Financial infrastructure platform for businesses Stripe has announced the launch of a new charge card programme for its commercial card issuing product, Stripe Issuing. The charge card programme looks to enable fintech startups and platforms to provide expense cards with flexible credit options in an easy manner, and it runs on Stripe Issuing, which has created over 100 million cards and supports half a million transactions a day.

Stripe’s charge card programme Based on the information provided in the press release, the addition of charge cards enables fintechs and platforms to create and distribute virtual or physical charge cards that let their customers spend on credit instead of the funds in their accounts, thus offering new revenue streams for platforms and helping them provide their customers with new financing capabilities. Denise Ho, head of product for BaaS at Stripe said that whether a small business is just starting out, or aiming to expand, having access to capital can make all the difference, and the new charge card looks to allow fintechs and SaaS platforms to offer access to a reliable credit source for the multitude of small businesses they work with. Following its 2018 launch, Issuing has been leveraged by platforms and fintechs for the creation of more than 100 million cards in the US, the UK, and the EU, and up until this point, Stripe-issued cards could be used only to spend money from a pre-funded account.

Following the expansion into charge cards, platforms can provide these same users with access to credit, and cardholders can spend up to their credit limit and pay back the outstanding balance and the end of each month. Building a charge card programme with Stripe Issuing A May 2022 Goldman Sachs survey highlights that 77% of SMBs expressed concern about access to financing. Per the press release, software companies can assist by offering access to capital that their customers leverage to further growth, and the addition of a charge card programme is thought to help platforms to create increasingly deep and profitable connections with their customers.

However, building a credit offering brings forth complexities, and platforms would have to collect repayment, handle lending compliance, and navigate licensing requirements, amongst others. Issuing’s charge card programme handles these issues out of the box, enabling platforms to provide access to credit in an expedited manner with decreased additional operational costs. Issuing offers the core components of a charge card programme, of the likes of funds flows, network connections, printing, and integration APIs, and helps simplify the required compliance, bank partnerships, and ledgering.

Businesses can set individual credit limits and repayment schedules, together with flexible weekly, monthly, or set-day repayment options. When they need to collect repayments from customers, businesses can leverage Stripe’s suite of products, such as no-code and embeddable options like Invoicing and Checkout. What is more, the charge card programme offers flexible funding options for platforms.

Once a card is leveraged to carry out a purchase, the transaction needs to be funded, and most card programmes require the platforms providing the card to cover the transaction instantly, which forces platforms to maintain extensive cash balances. Issuing enabled platforms to send funds to Stripe after the transaction settlement date, which assists them in reducing the funds they need to keep in reserve, thus freeing the cash for other purposes. Available in beta in the US, the charge card programme is used by names such as Ramp, Emburse, Karat, and Coast, and is set to further expand to the EU and the UK in the time to come.

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