Digital Payments Startup Stripe Eyes Southeast Asia and India to Expand
One of the world’s top digital payment players, Stripe, will soon be entering Southeast Asia and India to expand its overseas operations.
The global digital payments player, which operates in 25 countries, recently raised $245 million in funds to expand to new markets globally and attract bigger customers.
“More than 500 million people in Southeast Asia and India are expected to become online customers in the next three years,” says Stripe.
The latest funding makes the company’s valuation $20 billion in total, which is approximate, two-times growth from 2016 as the last valuation of a startup was $9.4 billion. The funding round was led by top investors including, Chase Coleman’s venture capital firm Tiger Global Management, along with DST Capital and Sequoia.
With the growing e-commerce industry, the overseas expansion of San Francisco-based startup indicates the boom of cross-border payment platforms globally. The global company Worldplay found in its latest Global Payments Report that the Asia Pacific e-commerce market will grow by an average of 12 per cent annually, and is set to be worth $2,100 billion by 2021. The surge in online payments will eventually give a lead to more digital payment startups.
Founded in 2010, Stripe garnered the likes of top Silicon-based companies like Uber, Google and Spotify in a short span of time. In a statement to Reuters, the company’s co-founder John Collison says, “We think this investment will be helpful as we continue to march upmarket and serve these larger companies.”
Stripe has recently partnered with China’s top digital payment providers Alipay and WeChat Pay to enable merchants using its platform globally to accept payments from the thousands of Chinese customers.
Changing Payments Landscape
The digital payment market of Asia Pacific is climbing the growth ladder owing to the increasing smartphone penetration and better internet connectivity. A February report by yStats.com, observes the changing landscape of digital payments in the Asia Pacific. According to the report’s findings, “E-wallet is the leading payment method used by online buyers in the Asia Pacific, outranking payment cards and bank transfers.”
The report highlights that digital wallets not only dominate the e-commerce landscape but are also transforming the way tech-savvy consumers in Asia make payments in their daily lives.
The entry of global players in the Asia Pacific region like PayPal, Payoneer, and now Stripe validates the growing potential in the market along with the changing preferences of consumers. A 2017 report of East & Partners shows the growth in acceptance of digital payments in India, China, Malaysia, Singapore, Japan and Indonesia whereas other countries like Australia still lags behind.
For example, in Australia, which has 84 per cent adoption of smartphones according to 2016 Deloitte’s Mobile Consumer Survey, East found that just 19.5 per cent of all Australian merchants have “mobile friendly” websites, while less than one in three of those businesses accept mobile payments via their website. Australian merchants do however see this as a growing area of importance, driven small to medium businesses, who want to be where their customers are.