking ahead to that you think we'll see sort of shaping the embedded payment experiences that are in near term?

Shelly Kramer

>> Yeah, so building on what Aakash mentioned, you know, I think again, whether you're a consumer or small business or enterprise, you want to stay within that one experience, right? It doesn't make sense to bounce out for a payment transaction or bounce out for financing or to understand liquidity. So as much as possible, I think that these platforms are going to enable this more seamless experience. And I think in the future, what platforms and payment providers are going to be able to do is learn, right? So not only opening up access to new payment methods or new financing methods, or preferred financing methods or payment methods, but be able to learn in that experience, right? Payments is chockfull of data. So payment providers have a ton of historical and alternative data to use to I think drive what that next best experience is, right? They can test within the experience to see, you know, which payment methods are customers leaning towards, and then which perform better, which are customers more satisfied by, and even more so using a AI and ML to predict payment methods or experiences that were previously unthought of or that customers don't even know that they want. So I think the future is really exciting when it comes to what's next in embedded payments and financing.

>> Yeah, I think so too. And I think one of the things that's exciting to me, especially as, you know, we are in this age of rapidly evolving technology that certainly isn't going to slow down at all. And in fact, of course will speed up more, but I think that what's really interesting to see is that, you know, today we have the ability to develop something, launch it, watch what happens, watch what the customer experiences are, solicit customer feedback, and then tweak it as we go. And I think that's a huge benefit and something that we weren't able to really do 20 years ago. So that leads me to the next question I have for you, Mark, is do we have some examples of the combination of cloud tech and modern payment systems is really enabling a whole new set of experiences for customers. Do you have examples of that that we might share?

Shelly Kramer

>> Yeah, so I mean, more thematically, right? So we have a whole host of customers and partners on AWS across the whole spectrum of payments, whether it be on the consumer side, the institutional side, whether it be ancillary in terms of buy now pay later and credit extension or fraud prevention. But thematically, what we're seeing with our customers and partners is they're using cloud tech, they're using AWS because of its low cost structure and ability to not have to predict their success and overinvest in something that they want to try out. We're seeing that enable customers and partners be able to test and learn and invest in innovation and try new things, right? If they're able to spin up an application, test it out with some customers, and understand whether that's attractive to them, and then scale it up really quickly, not having to predict if it's going to be successful, really unlimits their ability to innovate. And contrary, if it does succeed or if it doesn't succeed, they can deprecate that really quickly and not spend a lot of money. So we see our customers and partners being able to use AWS to instill that culture of innovation and not being afraid to test and learn. And what that really means is there's just a ton of new product development, right? And we've got customers like Stripe that are not only doing really, really well in their core competence, but being able to try new things, whether it be different sectors of the value chain within payments or new value added services. So that's a big part of it. And then again, we've got customers just like Stripe that are trying to get into new geos, right? And the ability to speed up time to market, go to new places, and not have to spin up a data center or staff within a new region. Just being able to spin up, you know, a virtual environment within AWS also enables that kind of innovation. And lastly I'd say partnership, right? AWS has enabled a lot of customers and partners to find new customers and partners. There's a mindset of focusing on your core competence and for undifferentiated heavy lifting, just finding a partner, somebody that does that really well and not having to build that skillset or find that skillset in the market so that the inclination towards partnership is really thriving right now. Which I think, again, if you don't have to invest in something that is undifferentiated, you have the capacity to invest in innovation, which is really exciting.

>> Yeah, no, I agree. And I think we've been seeing this for a while now, certainly as it relates to digital transformation. It broadly, you know, the working with partners, trusted vendor partners, creating alliances, that really is the smart path because reinventing the wheel every step of the way doesn't make sense. And so, like you said, being able to quickly spur adoption at a low cost, sometimes in instances, I know that AWS even offers things at no cost, but being able to let people get in there, play around quickly deploy things, test and measure, you know, I really think that that's the magic and that's I think some of the beauty of working with AWS. I want to shift now and talk a little bit about embedded payments for SaaS platforms. Aakash, this one I'm throwing your way. Can you walk us through how Stripe is transforming payments for SaaS platforms?

Shelly Kramer

>> Yeah, so like I mentioned a little earlier software platforms inspired by sort of the needs of their users are increasingly bringing payments into the core of their experience. And I would say there's like a few things Stripe is doing in this area. You know, we've been in this space for over a decade now. We've helped over 13,000 platforms embed payments in some way. And that's everyone from, you know, we mentioned some vertical SaaS platforms like Housecall Pro or Mindbody, and also like large enterprises like BMW uses Stripe Connect our main product for software platforms to integrate payments and manage payments on behalf of dealers and consumers. And so I would say that's a big reason users use choose us is this experience having built up a bunch of this product capability over the last several years. Another area where I think we've really kind of observed the platform and embedded payments space evolving a lot is just that the needs of these customers are really not one size fits all, but when it comes to integrating payments we give platforms the ability to invest in the areas that they really want to invest in and offload the aspects to Stripe that they don't. For example, if you don't want to build every single sort of user experience inside of your product because you want to get to market quickly, you could use our embedded components to do that to sort of save yourself the development time and quickly get to market. And then third, I would say like, we've seen a lot of platforms ambitions go beyond just payments. So, you know, I mentioned Housecall Pro earlier and they now offer a rich suite of financial services to their home service pros. And so sort of no matter what industry you're in, platforms and marketplaces sort have to adapt their business models to these changing expectations of their users. And so they can take advantage of a whole suite of capabilities from Stripe, you know, global payments like our optimized checkout suite, the rich set of payment methods, other other capabilities from Stripe like our banking products like Stripe Treasury, Stripe Issuing to issue cards. So it's that whole suite of products that really make a difference for platforms.

>> Awesome. You know, one of the things we talked about a little bit at the beginning of this conversation was just the different industries that you're focused on and you know, I know financial services is one of them. There are, let's see, automotive, retail, you've talked a little bit about Mindbody, the home improvement. Do you have any other customer examples that you're able to share with us?

Shelly Kramer

>> Yeah, one example I'm particularly excited about is there's a company called MYOB, they're sort of a horizontal software platform for accounting. And they were able to build their integration using Connect in less than eight weeks using all of these embedded components that I mentioned and go live with this integration. And so, like I mentioned, time to market is just a big part of what we've tried to help platforms optimize. And that's a great example of a user getting live really fast.

>> Yeah. And the cool thing is that these solutions span, you know, and we talked about this at the beginning of the conversation, but this is not just enterprise use case. This is across the board solutions for businesses of all sizes. And I think that makes it attractive as well.

Shelly Kramer

>> Yeah, absolutely. >> Yeah, absolutely.

>> So there are some challenges. So what are some of the biggest challenges that platforms face when you're looking to embed payments?

Shelly Kramer

>> Yeah, I would say there are many challenges. It's not easy as much as we try to make it easy. The first one that comes to mind is geographic expansion. There are a lot of challenges that relate to just sort of local regulations around payments, payments complexities, the different payment methods that are popular in the different geographies that a customer wants to expand into. And so, we've introduced a bunch of capabilities around our onboarding suite that allows a user to quickly launch in a new market without having to adapt all of their systems to collect all the right information from their users. They can simply rely on Stripe to do that correctly. And every geography has its own sort of set of information you need to collect, set of information to verify and obviously ever changing requirements. We've also introduced some new capabilities to make geographic expansion easier, where platforms can now use a prebuilt Stripe component for configuring local payment methods. So again, rather than understanding all of the specific requirements of every single payment method that might be popular in a country you're looking to expand to, you can simply use this prebuilt component to do that. That's the first big category is geographic expansion in a regulated space can be really tough. So we try to build these tools to make that easier. Second, like I've mentioned, is time to market can be significant. So if a user is looking to integrate payments, really excited about the business opportunity, really excited to solve the use case and the problem for their users, it can take, and historically has taken some users, some platforms, years to actually get their payments offering up and off the ground. And so we've introduced embedded UI's and other capabilities to make it easier to integrate payments, to monetize payments and to sort of operate your payments business. So that's the second category. The third big one I'll mention is managing risk. You know, when you're in a field like payments, you have to worry about risk and reducing losses that your business can incur as a result of the businesses who are operating on your platform. And so how do you make sure that the merchants that you onboard are legitimate? How do you like monitor to make sure that merchants aren't about to go out of business? And so we've introduced some new tooling that allows platforms to quickly see like, what are the properties of this merchant? How are their disputes trending? What are their refund rates look like? Should I be worried about risk here? And some of the is the really powerful elements here is that these take advantage of the wider Stripe network. So if Stripe sees an account associated with your platform that is using a bank account that was previously rejected for fraud, we'll let you know and we'll say, hey, you might want to consider looking at this account. We think it might be fraudulent. And so those kinds of tools that enable platforms to kind of operate well. Again, trying to help address some of the challenges across all three of those geographic expansion, getting new features out the door, time to market, and managing risk.

>> So I hadn't thought about managing risk as a part of this value prop, but it makes perfect sense. So in addition to that, and I think that when people are thinking about looking to Stripe for their needs beyond payments the ordinary average things are kind of a given, but beyond, okay, so risk management, you threw that into the equation. I wasn't thinking about that. What other reasons would platforms turn to Stripe for needs that extend well beyond payments? There are some other things that we're not thinking about?

Shelly Kramer

>> Yeah, well, so there's a lot under that covers with payments. I think like probably the biggest category that I would mention here is the broader suite of financial services from Stripe. So a lot of platforms look to offer their users an ability to store funds so they can actually keep the money that they've earned in an account and they can send money to their suppliers or vendors, they can earn yield, that kind of thing. And again, this all goes back to creating the most seamless experience for their users that they can. So Stripe Treasury is our primary tool to enable that. We also offer Stripe Issuing, which allows you to issue cards on the balances that are held with Stripe. And so we've seen a ton of growth there. Platforms on Stripe have issued over 200 million cards globally now. And this wider suite of financial services that the customers of our platforms have started to demand from them is also a reason that our product suite has grown to help enable that.

>> Very cool. Very cool. Okay, I want to talk a little bit now about reliability and performance. And Mark, I'm going to turn to you. So talk with us a little bit about why payments, reliability and performance is so incredibly critical to platforms and organizations that want to build them.

Shelly Kramer

>> Yeah, so reliability, resiliency, security, they are paramount when I talk to our payment customers, and more importantly, it's paramount to them when they talk about their end customers. You know, it's all around trust, and trust is earned in drops and lost in buckets. And whether you're consumer or small business or a large enterprise, if you have a challenge with a payment method or failure, you have other options and if you lose confidence in that payment vehicle, you're less likely to try it. And if you have a couple of bad experiences, you're really not likely to try that. So earning and retaining that trust is critical. And so what that means for the customers we talk to is just building in a really resilient and scalable way. So our customers are constantly working with us and our solution architects to look at their architecture and going through well architected reviews and going through well architected reviews with a financial lens as well as like Aakash mentioned, making sure they're conforming to regulations and local regulations as well. So there's the trust component of that, and then there's just the expectation component. We've all just been conditioned at this point to expect very fast, very secure payments, again, whether you're a consumer or you're business. So the expectations are really high and that doesn't mean that the customer experience necessarily drives most of that. It's really the underbelly. It's what is the platform and the application built to withstand to ensure that those expectations are met. So most of my conversations when they go towards modernization, they quickly then go towards like, okay, well how are we going to build this modern platform, again, in a reliable resilient and conformant way?

>> Yeah, yeah. You know what, I am going to go on record as saying that I love these little gems of brilliance here. Trust is earned in drops and lost in buckets. I'm stealing it and forevermore are going to use that because it's perfect.

Shelly Kramer

>> I can't say it's an original. I'm pretty sure I saw that in movie somewhere, but it hit home with me.

>> Alright, well you stole it from somebody else and then it's all right.

>> Leveraged with pride.

>> I think that's perfect. And I think that, you know, listening to a conversation like this as both a business person, as a consumer, I think all of us can't help but think about our experiences. And the reality of it is it just takes one experience that you're walking through as a customer and a vendor not delivering. And the reality of today's customers is that we know there's a better way and we know we can find a better way, and we're not going to stick around and wait for you to have get it all figured out. You know what I'm saying? And really I think that the experience that you serve up and how quick and efficient and secure it feels, that sets the stage for an ongoing relationship. Deepening customer loyalty, all of those, you know, customer satisfaction, happy customers tell other customer, you know, all of those things. It's just these little details play such an important role in the experiences that we provide for customers. And it has everything to do with business success.

Shelly Kramer

>> Yep, it's a big part of customer obsession.

>> Yeah, absolutely. Okay, as we get ready to wrap this conversation, I want to talk for a minute about infrastructure, which of course plays a huge role in both reliability and performance. Aakash, I'd love to hear more from you about how Stripe is focusing on building infrastructure that ensures this high level of reliability and performance.

Shelly Kramer

>> Yeah, we have a long history of doing this at sort of the biggest spikes in volume, Prime Day, Black Friday, Cyber Monday, and we work with some of the biggest e-commerce platforms out there. And so that's given us sort of best practices and an organizational culture where we just put reliability really at the fore of everything we do. And that includes Amazon as a customer who we support under our broader partnership. And reliability is a team sport. Reliability is really critical to the payments experience. You know, if you imagine being a customer and running a payment and the frustration associated with a failed payment, that's amplified even further when you consider the business the merchant you're working with. And so running on AWS is really critical for supporting that kind of demand from our users. And so Stripe broadly now is at 5-1/2 nines of reliability and supporting a customer like Amazon as well at their peak volumes on these big sales events takes a big commitment from us as well.

>> You know, I think about the peak volumes that a company like Amazon has, and I don't know anybody, I don't know any company in the world that might have greater peak volumes than Amazon has. So I think that's a good indicator of the reality. I love the sentiment that this is a team sport, right? And we make it happen by working with amazing partners. And I think that that's exactly what we wanted to talk about today. Well, gentlemen, Mark Smith from AWS and Aakash Sahney from Stripe, thank you so much for joining us today. To our audience, you're listening to theCUBE, the place to go for enterprise tech news and insights. Thank you so much for joining us and we'll see you here again soon. (bright music)

Mark Smith | AWS & Aakash Sahney | Stripe

search

(bright music)

Shelly Kramer

>> Hello, I'm Shelly Kramer, Managing Director and Principal Analyst here at theCUBE Research. Welcome to this special CUBE conversation, which is part of the AWS Financial Services Partner series. The topic today is key themes in payments and what is happening across the industry, especially in terms of payment platform modernization. We're going to explore how reliability and scalability are helping drive innovation in the payment space. We're going to laser in on how Stripe is leveraging AWS to transform payments for enterprises and beyond, and we're going to talk through some industry use cases, including a look at automotive, retail, and FSI to help show sort of some examples of this transformation in action. Today I'm thrilled to be joined by Mark Smith, who's the Head of Payments Business and Market Development for AWS. And Aakash Sahney the Head of Product for Stripe Connect. Welcome, gentlemen. It's great to have you.

>> Thanks Shelly, thanks for having us.

>> Great to be here.

>> So we're going to kick off this morning's conversation

>> by talking a little bit about key themes in payments. Mark, I want to kick that off with you and see if I can talk you into kind of walking us through some of the key themes you and the team at AWS are seeing in the markets with your customers and so on as it relates to payments.

Shelly Kramer

>> Yeah, sure. And I'm fortunate enough to talk to customers every single day, and we hear a lot of themes with those payment customers and payment partners, but the overarching theme that we're hearing these days is all around payments modernization. Whether we're talking to a payment company that's been around for decades or centuries even, or a FinTech that just started up 10, 15 years ago, we work really closely with those payment customers and partners to make sure that, you know, they're not only building for today, but also building for tomorrow. And a lot of times that means just working backwards from what their customers want. So clearly their customers, whether they be a consumer or small business or enterprise, they want faster payments, more secure payments, and more and more they want customized or personalized payments as well. So the biggest theme we have with customers is how do they envision those fast, secure, customized products or applications for their customers where they want to be, right? And then continuing to innovate and iterate on those using the data that they've picked up along the way to continue to please those customers. So modernization, modernization, modernization is the theme that we're hearing more and more.

>> Yeah, well, and I think it's really, it all boils down to think about our own customer behavior, right? That's what all of us want. We want it to be fast, we want it to be easy, we want it to be personalized. You know, all of those things are expectations that we come into a relationship with a vendor with. So, you know, working to solve for that makes a lot of sense. Aakash, talk with us a little bit about what patterns you've seen, you know, Stripe, Stripe team has observed about platform payments and how that's impacting what platforms are doing to approach online customers.

Shelly Kramer

>> Yeah, for sure. I would say the most powerful trend that we've observed in the industry broadly over the last several years is just the verticalization in software platforms. So, you know, there are now software platforms for kind every corner of every SMB, every part of the economy has a software platform serving. Some of my favorites are Housecall Pro, which is a software platform for home service technicians, or Mindbody, the software platform for gyms and yoga studios. And you know, what all of these platforms or many of these platforms seen is a big opportunity to help their customers is to just sort of deeply integrate payments into the product experience and process payments on behalf of their users. And connect is sort of the core of our offering to help do that. And it's just been a really, really fascinating time to watch since I've been at Stripe.

>> Alright, Aakash, what I would love to hear more

>> from you about is why do platforms come to Stripe for modernization?

Shelly Kramer

>> Yeah, you know, we've now been in this space for over a decade. We've helped over 13,000 platforms embed payments in some way. And this is a really broad sense of the word platform. You know, I said earlier that embedded payments opportunities are really everywhere. So we see companies like Shopify, Lightspeed, Housecall Pro, software platforms that integrate payments for their users is a big category for us. Marketplaces like Lyft or DoorDash as well as, you know, large enterprises like BMW, integrating payments to smooth the experience for their users. So we've had a ton of experience across a number of different areas and you know, we're a very users first company, so over the course of that decade, we've really sanded down all of the parts of the experience and as much of the friction as possible to make it as smooth as possible for our platforms and of course for their end customers. That's the first thing is sort of, we've got a lot of experience in this area and it's one that's really core to sort of Stripe. Second, I would say one of the things we've learned, as I mentioned all of these really diverse users is that the needs are not one size fits all. So when it comes to embedding payments, we give platforms the ability to invest in the areas that they really want to invest in and offload the rest to Stripe. So, you know, if you want to build your own dashboard experience for your merchants and have a really tightly integrated experience, but you want Stripe to handle risk management, you can do that. Or if you want to take control of pricing but don't want to deal with risk management, again, you can do that. Or if you want to manage your own risk and use Stripes prebuilt dashboards, you can do that. So sort of all of the configurations are available for our users. Because again, payments, especially with such a diverse sort of user base of platforms is really not one size fits all. And then third is, you know, we definitely see that our customer's ambitions extend far beyond just payments and more widely out into a broader set of financial services. We offer Stripe Treasury, which allows platforms to offer sort of financial accounts to their users that they can earn yield with, send money with, and even use an attached card to spend with. And so just like a richer suite of financial services capabilities is really on the eyes of a lot of the platforms that we talk to and something Stripe tries to help with, with a wide suite of products.

>> It makes perfect sense.

>> I think one of the things that is especially important and attractive today is really just meeting customers where they are, and you said this, there's not a one size fits all solution and really respecting the fact that everybody's on their own unique journeys. And so being able to use the services, use the capabilities that they need, downsize when they don't need, that sort of thing, those kind of choices and that flexibility I think is what makes a vendor partnership incredibly attractive. And I think that's what customers are looking for.

Shelly Kramer

>> Totally, and I would say it's especially true in payments and financial services because there's such a wide set of complexity you can engage with or choose to engage with. You know, I think I mentioned earlier that we have, when platforms are expanding to new geographies, they have to make some decisions about which local payment methods they want to offer to their merchants. And so we offer some tools that allow them to give that configurability to their merchants really easily with embedded components. And yeah, there's just so much depth in this space that being able to pick and choose can really change how efficiently you can run.

>> Yeah, I'd say that's a Stripe superpower for sure. So why are platforms embracing embedded payments in finance? I mean, it kind of seems like a no brainer, but let's talk through that.

Shelly Kramer

>> Yeah, I think from my perspective, I think it all stems sort of like Mark mentioned from going to the end customer and working backwards. You know, very often if you're operating a home services business, a HVAC business, you use Housecall Pro to manage everything, to manage your scheduling, your bookings, your staff schedules, and it's only natural that payments and managing invoicing, collecting funds from customers would all be part of that experience from the home service professionals perspective. And so Housecall Pro of course has this really rich now financial services integration with payments and other financial services from Stripe to help make that experience really, really smooth, really tightly integrated and ultimately provide a better experience for the home service pro and their end customer.

>> Yeah, that makes perfect sense.

>> So Mark, I'm going to throw it to you now. What are some of the industry trends that you are looking ahead to that you think we'll see sort of shaping the embedded payment experiences that are in near term?

Shelly Kramer

>> Yeah, so building on what Aakash mentioned, you know, I think again, whether you're a consumer or small business or enterprise, you want to stay within that one experience, right? It doesn't make sense to bounce out for a payment transaction or bounce out for financing or to understand liquidity. So as much as possible, I think that these platforms are going to enable this more seamless experience. And I think in the future, what platforms and payment providers are going to be able to do is learn, right? So not only opening up access to new payment methods or new financing methods, or preferred financing methods or payment methods, but be able to learn in that experience, right? Payments is chockfull of data. So payment providers have a ton of historical and alternative data to use to I think drive what that next best experience is, right? They can test within the experience to see, you know, which payment methods are customers leaning towards, and then which perform better, which are customers more satisfied by, and even more so using a AI and ML to predict payment methods or experiences that were previously unthought of or that customers don't even know that they want. So I think the future is really exciting when it comes to what's next in embedded payments and financing.

>> Yeah, I think so too. And I think one of the things that's exciting to me, especially as, you know, we are in this age of rapidly evolving technology that certainly isn't going to slow down at all. And in fact, of course will speed up more, but I think that what's really interesting to see is that, you know, today we have the ability to develop something, launch it, watch what happens, watch what the customer experiences are, solicit customer feedback, and then tweak it as we go. And I think that's a huge benefit and something that we weren't able to really do 20 years ago. So that leads me to the next question I have for you, Mark, is do we have some examples of the combination of cloud tech and modern payment systems is really enabling a whole new set of experiences for customers. Do you have examples of that that we might share?

Shelly Kramer

>> Yeah, so I mean, more thematically, right? So we have a whole host of customers and partners on AWS across the whole spectrum of payments, whether it be on the consumer side, the institutional side, whether it be ancillary in terms of buy now pay later and credit extension or fraud prevention. But thematically, what we're seeing with our customers and partners is they're using cloud tech, they're using AWS because of its low cost structure and ability to not have to predict their success and overinvest in something that they want to try out. We're seeing that enable customers and partners be able to test and learn and invest in innovation and try new things, right? If they're able to spin up an application, test it out with some customers, and understand whether that's attractive to them, and then scale it up really quickly, not having to predict if it's going to be successful, really unlimits their ability to innovate. And contrary, if it does succeed or if it doesn't succeed, they can deprecate that really quickly and not spend a lot of money. So we see our customers and partners being able to use AWS to instill that culture of innovation and not being afraid to test and learn. And what that really means is there's just a ton of new product development, right? And we've got customers like Stripe that are not only doing really, really well in their core competence, but being able to try new things, whether it be different sectors of the value chain within payments or new value added services. So that's a big part of it. And then again, we've got customers just like Stripe that are trying to get into new geos, right? And the ability to speed up time to market, go to new places, and not have to spin up a data center or staff within a new region. Just being able to spin up, you know, a virtual environment within AWS also enables that kind of innovation. And lastly I'd say partnership, right? AWS has enabled a lot of customers and partners to find new customers and partners. There's a mindset of focusing on your core competence and for undifferentiated heavy lifting, just finding a partner, somebody that does that really well and not having to build that skillset or find that skillset in the market so that the inclination towards partnership is really thriving right now. Which I think, again, if you don't have to invest in something that is undifferentiated, you have the capacity to invest in innovation, which is really exciting.

>> Yeah, no, I agree. And I think we've been seeing this for a while now, certainly as it relates to digital transformation. It broadly, you know, the working with partners, trusted vendor partners, creating alliances, that really is the smart path because reinventing the wheel every step of the way doesn't make sense. And so, like you said, being able to quickly spur adoption at a low cost, sometimes in instances, I know that AWS even offers things at no cost, but being able to let people get in there, play around quickly deploy things, test and measure, you know, I really think that that's the magic and that's I think some of the beauty of working with AWS. I want to shift now and talk a little bit about embedded payments for SaaS platforms. Aakash, this one I'm throwing your way. Can you walk us through how Stripe is transforming payments for SaaS platforms?

Shelly Kramer

>> Yeah, so like I mentioned a little earlier software platforms inspired by sort of the needs of their users are increasingly bringing payments into the core of their experience. And I would say there's like a few things Stripe is doing in this area. You know, we've been in this space for over a decade now. We've helped over 13,000 platforms embed payments in some way. And that's everyone from, you know, we mentioned some vertical SaaS platforms like Housecall Pro or Mindbody, and also like large enterprises like BMW uses Stripe Connect our main product for software platforms to integrate payments and manage payments on behalf of dealers and consumers. And so I would say that's a big reason users use choose us is this experience having built up a bunch of this product capability over the last several years. Another area where I think we've really kind of observed the platform and embedded payments space evolving a lot is just that the needs of these customers are really not one size fits all, but when it comes to integrating payments we give platforms the ability to invest in the areas that they really want to invest in and offload the aspects to Stripe that they don't. For example, if you don't want to build every single sort of user experience inside of your product because you want to get to market quickly, you could use our embedded components to do that to sort of save yourself the development time and quickly get to market. And then third, I would say like, we've seen a lot of platforms ambitions go beyond just payments. So, you know, I mentioned Housecall Pro earlier and they now offer a rich suite of financial services to their home service pros. And so sort of no matter what industry you're in, platforms and marketplaces sort have to adapt their business models to these changing expectations of their users. And so they can take advantage of a whole suite of capabilities from Stripe, you know, global payments like our optimized checkout suite, the rich set of payment methods, other other capabilities from Stripe like our banking products like Stripe Treasury, Stripe Issuing to issue cards. So it's that whole suite of products that really make a difference for platforms.

>> Awesome. You know, one of the things we talked about a little bit at the beginning of this conversation was just the different industries that you're focused on and you know, I know financial services is one of them. There are, let's see, automotive, retail, you've talked a little bit about Mindbody, the home improvement. Do you have any other customer examples that you're able to share with us?

Shelly Kramer

>> Yeah, one example I'm particularly excited about is there's a company called MYOB, they're sort of a horizontal software platform for accounting. And they were able to build their integration using Connect in less than eight weeks using all of these embedded components that I mentioned and go live with this integration. And so, like I mentioned, time to market is just a big part of what we've tried to help platforms optimize. And that's a great example of a user getting live really fast.

>> Yeah. And the cool thing is that these solutions span, you know, and we talked about this at the beginning of the conversation, but this is not just enterprise use case. This is across the board solutions for businesses of all sizes. And I think that makes it attractive as well.

Shelly Kramer

>> Yeah, absolutely. >> Yeah, absolutely.

>> So there are some challenges. So what are some of the biggest challenges that platforms face when you're looking to embed payments?

Shelly Kramer

>> Yeah, I would say there are many challenges. It's not easy as much as we try to make it easy. The first one that comes to mind is geographic expansion. There are a lot of challenges that relate to just sort of local regulations around payments, payments complexities, the different payment methods that are popular in the different geographies that a customer wants to expand into. And so, we've introduced a bunch of capabilities around our onboarding suite that allows a user to quickly launch in a new market without having to adapt all of their systems to collect all the right information from their users. They can simply rely on Stripe to do that correctly. And every geography has its own sort of set of information you need to collect, set of information to verify and obviously ever changing requirements. We've also introduced some new capabilities to make geographic expansion easier, where platforms can now use a prebuilt Stripe component for configuring local payment methods. So again, rather than understanding all of the specific requirements of every single payment method that might be popular in a country you're looking to expand to, you can simply use this prebuilt component to do that. That's the first big category is geographic expansion in a regulated space can be really tough. So we try to build these tools to make that easier. Second, like I've mentioned, is time to market can be significant. So if a user is looking to integrate payments, really excited about the business opportunity, really excited to solve the use case and the problem for their users, it can take, and historically has taken some users, some platforms, years to actually get their payments offering up and off the ground. And so we've introduced embedded UI's and other capabilities to make it easier to integrate payments, to monetize payments and to sort of operate your payments business. So that's the second category. The third big one I'll mention is managing risk. You know, when you're in a field like payments, you have to worry about risk and reducing losses that your business can incur as a result of the businesses who are operating on your platform. And so how do you make sure that the merchants that you onboard are legitimate? How do you like monitor to make sure that merchants aren't about to go out of business? And so we've introduced some new tooling that allows platforms to quickly see like, what are the properties of this merchant? How are their disputes trending? What are their refund rates look like? Should I be worried about risk here? And some of the is the really powerful elements here is that these take advantage of the wider Stripe network. So if Stripe sees an account associated with your platform that is using a bank account that was previously rejected for fraud, we'll let you know and we'll say, hey, you might want to consider looking at this account. We think it might be fraudulent. And so those kinds of tools that enable platforms to kind of operate well. Again, trying to help address some of the challenges across all three of those geographic expansion, getting new features out the door, time to market, and managing risk.

>> So I hadn't thought about managing risk as a part of this value prop, but it makes perfect sense. So in addition to that, and I think that when people are thinking about looking to Stripe for their needs beyond payments the ordinary average things are kind of a given, but beyond, okay, so risk management, you threw that into the equation. I wasn't thinking about that. What other reasons would platforms turn to Stripe for needs that extend well beyond payments? There are some other things that we're not thinking about?

Shelly Kramer

>> Yeah, well, so there's a lot under that covers with payments. I think like probably the biggest category that I would mention here is the broader suite of financial services from Stripe. So a lot of platforms look to offer their users an ability to store funds so they can actually keep the money that they've earned in an account and they can send money to their suppliers or vendors, they can earn yield, that kind of thing. And again, this all goes back to creating the most seamless experience for their users that they can. So Stripe Treasury is our primary tool to enable that. We also offer Stripe Issuing, which allows you to issue cards on the balances that are held with Stripe. And so we've seen a ton of growth there. Platforms on Stripe have issued over 200 million cards globally now. And this wider suite of financial services that the customers of our platforms have started to demand from them is also a reason that our product suite has grown to help enable that.

>> Very cool. Very cool. Okay, I want to talk a little bit now about reliability and performance. And Mark, I'm going to turn to you. So talk with us a little bit about why payments, reliability and performance is so incredibly critical to platforms and organizations that want to build them.

Shelly Kramer

>> Yeah, so reliability, resiliency, security, they are paramount when I talk to our payment customers, and more importantly, it's paramount to them when they talk about their end customers. You know, it's all around trust, and trust is earned in drops and lost in buckets. And whether you're consumer or small business or a large enterprise, if you have a challenge with a payment method or failure, you have other options and if you lose confidence in that payment vehicle, you're less likely to try it. And if you have a couple of bad experiences, you're really not likely to try that. So earning and retaining that trust is critical. And so what that means for the customers we talk to is just building in a really resilient and scalable way. So our customers are constantly working with us and our solution architects to look at their architecture and going through well architected reviews and going through well architected reviews with a financial lens as well as like Aakash mentioned, making sure they're conforming to regulations and local regulations as well. So there's the trust component of that, and then there's just the expectation component. We've all just been conditioned at this point to expect very fast, very secure payments, again, whether you're a consumer or you're business. So the expectations are really high and that doesn't mean that the customer experience necessarily drives most of that. It's really the underbelly. It's what is the platform and the application built to withstand to ensure that those expectations are met. So most of my conversations when they go towards modernization, they quickly then go towards like, okay, well how are we going to build this modern platform, again, in a reliable resilient and conformant way?

>> Yeah, yeah. You know what, I am going to go on record as saying that I love these little gems of brilliance here. Trust is earned in drops and lost in buckets. I'm stealing it and forevermore are going to use that because it's perfect.

Shelly Kramer

>> I can't say it's an original. I'm pretty sure I saw that in movie somewhere, but it hit home with me.

>> Alright, well you stole it from somebody else and then it's all right.

>> Leveraged with pride.

>> I think that's perfect. And I think that, you know, listening to a conversation like this as both a business person, as a consumer, I think all of us can't help but think about our experiences. And the reality of it is it just takes one experience that you're walking through as a customer and a vendor not delivering. And the reality of today's customers is that we know there's a better way and we know we can find a better way, and we're not going to stick around and wait for you to have get it all figured out. You know what I'm saying? And really I think that the experience that you serve up and how quick and efficient and secure it feels, that sets the stage for an ongoing relationship. Deepening customer loyalty, all of those, you know, customer satisfaction, happy customers tell other customer, you know, all of those things. It's just these little details play such an important role in the experiences that we provide for customers. And it has everything to do with business success.

Shelly Kramer

>> Yep, it's a big part of customer obsession.

>> Yeah, absolutely. Okay, as we get ready to wrap this conversation, I want to talk for a minute about infrastructure, which of course plays a huge role in both reliability and performance. Aakash, I'd love to hear more from you about how Stripe is focusing on building infrastructure that ensures this high level of reliability and performance.

Shelly Kramer

>> Yeah, we have a long history of doing this at sort of the biggest spikes in volume, Prime Day, Black Friday, Cyber Monday, and we work with some of the biggest e-commerce platforms out there. And so that's given us sort of best practices and an organizational culture where we just put reliability really at the fore of everything we do. And that includes Amazon as a customer who we support under our broader partnership. And reliability is a team sport. Reliability is really critical to the payments experience. You know, if you imagine being a customer and running a payment and the frustration associated with a failed payment, that's amplified even further when you consider the business the merchant you're working with. And so running on AWS is really critical for supporting that kind of demand from our users. And so Stripe broadly now is at 5-1/2 nines of reliability and supporting a customer like Amazon as well at their peak volumes on these big sales events takes a big commitment from us as well.

>> You know, I think about the peak volumes that a company like Amazon has, and I don't know anybody, I don't know any company in the world that might have greater peak volumes than Amazon has. So I think that's a good indicator of the reality. I love the sentiment that this is a team sport, right? And we make it happen by working with amazing partners. And I think that that's exactly what we wanted to talk about today. Well, gentlemen, Mark Smith from AWS and Aakash Sahney from Stripe, thank you so much for joining us today. To our audience, you're listening to theCUBE, the place to go for enterprise tech news and insights. Thank you so much for joining us and we'll see you here again soon. (bright music)