Strategy Breakdowns
Posts
🎯 Stripe's $1.4 trillion platform strategy

🎯 Stripe's $1.4 trillion platform strategy

Grow the internet. Grow revenue.

September 03, 2025

Read time: 3 minutes 22 seconds

It’s come up to 2 years since I started Strategy Breakdowns.

Those that have been here a while know what that means.

For the 65,183 of you that joined since I first started “building-in-public”, here’s the story so far:

6 months into Strategy Breakdowns

The Strategy Breakdowns Tech Stack

1 year into Strategy Breakdowns

(Re)Designing Strategy Breakdowns

1 year full-time on Strategy Breakdowns

The Lean Creator

Some are just here for the Strategy Breakdowns case studies - totally cool with me. Appreciate each and every one of you.

Others are here for the Strategy Breakdowns story too. If that sounds like you - I’ve been working tirelessly in the background on something new just for you.

— Tom

Live Demo: Accelerate security and compliance workflows with AI

Vanta’s growing suite of AI-powered tools is transforming security and compliance workflows.

If you’re curious to see how it works, join us for a live demo. We’ll walk you through how Vanta’s AI features simplify your compliance process, plus you’ll have the opportunity to ask live questions.

Date: Tuesday, September 23, 2025
Time: 11:00 AM AEST | 1PM NZST
Location: Virtual / Live Webinar + Q&A

60% of my computer time is spent using AI. I use my voice (not my keyboard) to use it.

Wispr Flow is one of those apps I downloaded and have used 20x per day ever since.

Works in every application seamlessly
Personal dictionary learns your unique words
AI auto-edits turn rambling into clear, formatted text

_{Thank you for supporting our sponsors, who keep this newsletter free.}

Stripe's $1.4 trillion platform strategy

Chess Move

The what: A TLDR explanation of the strategy

If you’ve ever bought anything online using a card, you’ve probably used Stripe.

Definitely seen this a few too many times (like 90% of US adults).

Stripe has become the internet’s default payments solution by turning other platforms into its primary growth channel.

Stripe started as a simpler way for online businesses to accept payments online.

But early on, they identified that platforms (as opposed to stores) accounted for a disproportionate number of Stripe checkouts.

Instead of chasing individual merchants → They partnered with Shopify to enable all ecommerce store owners to use Stripe.
Instead of chasing every cab and taxi company → They partnered with Lyft to enable all partner drivers to use Stripe.

In essence, they became the financial plumbing of other fast-scaling products.

As platforms like Shopify and Lyft acquired new users (at exponential rates), Stripe did too.

Each integration with a popular platform brought Stripe thousands (sometimes millions) of new users organically, often without the user even realising they were using Stripe (e.g. “Shopify Payments” is powered by Stripe).

It’s Stripe all the way down.

By becoming the de-facto default transactions engine for digital platforms, Stripe has grown into a payments powerhouse processing around $1.4 trillion annually.

Or 1.3% of global GDP.

💡

Strategy Playbook: Grow your users as your users grow.

Breakdown

The how: The strategic playbook boiled down to 3x key takeaways

1. Frictionless integration wins developers

Stripe made integrating payments ridiculously easy - a stark shift from clunky incumbents.

This ease became their gateway into countless products.

Now it’s one thing to create a standardised plug-and-play checkout, (e.g. ecom stores).

But Stripe bet on winning larger engineering orgs building complex products by maintaining a relentless focus on developer experience:

Clean APIs
Quick-start tools
Customisation and flexibility
Arguably the world’s best dev docs (or 2nd?)
Ease to get up and running (including for complex build-outs)

Even teams building apps as complicated as Lyft or Shopify can largely self-serve.

On top of every dev’s wish list → great documentation

Stripe turned payments into a copy-pasteable (today, generative-AI-able) process.

By building a product devs loved, Stripe became the first-choice payments solution for teams of builders, seeding its own future distribution.

2. Platform lock in

Typically, financial products are very sticky:

Switching costs are high
Data is complex and sensitive
Migration hassles are rarely worth the ROI

So people don’t typically move to competitors unless there are strong reasons why.

By launching payment-adjacent services (fraud prevention, analytics, lending, etc.), Stripe sought to make itself a one-stop financial toolkit for platforms → making their core payments product even stickier.

For example, a fintech platform starts with Payments → then adopts Billing for subscriptions → then moves onto Issuing to offer credit cards → finally to Treasury to provide bank-like services.

Stripe’s product menu = Fintech’s final boss.

Each additional service adopted increases the switching costs, making Stripe increasingly indispensable.

This is amplified further when you consider Stripe’s global expansion (supporting hundreds of currencies and local payment systems). A huge advantage over standalone or localised competitors.

Stripe were also deliberate in tailoring their product development priorities to the needs of platforms and marketplaces.

Take Stripe Connect, which launched in 2013 to address the unique requirements of multi-sided platforms.

Connect provides plug-and-play support for things like:

Splitting payments
Enabling third-party sellers
Paying out marketplace vendors

Think about it like this:

Core Payments = Customer pays money to purchase clothes → Stripe processes payment and takes commission → Clothing store receives payout.

→ 3 parties: Customer + Store + Stripe

Connect = Tourist pays money to book short-term rental → Stripe processes payment and takes commission → Airbnb takes platform commission → Host receives payout.

→ 4 parties: Tourist + Host + Airbnb + Stripe

Complexity simplified.

Stripe added the ability for platforms to charge additional fees (for example, Substack charges creators a 10% platform fee on each subscriber payment, on top of Stripe’s standard transaction fees) so that platforms could monetise payments themselves.

Turning payments from a cost centre into a profit centre.

By focussing on meeting the nuanced needs of platforms, Stripe became an infrastructure partner (high switching costs) rather than a commoditised vendor (race to the bottom).

3. Win-win ecosystem

Stripe built a comprehensive Partner Ecosystem program to provide platform partners with technical resources, co-marketing opportunities, and even financial incentives to use Stripe at scale.

Supporting, rewarding, and locking in high-value customers with fast-growing user-bases.

A win for both the platforms and Stripe

Joint marketing initiatives (e.g. featuring partners in Stripe case studies, social media, and events) created social proof for Stripe, while accelerating their platform customers' growth.

Customers as the heroes.

Invitations to early access programs, Discord channels to engage with Stripe PMs, and GitHub repos to submit development tickets creates tight feedback loops for Stripe, and lets platform customers shape Stripe’s roadmap towards their needs.

Copywriting hack: Calling your thing “XYZ insiders” makes it instantly desirable

Stripe developed 5 ‘Partner Tracks’ featuring a tailored suite of benefits for each partner archetype.

Still waiting for Partner Track #6: Newsletters

Each track contains its own tiered incentive structure, where hitting certain targets (app installs, $XXm transaction volume, referral revenue, etc) unlocks better benefits.

$100m in payment volume - easy. What else?

The program itself is designed to accelerate Stripes platform distribution over time.

Win-Win → More revenue on both sides → More ways for Stripe to support its ecosystem partners → Stripe’s partners grow faster → More goodwill is created → More platforms are attracted to Stripe → More win-wins → …