OTTAWA — While its marquee Canadian clients watch their growth slow, and fellow fintech firms face fundraising challenges, Stripe’s recently appointed country head sees plenty of opportunity in this market. “Payments is obviously where it started,” said Jim Lambe, the company’s first general manager for Canada. But there’s lots of demand for its other software and financial products, he told The Logic, including the banking features it’s eventually planning to launch here. 

Stripe, headquartered in South San Francisco, Calif., got its start in 2010 as a few lines of code that allowed companies to accept credit-card payments online. Other Silicon Valley startups became its first customers, and Stripe has since raised US$2.23 billion, according to PitchBook data, including a US$600-million round in March 2021 that lifted its valuation to US$95 billion. 

The firm crossed the border early, launching to Canadian clients in September 2012. But its growing corporate presence is more recent. In September 2021, Stripe announced it would open a Toronto office. Lambe joined in March from Google, where over the course of six years he grew the tech giant’s cloud service in Canada from four to more than 400 staff and over $700 million in annual revenue. Stripe’s Canadian business “is an opportunity to try to recreate some of that magic and build a market,” he said, in his first interview since taking the role.

While the firm won’t disclose revenue figures, Lambe said Canada is among its top three markets globally. Stripe has found particular success with companies that sell software or services to other businesses, and Lambe notes that Canada is “a net exporter of platforms.” Stripe takes care of the transaction technicalities, leaving such firms free to build new business models here that they then put to work in the adjacent U.S. market. 

Ottawa-headquartered Shopify was one of the first to test Stripe in Canada, and now owns a stake in it. Under a deal signed in 2013, Shopify Payments, a significant revenue generator, is built on top of Stripe’s processing capabilities. The U.S. fintech firm’s other Canadian digital-commerce clients include Montreal-based Lightspeed Commerce and Toronto-based Clearco. Edmonton’s Jobber, which makes software for home-service businesses, also uses Stripe.

Winnipeg-based SkipTheDishes, now owned by JustEat Takeaway.com, was another early client. When a diner orders delivery, Stripe handles all the money that passes between a user, app, driver and restaurant. 

Stripe is targeting a wide range of customers beyond platform companies. “The strategy of the company is to win and keep all startups,” said Lambe. It is also now getting enterprise business, such as traditional retailers looking to sell across the real and online worlds. For such clients, Stripe’s technology can replace multiple applications for functions like billing, fraud detection and subscription-management payment, in addition to payment processing.    

Many of the company’s most prominent Canadian clients have seen growth slow this year, as consumers to whom their own customers sell clamp down on spending, particularly online, amid recession fears. That affects Stripe, because its revenues are linked to payment volumes. 

Lambe played down the impact. “Our business continues to grow pretty significantly [in] Canada,” he said. Stripe is also selling existing clients on software and financial products beyond payments. In September 2021, for example, the firm launched its sales-tax calculator and card reader in the Canadian market. “Beyond payments, we’re becoming a stickier, more cost-effective solution, because of all those other things,” said Denise Ho, head of product for Stripe’s banking-as-a-service (BaaS) division.

Stripe plans to bring other offerings north, including BaaS, Lambe said. Some clients currently use the firm’s Treasury APIs, launched in December 2020, to give their customers business accounts at financial institutions like Goldman Sachs and Barclays from within their own platforms. Shopify uses it for its Balance service, which it opened to most U.S. merchants in January. 

Stripe’s Issuing feature lets firms offer payment cards, both virtual and plastic; the car-rental firm Zipcar uses it for its gas cards. And Lightspeed and Jobber built their financing offerings for U.S. merchants on top of Stripe Capital. 

The firm’s banking features would give Canadian clients another set of services to offer their customers, though Stripe has not yet set a launch date for them in this country. “The demand is there,” said Lambe. “What’s not there today is a product set that makes it easier.” Added Ho: “When we find the right partners and we’re able to put the regulatory stuff together, it’ll roll out.” 

Many domestic fintech firms have pushed the federal government to follow through on commitments to implement an open banking regime, which would enable or require customer-directed data sharing between financial-service providers. In May, Stripe announced Financial Connections, a set of APIs its clients can use to connect to customers’ bank accounts. “We’re fully behind open banking,” said Ho. Stripe declined to say whether it had participated in the policy process, but federal disclosures show it is represented on working group developing accreditation criteria for the system.

“I look at open banking as an API framework,” said Lambe, noting, “Stripe is simply one of those API sets that organizations can take advantage of.” While that may open up some new business, “there are enough opportunities for Stripe in the current market we have today.”

The firm is also expanding its corporate presence in Canada. In December 2021, it absorbed Toronto-based OpenChannel, an app-store platform. Lambe declined to comment on whether Stripe is scouting further acquisitions or investments in Canada. 

The company now has hundreds of its 8,000-plus employees working in Toronto, or remotely across the country, he said, although the company would not disclose exact figures. While many domestic and multinational tech firms have slowed or frozen recruitment in recent months, Stripe is continuing to hire in Toronto in product, engineering and sales; it currently has 16 open positions.

Update: This article has been updated to include information about Stripe’s participation in the federal open banking process.