Fintech startup Stripe, has announced a new product, Stripe Treasury, that will introduce embedded banking into Stripe’s current suite of payment products. Stripe is partnering with banks to offer customers banking-as-a-service API that enables wire transfers, interest-earning accounts, and faster access to payment funds, all within the Stripe platform. Stripe takes care of the bank negotiations, compliance processes, and regulatory requirements, thereby allowing clients to focus on their core businesses.
Stripe’s announcement is a part of a larger trend called “embedded finance” which aims to collapse the chain between financial services, intermediary businesses, and the end customer. In doing so, embedded banking creates a frictionless system in which clients can scale their businesses by incentivizing purchases and streamlining the payment process.
While other companies such as Wise have been working on embedded business banking products, Stripe could capitalize on its pre-existing consumer base to propel its Stripe Treasury product. Nevertheless, Stripe does not want to become a bank; the company is focused on infrastructure and payments. Stripe will partner with banks such as Evolve Bank and Goldman Sachs in the U.S. and will eventually extrapolate this strategy to other jurisdictions.
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