The news: UK-based neobank Revolut partnered with Stripe to support payment processing in the UK and Europe. The tie-up will also help Revolut’s expansion in Latin America and possibly India and the Philippines, per Bloomberg.
Key context: Stripe processes payments in more than 135 currencies and in over 47 countries, making it an attractive provider for businesses with a growing global presence, like Revolut.
The pandemic helped supercharge Stripe’s business. Many firms turned to the processor to support the massive rise in ecommerce: Worldwide retail ecommerce sales surged 27% year over year (YoY) in 2020—and that trend carried into 2021 with a 17.1% YoY increase, per eMarketer forecast from Insider Intelligence. This fueled double-digit growth for Stripe; it processed a whopping $640 billion in payments in 2021.
Revolut’s opportunity: Stripe’s infrastructure can help Revolut improve its payments business as it sets out to become a bigger player in the sector.
Since money transfers are a core piece of Revolut’s business, it’s important that it works with a provider that can support cross-border transactions and frictionless processing.
Stripe’s benefit: Revolut can help extend Stripe’s reach as the neobank builds out its international presence. And its 15 million customers as of June can help boost Stripe’s revenues as the tech fallout threatens to hamper growth—the company’s valuation has fallen 35% since the start of the year
The big takeaway: As global cash use declines, Revolut and Stripe’s tie-up can help fuel growth for both companies.
Stripe’s infrastructure can help Revolut strengthen its payments business and potentially opens the door to other tie-ups that can improve its standing in the payment sector. And Stripe can use Revolut to grow its reach and sustain revenues as it contends with market headwinds.