Visa, American Express and Sequoia Capital have decided to pump money into Stripe, the hot Silicon Valley payment start-up, raising the company’s value to $5 billion (£3.2bn).
The news was reported earlier by Re/code and the New York Times.
Stripe is an American company that allows both private individuals and businesses to accept payments over the Internet. It serves as a backend "plumbing" that enables apps and online stores to take payments from anybody, anywhere.
For Stripe, companies like Facebook and Lyft are its customers, helping them accept credit card payments while being totally invisible to end users.
Stripe declined to disclose the amount of new funding, except to say it was “less than $100 million”, The New York Times says.
The deal with Visa works as a two-way partnership - Stripe will take advantage of Visa's security know-how to help protect shoppers' financial information, and Visa will tap Stripe's technical expertise to work on new kinds of digital payments.
“As Stripe thinks about the best ways to move the overall payments ecosystem forward, the biggest determinants on the financial side are the credit card networks,” Patrick Collison, co-founder and chief executive of Stripe, said in an interview. “We hope to continue working closely with them.”
Unlike other payment services, including PayPal and fully integrated e-commerce solutions such as Shopify, Stripe specifically focuses on providing the technical, fraud prevention, and banking infrastructure required to operate online payment systems.
Notable online companies that use Stripe as their default payment processor include Fitbit, Kickstarter, reddit, Twitter, Wired, Salesforce.com, Squarespace, Encyclopedia Dramatica and The Guardian.