AAKASH SAHNEY: Good afternoon, everyone. My name is Aakash, and I lead Product for Stripe Connect. Welcome to the Platform Payments breakout session.

For more than 11 years, Stripe has built and refined a solution called Stripe Connect to help our customers embed and monetize payments.

Stripe Connect is used by the world’s largest and most popular software platforms and marketplaces and, as we’ll see during this talk, many more novel business models.

Stripe Connect now powers over 12,000 platforms and the 7 million businesses and individuals that those platforms serve. Today, we’re going to share what we’ve learned from supporting all of these businesses. So whether you’ve been embedding payments into your products for years or you’re just getting started, we think you’ll learn something new today.

So here’s what we’re going to cover. First, we’re going to go back to basics and talk about what it takes to get platform payments right. With the growing popularity of embedded payments, this is more important than ever. You’ll hear from Jobber, one of our fastest and most and fastest growing and most successful platforms about what it takes to build a great platform payments business.

Second, we’re going to think outside the box and show you that the opportunity to incorporate payments into your products is everywhere, and it might not be in the ways that you would think. We’ll examine really innovative platform, marketplace, and franchise use cases and hear how Microsoft is thinking about this opportunity.

Finally, we’ve heard from so many of you that these days you feel stretched. Customer expectations are rising, but macroeconomic conditions make it hard to do it all yourself. So we’ll share some common pitfalls that we’ve observed and discuss how Stripe’s roadmap can help you do more with less.

So let’s get started with getting platform payments right. As you heard in the keynote this morning, the software platform business model has grown incredibly quickly over the past several years.

Take these three public market companies. In 2022, they earned 51% of their total revenue from their integrated payments products. What’s more is that 75% of businesses say that they’re likely to embed payments or financial services into their products in 2023. And this number is not just for SaaS platforms or marketplaces. The audience for this survey was all businesses, regardless of their current business model or their industry.

So these numbers tell us that there’s a big opportunity to integrate payments into your products, but, like, what’s the root cause? Like where is this trend actually coming from?

Fundamentally, it’s coming from the needs of your users, from your customers. As a general rule, they want to consolidate vendors and simplify their daytoday operations so that they can focus on their customers and their products.

For example, consider a gym. Rather than operating their website from one service, managing online signups through another service, and taking in-person payments through their local bank, they can now use Mindbody, a single platform that’s purpose built to help gyms run efficiently across the board.

And this same trend of one-stop shop software platforms is happening for every kind of business. Plumbers and painters using Jobber, nonprofits using Blackbaud, and restaurants using Lightspeed.

And in 2023 specifically, 70% of businesses say that they plan to consolidate the number of software products that they use. This means that for software platforms, integrating payments is an essential step in becoming a one-stop shop.

But as many of you in the room know, this takes some work. It’s not as simple as just turning on credit card payments and watching the revenue flow in. So let’s show you the common journey that software platforms take as we’ve seen it, and we call these different stages SaaS 1.0, 2.0, and 3.0.

First, SaaS platforms tend to monetize at the beginning via subscription revenue, like a monthly fee that they charge their customers. We call this SaaS 1.0. Then they evolve to SaaS 2.0. They integrate online payments into their products, and they start monetizing that as well. They also add in-person terminals for customers to accept payments face-to-face and add additional payment methods. Then they evolve to SaaS 3.0. Once their payments business is successful and growing, they expand to offer their customers access to more financial services like instant payouts, loan offers, and card programs.

Now, while there’s a lot of enthusiasm for embedded payments, you know, 75% of businesses looking to integrate payments in some way, we’ve seen the platforms very often get stuck on the transition from 1.0 to 2.0, sort of building and growing their payments business in the first place.

So today we’re going to learn from Jobber’s experience. Jobber is one of the fastest-growing and most successful platforms that’s been on this entire journey, and we’re going to hear what they did right, what they wish they did differently in growing their really successful payments business.

So to talk about this in detail, I’d like to welcome Kate Jensen, Stripe’s head of platform sales, and Jeff Sherlock, the SVP of Product at Jobber. Kate and Jeff.

(Applause & Cheers)

KATE JENSEN: Thank you, Aakash.

JEFF SHERLOCK: Oh, wow.

KATE JENSEN: Hi, everyone. I’m Kate. I’ve been at Stripe for over six years now, and I work with so many of our software platforms. I’m thrilled to be here with Jeff from Jobber today. As Aakash mentioned, Jobber is one of our fastest growing and most innovative software platforms.

Jeff, thank you so much for being here. Can you introduce yourself and tell us a little more about what you do.

JEFF SHERLOCK: Sure. Hi, everyone. I’m Jeff Sherlock. I’m SVP of product at Jobber, and I oversee our product management and product design functions, including our fintech product org. So deeply involved in the fintech and payment space.

KATE JENSEN: And can you tell us a little bit more about what Jobber does.

JEFF SHERLOCK: Sure, happy to. So Jobber is an operational workflow management software for small home service businesses that allows them to easily quote, schedule, invoice, and collect payment from their customers. So think plumbers, painters, HVAC.

And we today service over we serve over 200,000 service pros across 60 countries, and we have -- you know, over $40 billion have been invoiced on Jobber. So we’ve grown a lot over the years, and I think we have a pretty cool piece of software.

KATE JENSEN: It’s pretty incredible the scale that you’re operating at.

JEFF SHERLOCK: Yeah. Yeah.

KATE JENSEN: And I know you’ve told me before some of the stories about how you really got started, some of the people you’re building for. To bring it home to the audience, can you tell us a little bit about one of your most canonical users?

JEFF SHERLOCK: Sure. So the way that we got started was up in Edmonton, Canada, our founders, Sam and Forrest, were working with Graham of Painters Enterprise. And Graham ran a three-person painting business and had a lot of, frankly, complexity managing all of the pen and paper invoices, the schedules, collecting payments. The whole thing was just really complicated. And reached out to Sam and Forrest and local software developers, and they began to work with Graham to simplify and streamline the way his business was run.

And through that process, the aha moment for Sam and Forrest was realizing that the same problems that Graham faced were very common across lots of other types of businesses. So while they were building it for Graham, they realized that, you know, a lot of plumbers, a lot of landscapers had very, very similar problems. And so that’s when they began to really invest in making this a sort of common platform to build off of.

KATE JENSEN: I love that. I’m sure that story really resonated with a lot of you here in the audience. I think one of the things I love most about our work here at Stripe is learning stories like that, learning who you’re building for

JEFF SHERLOCK: Yeah.

KATE JENSEN: and what you’re really building. Tell us about how you thought about payment specifically. We are at a Stripe event. How did you think about and when did you think about building payments into your product?

JEFF SHERLOCK: Great question. So the story with Graham, I mean, that was, you know, 10, 12 years ago. So we’re sort of transporting a little bit back in time. But when you think about payments specifically, collecting payments was and still is one of the most frictionful and, frankly, cumbersome parts of running a small home service business.

We hear stories all the time about service pros having to, you know, pick up a soggy check that was left underneath a wet doormat to having to drive back to someone’s house to collect payment because the homeowner wasn’t there. So all of these things, you know, really gave some insight into the friction involved in collecting payments for our customers.

So fast forward to 2015, 2016, and we had some very, very basic payments. I don’t even want to call them integrations, but for lack of a better word, we’ll call them integrations. And we began to see that Stripe at the time was really pulling away with this best-in-class developer experience that we wanted to build off of.

We began to see that a lot of our sort of adjacent products were beginning to add this payment thing, and so we decided that we should probably invest in this, but the way we thought about it was sort of naive to some extent. We really approached it from the perspective of creating a best-in-class experience, because we viewed the benefit as one of retention, not really revenue.

So we were trying to design the experience around how do we create the best experience for the service consumer and the service pro, not necessarily the one that was going to derive us the most money.

So that was a very, very interesting kind of phase of rolling out payments was, you know, creating this great experience and sort of learning along the way.

KATE JENSEN: I love that. As we learned in the keynote earlier and what Aakash referenced earlier, payments can be really complex, and there are a lot of different pieces to building payments into software.

JEFF SHERLOCK: Yeah.

KATE JENSEN: Where did you start? What were the things that mattered most for your MVP?

JEFF SHERLOCK: Yeah, great question. So most small businesses don’t want to have to manage 10 or 20 different pieces of software. They come to us, and they buy our solution because they’re looking for simplicity.

So when we started out, it was how do we create the most deadsimple solution. It wasn’t, you know, how do we provide, you know, the most options; it was, okay, how do we provide a dead simple solution.

So we really started with the credit card payments as the as really sort of the starting point. And when we think about where we embedded that, it was looking at our existing flow and starting off with the most common flow that we had, which was let’s allow the service pros a way to tell their customers how much was owed, send them an invoice, have them be able to pay that invoice digitally, and then tell the service pro this is how much money you made in a report monthly or weekly.

That sounds sort of comically simple and was a very we learned a lot of sort of hardfought lessons in how hard that can be just to create a really, really simple experience.

So I think it you know, I think the advice for people in this room is to think through what those really core common use cases are and start from there.

KATE JENSEN: And since then, you’ve added a lot.

JEFF SHERLOCK: Yeah.

KATE JENSEN: Your financial services offering is very, very robust. Can you walk us through how you thought about what to add next and what you have added next?

JEFF SHERLOCK: Yeah, absolutely. So two different things. There are sort of two areas that we’ve added a lot of different payment solutions and fintech offers.

So one is we do provide the ability for service pros to collect in-person payments. This is not a huge piece of our business, but it helps us provide a more complete solution for those that need it.

I think it’s an important thing to understand is that payments for us at least, we’ve seen that it’s sort of hard to offer an 85% solution. You know, that decision to trust us with the payment flow for a business is sort of really, really important to those business owners. This is their livelihood. And so, you know, simple things like being able to offer in-person payments can often overcome some objections even if it isn’t a huge chunk of their revenue.

The second piece that we’ve seen a lot of success with is around instant payouts and Stripe Capital. And in essence, that’s all about providing the SP, the service pros, access to their revenue earlier.

We saw in the keynote, which I think is a great stat, 82% of all small I think SMBs face cash flow problems. We hear this all the time. So giving them access to their revenue earlier so that they can run their business, it’s been hugely, hugely successful.

KATE JENSEN: How do you think about what to add next?

JEFF SHERLOCK: That’s a good question. So when I think about what to add next, we really focus on how do we spend that flywheel even faster.

KATE JENSEN: Yeah.

JEFF SHERLOCK: So how do we get more money into the hands of our customers earlier and earlier from that moment of payment?

On top of that, we also think about how do we make it simpler and simpler to access payments or any of these other tools. So it’s all about kind of providing that simplicity and also increasing or sort of decreasing the time to access those funds.

KATE JENSEN: Love it. And then I’m going to pivot our conversation a little bit—

JEFF SHERLOCK: Okay.

KATE JENSEN: —and ask you about how you think about managing payments and what specifically you actually look at those KPIs.

For example, I hear all the time—I get asked, "What does a good attach rate for payments look like?" We see platforms ranging from, you know, really early days, no attach yet, all the way up to 90+ percent. How do you think about that internally, and what are some of the other KPIs that you measure?

JEFF SHERLOCK: Great question. So I think that we’ve been fortunate to focus on the home service industry, which has a ton of opportunity and has been very sort of economically stable for, you know, quite a long time and growing.

I think that one of the challenges is that we see that check and cash is still a very, very common payment method. So we see that -- when you think about attach rates, you really have to look at what’s the endemic habituated behavior that already exists.

If you go into any coffee shop or restaurant, I’m sure that the you know, the expectation is that you’re going to be able to pay with a credit card, and, you know, it’s probably 95% of the revenue is from card.

For us, it’s a little different. And so we look at all sorts of metrics around what is the addressable, you know, market. You know, if someone is doing, you know, home renovations that cost $50,000, you know, how much of that can we get onto a card? You know, it’s probably going to be smaller than transactions at the $500 mark. So we really try and segment a lot of the behavior we see to figure out what is that addressable market.

So when you think about attach rates, it’s really about how do we change a little bit of that behavior, make it a little bit easier, but also understand, you know, what are some of the natural ceilings that might exist.

KATE JENSEN: I love that. So you’re thinking about how to not only measure attach rate but also think about what they should be

JEFF SHERLOCK: Right.

KATE JENSEN: and then what sort of targets to set internally. What are some of the other targets that you are setting internally

JEFF SHERLOCK: Yeah.

KATE JENSEN: to make sure you’re doing well?

JEFF SHERLOCK: So three key metrics that we think about every day when it comes to payments in fintech. The first is what we call the enablement rate. So what percentage of our SPs have signed up for Jobber payments?

The second is the active rate. So of the ones that have enabled Jobber payments, on a monthly basis, how many of them have actually transacted using Jobber payments?

And then the third, which I think is the most interesting, personally, is GPV over GSV. And this metric is effectively what percentage of the invoiced volume that exists and flows through our SPs they send out, you know, lots of invoices what percentage of that is transacted via our payments product?

And this is a very, very I think interesting metric, and it requires a lot of segmentation to figure out the different strategies in terms of how to move it.

So I think that those three metrics are probably pretty universal to anyone running a similar type of business to ours in this audience.

KATE JENSEN: Love it. Which one do you think matters most, or do you measure all of them at the same time? And tell us a little bit about the different teams that are tied to those metrics. This is another question I get a lot. What teams are involved in this?

JEFF SHERLOCK: Yeah, good question. So the teams that are attached to these, if you think about the enablement rate and the active rate, those are going to look a little bit more like growth teams, because what they’re trying to do is really affect the behavior.

GPV over GSV is it really depends. If you’re trying to get someone that’s transacting half their volume to transact another the other half through you, you really have to understand what is how are they transacting the other half. Is it cash? Is it check? Is it is it some payment method you don’t even know about? So you really have to dig deep and really understand that.

And changing that behavior is going to look different than getting someone that’s only transacting 1% of their volume to transact, you know, 10%. So you really have to segment both the behavior, the volume the transaction sizes to understand and segment those things.

So when it comes to teams, I’d say that GPV over GSV is a much more distributed effort and the enablement rate and active rate much more focused and more sort of growth oriented.

KATE JENSEN: I love that. Thank you.

JEFF SHERLOCK: Yeah.

KATE JENSEN: As a side note, GPV, GSV

JEFF SHERLOCK: Oh, sorry. Yeah.

KATE JENSEN GMV, there are so many different ways to talk about it, it’s total payment volume that any of your customers see. But you alluded to, but really to bring that home, it’s so important.

JEFF SHERLOCK: Yeah, good call.

KATE JENSEN: You referenced this a little bit earlier, but could you talk a little bit more about how you think about payments monetization at Jobber?

JEFF SHERLOCK: Yeah. That is a that’s a great question. So when I think about payments monetization, I think about the fact that, you know, the magic for, you know, us is in that full integrated solution. And so for us we still are very focused on -- you know, we’re a SaaS business; right? So we still are very, very focused on increasing, you know, customer account and growing, you know, that core SaaS business, but payments is a significant and very meaningful chunk of our revenue, and so we think a lot about how that you know, how to grow that.

And one of the things that’s sort of a you know, you probably heard it this morning that echoes very true for us is that we really like the payments revenue because it’s so tightly aligned. We only get more payments revenue from our customers if they are more successful, and that is just a very powerful concept to align—the things that are going to help our customers grow are the same things that are going to help, you know, Jobber’s revenue grow. So we really think about how do we help our customers grow first and foremost. And as a benefit as a secondary benefit, you know, Jobber also grows.

KATE JENSEN: That rings very true for us here at Stripe as well. There are a lot of people in the audience who are probably about three years behind you in terms of how mature your payments business is.

JEFF SHERLOCK: Yeah.

KATE JENSEN: If you could go back in time and give yourself advice, what advice would you give?

JEFF SHERLOCK: Yeah, this is a good question. I have two things I would say. One is think very deeply about hiring. And one of the things that was I think a challenge in our early days and I kind of alluded to it is that we didn’t have any inhouse payments experts or expertise even, and that was that was a challenge. We didn’t really understand the economic, you know, flow of -- you know, all the complexity involved in running a true payments business. And so getting it off the ground and running it, a lot of sort of trial by fire. And so it really would have fast forwarded a lot of our learning just to have, you know, I think more inhouse expertise.

The second is I would say analytics and making sure your analytics infrastructure and function is up to snuff. I will share a little secret. When we were getting our payments business off the ground, all of our analytics were run off of one shared Google sheet called The Data Shed.

(Laughter)

JEFF SHERLOCK: So it was painful. I would definitely make sure that you have, you know, a really solid analytics foundation to build off of.

KATE JENSEN: The giggles say that a lot of us have a Data Shed somewhere internally.

And my final question for you. What comes next?

JEFF SHERLOCK: Yeah, this is a good question. I mean, I’ve sort of alluded to it a little bit, and I think that the keynote was also a great, you know, prelude to a lot of the things that we’re working on, but we’re really still very focused on how we just continually decrease that time to access funds. So how do we get more revenue, more different payment methods into the hands of, you know, our customers, their customers? How do we streamline that process to be as frictionless as possible?

The second thing I would say that we’re focused on is how do we embed more value into more spots within our existing workflows. So everything from, you know, how do we think about financing to capital, how can we embed that in more places, these are all things that we’re always actively working on, but when you think about the future, it’s just how do we scale that up. You know, there’s a ton of value that we can create for our customers by providing them more and more fintech solutions.

And maybe the last stat is that that I’ll share with you all is that -- you alluded to it before, but we see that the service pros that use our payments products retain at a far, far higher rate than ones that don’t. So the benefit is not just the economic benefit from, you know, a few basis points of transacted volume, but it’s also that our customers are more successful. They stick around on our platform. So we’re going to continue to find ways to embed fintech solutions in more and more places.

KATE JENSEN: That’s exciting to hear. Thank you for everything you’ve done with us so far. We’re so excited to see what comes next.

JEFF SHERLOCK: Yeah.

KATE JENSEN: And now I’ll bring it back to Aakash.

AAKASH SAHNEY: Thank you both so much. It’s awesome to see how Jobber thinks about payments and what’s next for their business. It’s just also such a huge upgrade using Jobber compared to the soggy checks under the doormat that I think Jeff mentioned.

All right. And now I want to discuss a trend I’m personally really, really excited about, and that’s the fact that platform payments opportunities are everywhere, often in really surprising places.

We mentioned this survey earlier that 75% of businesses say that they’re likely to embed payments or financial services into their products in 2023. And from the same survey, 48% said that they were already pursuing a marketplace revenue stream to enable the exchange of goods and services.

So what are some examples? Already software platforms are everywhere you look. They we just talked about Jobber and several others. There are also a ton of marketplaces that have to make payments and payouts super simple.

Take the on-demand economy, for example. You probably used Uber, Lyft, or Turo on this trip to San Francisco. And when you get home, there’s a good chance you’ll order some food from DoorDash or Instacart. I know I will.

More recently, we’ve seen an explosion in the creator economy as platforms like Substack, Spotify, and WordPress are helping creators to get paid. But it’s not just these native eCommerce and marketplace businesses. Increasingly, some of the world’s largest and most established companies are integrating payments and innovating at a really fast pace. These enterprises are entering new channels, going direct to consumer, launching their own marketplace offerings that all require them to rethink how buyers are making purchases.

Here are some of my favorite examples. BMW has a new direct-to-consumer franchise model. They’re improving the experience for consumers and for dealerships. They want to make it easy to preorder cars and pay for service online. To enable this, they use Stripe Connect to route funds from the car buyer to the dealership.

Consumers get a better experience with modern payment methods and checkout flows. Dealers get a simplified experience for online preorders and maintenance sales. And then BMW finance teams get faster streamlined access to important revenue insight. So it’s sort of like a win-win-win across all of the parties involved.

Another really cool example is H&M, a leading clothing and lifestyle retailer. They used Stripe Connect to launch a resale marketplace in 2021, where any consumer can buy or sell clothing and accessories.

And what’s really striking is that all of these examples are from, like, really diverse industries, you know, automotive, online shopping, on-demand delivery, apparel, but they all face a similar challenge when it comes to payments, and that’s facilitating money movement between multiple parties. So all of these companies use Stripe Connect to power these experiences for their users.

One example I think is particularly compelling is Microsoft. Microsoft the Microsoft Teams collaboration product offers video conferencing, voice calls, and messaging to more than 300 million businesses worldwide.
<br>Stripe is going to power Teams’ payments, allowing meeting hosts to accept realtime card payments for virtual appointments, for classes, events, and things like that. So let’s hear from Kate again as she chats with Brenna Robinson, the GM of Modern Work at Microsoft.

(Applause)

KATE JENSEN: Thank you, and hello again. This time I’m so happy to be here with Brenna. Brenna, can you introduce yourself a little bit?

BRENNA ROBINSON: Yeah, absolutely. So I’m the GM for Modern Work for SMB audiences at Microsoft. Modern Work is sort of all the products you know and love, Microsoft Word, Outlook, as well as Teams. And I focus on our SMB from VSB all the way up to mid-market audiences.

So you probably know Microsoft as this huge enterprise-focused company. Yes, we are. But we also see this huge opportunity in the bottom half of the market, where we know 99% of businesses are small or medium businesses, that 1% isn’t going to get us the growth we want. So I joined to take on this new role and invest in SMB.

KATE JENSEN: I love it. That’s so exciting. And congratulations. Most of us, when we think about Microsoft, especially especially the part of Microsoft that you’re working in

BRENNA ROBINSON: Yep.

KATE JENSEN: we’re thinking about that datamart spreadsheet that we’re talking about. Can you tell me a little bit more about how you’re thinking about bringing Microsoft to SMB and how you’re changing the perception?

BRENNA ROBINSON: Yeah, definitely. So I think there is perception. There’s product truth. And we want to work across all of it. The strength we have is this incredible base of products that you can really use for anything. I think we think of these tools like Teams as internal collaborate. You talk to your team on these calls. That’s not the way that they’re used often.

So a lot of what I’m focusing on is, hey, we know what SMBs want, which is to grow their business first and foremost, to reach their customers, and how do we use what we already have, which is really pretty good products that work really well, but just pivot them. So my job is kind of to take it and tweak it that’s both, you know, the messaging and how we talk about it, but also how can we do things like this partnership, where we’re saying, hey, how do you use our products not just for internal communications, but to reach your customers, make more money and grow your business, which we always know in every research I’ve ever done is the number one thing; right?

Personally, I’ve ran marketing at startups not too far from here in my career, and I can tell you, you know, when you’re a 50-person company, that customer is so critical to, frankly, paying your bills and keeping your team employed. So you wake up every day, you look at those revenue metrics like you’ve never looked at, but your company is not everyone is in that every single moment, but for the smaller companies, it’s their lifeblood, so we want to make sure we’re making our products so that they can fit their number one need, which is essentially to stay afloat and grow.

KATE JENSEN: I love that. And so how did you think specifically about building payments into the product suite that you have?

BRENNA ROBINSON: Yeah, definitely. So we talked about this before. We look at a bunch of different datasets. I think it’s a lit art and science, as most things are.

So from the science point we look at, you know, what products are being used in our base, who’s using them, how they’re using them. We are just able to announce, like, 300 million Teams users. The SMB amount is growing 30% year over year. That is much larger than any other audience. So we look at that and we go, okay, Teams is a place. People are there. They like it. They’re growing.

Then we ask our audiences, internal and external, say, hey, what do you want to do? Like what are your most important jobs to be done? What keeps you up at night? And then I kind of look internal, external, plus a little bit of art, what feels right, what feels like an interesting and exciting partnership. And here we said, hey, if people want to make money, let’s have them make it in our platform; right? Let’s not have them go somewhere else to get that revenue.

I always make this example about I think post-pandemic we thought that I think things would kind of go back to normal, but I don’t ever know I’m, like, meeting my accountant face-to-face again. Like I don’t think I’m coming in with this box of papers and sitting down. I think so many more things didn’t just go to video, but they’re staying in video, because, frankly, as a small business, you can get a lot more done if you’re just back-to-back on calls all day, whether it’s one to one, like, you know, I always think accountant, therapist, all those classic examples, or one to many, like the yoga class hasn’t gone away; right? People are still doing that.

I think those trends are sticking, which is why we wanted to make sure that you can actually make money inside the payments. Like send that email afterwards; right? They’ve got limited resources. Like they don’t have an admin that’s, like, wait, we didn’t pay that bill. So by the time they’re off the call, they’ve already got the cash, which I think Jeff was talking about, too, like that immediacy of getting those funds is really important.

KATE JENSEN: I love that. And as we all know, Alex Vogenthaler really loves yoga, as well, and so I’m sure he was on some of those.

Tell me a little bit more. So you decided that you’re a canonical Teams user. You’re a yoga instructor

BRENNA ROBINSON: Yeah.

KATE JENSEN: doing a live stream class on Teams. Wants to get paid immediately. Once you’ve decided that, once you’ve decided to embed payments, how did you think about partnering with Stripe? And we know that you have a lot of engineers at Microsoft.

BRENNA ROBINSON: Yeah.

KATE JENSEN: What made you decide to partner versus build?

BRENNA ROBINSON: Well, I think, like, any company, even someone as big as Microsoft, picking what you’re going to invest and do your resources in and what you’re going to partner on is incredibly important. Because we can conceivably build anything. Do we want to? Do I want to spend resources on something that already exists elsewhere that’s, frankly, really good? Probably not.

I mean, one of the exciting things for us here was we don’t even see the payment data. Like we have nothing to do with it; right? It’s transacted completely sort of out of our eyesight, which keeps us in a really clean area. We don’t have to worry about all these things that you have to worry about, so we’ll let you take care of that part. But it makes it something that’s a real opportunity. We know the customers want it, but here we’re going to, you know, try to build a whole payments platform ourselves? No, let’s just be good at what we’re good at and then find partners that are good at what their good at.

I think the other thing in partnerships, which is more the art you know, I was talking about the art is we want to partner with companies that have a strong reputation in the SMB space too. So tying our brand to a brand like Stripe that we know is everywhere for SMBs also gives us that reach, that brand awareness, that affinity; right? Microsoft loves SMBs, which we do. So I think it’s both you’ve got the product, and then we’ve got that kind of soft part of being tied to brands that have a lot of great reputation in the space.

KATE JENSEN: Well, we’re so excited to partner with you on this. And I know it’s really early days. So you talked about the art.

BRENNA ROBINSON: Yeah.

KATE JENSEN: Now let’s go to the science a little bit. If we’re sitting here a year from now and it’s gone exceptionally well, what are some things that would be true? What are you looking to measure?

BRENNA ROBINSON: Yeah. I mean, I think, you know, measurement is interesting. You can measure anything. We try to measure full funnel. So we really just entered into preview, so we’re seeing people pop in. I just want them to, like, add the plugin. I want them just to try it; right?

KATE JENSEN: Yeah.

BRENNA ROBINSON: And see is it working? How are people using it? Again, this is not out of our space, but it’s definitely a more interesting partnership for us. We’ve not really explored the payment space, like, inside of our products. There’s a lot for us to learn. I think first is just getting that awareness, people know it exists. A lot of people don’t even know we made it. So if they don’t know, they’re certainly not going to try it.

So definitely that top of the funnel, if you’re thinking full funnel, you want to be able to transact inside of it. We want to see if this is going to catch fire. I always say, like, my job is to plant for SMB -- I’m covering a whole audience -- a lot of little seeds and see what pops up; right? What really catches fire.

I like to think I know; otherwise, I hope I’m not making products that aren’t any good. But, listen, they aren’t always going to knock it out of the park, but what we want to do is see that fire start. And then I was joking, we got, like, a bunch of media coverage. I’m, like, well, maybe we’re doubling down on payments, then; right?

KATE JENSEN: Yeah.

BRENNA ROBINSON: I let the buyer tell me what works. And if people are excited and they’re using it, there’s a lot more that we could do here if we find out that people are really into the idea of doing it inside of our products.

And so in a year I’d like to know, like, is it working? Are we getting engagement? What did we miss? You always miss something. What are these use cases that we weren’t ready for that we wanted to add in? And then, ultimately, I think I’d also like it to help impact our reputation engagement overall in the SMB space and be a building block for the types of partnerships we want to do I think is incredibly important to us.

KATE JENSEN: Yeah.

BRENNA ROBINSON: This is something I’d like to continue to replicate in different areas and/or in payments if this lights up, which we hope it does.

KATE JENSEN: We also hope it does. And that’s a great place to end it. Thank you so much for being here today.

BRENNA ROBINSON: Thanks, Kate.

KATE JENSEN: We’ll bring Aakash back out to close us out.

(Applause)

AAKASH SAHNEY: Thank you, Kate and Brenna. It’s so great to see Microsoft solving these critical payments problems for small businesses.

For our final chapter today, I want to zero in on how platforms should think about evolving in the current environment. Like I mentioned earlier, the biggest challenge our customers are facing is that they feel stretched. The expectations of their customers keep rising, and the macroeconomic environment means that they need to be more focused than ever. So you can’t do it all, and you can’t do it all yourself.

On top of that, over the past few years, many boards and investors encouraged platforms to build everything from scratch, taking on a lot of the complexity of payments internally themselves, but they’re now realizing that this decision has some major pitfalls: higher fully loaded costs than they originally estimated, slower execution, and diverted attention from their teams.

For platforms who went that route, it ends up being really expensive to just keep the lights on. As a result, these days our conversations with users are really frequently about doing more with less. So next we’re going to discuss some of the top strategic opportunities that we see for platforms who are navigating this tension.

So even if you’re really experienced in this field and you’ve been doing this for years, it’s pretty normal to wonder, you know, what should we change about our business right now.

So let’s get started. The first opportunity we see is don’t reinvent the wheel. You can really minimize your total cost of ownership and increase your execution speed dramatically if you take advantage of out-of-the-box functionality.

One of my favorite examples of this is with onboarding. Think about Jobber onboarding a landscaper or Lyft onboarding a new driver. Building payments onboarding flows for your users can take a ton of engineering and design cycles to get right, and payments onboarding is pretty complex. It’s a workflow that needs to balance adhering to thousands of compliance requirements on one hand with providing a great user experience on the other.

We estimate that it takes at least five months to build the different compliance programs and UIs if you want to own this entirely in-house. And you have to add more to that each time you expand to a new country or each time a regulator introduces a new KYC rule.

Payments interfaces like dashboards and workflows are really similar. They look simple, but when you dig in, there’s a ton of complexity lurking under the surface, and that complexity can slow you down.

My favorite example of this is with disputes. Businesses have to handle credit card disputes all the time. It’s complex. There are dozens of different dispute reasons. There’s special evidence required for different disputes. And there’s nuanced differences between the card networks. Building this really well on your own is extremely hard and requires investing in a bunch of sort of esoteric payments expertise that distracts from your users’ unique problems.

A theme we’ve heard from many of you is that all of this complexity slows down your initial go-live times and creates a greater maintenance burden than you anticipated. So building this all yourself becomes, like, really costly.

To help with this and to make future updates to your onboarding and interfaces really lightweight and fast, we’re investing heavily in embedded components. These are prebuilt workflows and dashboards that can be integrated into your product and customized in minutes. This means that you can delegate almost all of that complexity of onboarding, building and maintaining payments dashboards to Stripe, and that’s all without sacrificing a fantastic tightly integrated user experience.

Here’s how they work. Step one, you use our configuration tool to style your payments list or other embedded component to match your product experience and your brand. Step two, you add about seven lines of code to your product wherever you want this UI to appear, and that’s it. There’s no step three. And it’s a lot less work than building all of this yourself. Okay. So don’t reinvent the wheel is the first sort of strategic opportunity we see.

The second opportunity is to offload operational burdens wherever possible so that you can focus your time on your users. We see a lot of platforms spending an outsized amount of their time on areas where their approach isn’t really unique or differentiated. For example, a big part of running a payments business relates to figuring out how you want to handle payments risk for your users on an ongoing basis. This means everything from, like, understanding your credit exposure through your users to fending off fraudulent merchants that sign up to keeping abreast of ongoing regulatory changes. This can get really complex.

To be blunt, we think too many platforms decide to take this on for themselves. This means they hire a team of risk analysts and compliance specialists, and they internalize all of this complexity into their own operations; or worse, they neglect this area entirely, and they get hit with unexpected losses that blow up their P&Ls and their roadmaps for several quarters.

This is expensive, and it’s also really distracting. You know, unless you think risk management is a core competency you want to invest in or you have uniquely low-risk customers, the more efficient answer for most cases is to lean on Stripe to help handle these challenges.

And regardless of what you choose, we’re here to help, whether you want to manage merchant, credit, and fraud risk yourself or get our assistance, we’re going to be providing better visibility into the status of all of your connected accounts.

We call it the "Accounts to review" page, and it’s right in your platform’s Dashboard. Your team can get a quick understanding of what’s going on with any account and take action as needed.

So, for example, if your support team gets a question from one of your users asking about why payouts were paused, they can simply log into the Stripe Dashboard, check out this UI, understand what information is pending for the account, and then give the customer clear steps to resolve the issue.

The overall point here is that now is a great time to evaluate your overall payments operation and make sure you’re not spending too much time on the areas that aren’t core to your business and your users.

The last opportunity we’ll talk about sounds really obvious, but we’re always shocked about how many platforms miss out on this, and that’s to just take the easy wins. One of the most obvious wins is with payment methods. You want to make sure that your users are surfacing the highest converting payments methods to their customers. Think about an SMB on your platform that sells really expensive furniture and then asking you to add Afterpay or Klarna to their checkout flow so that they can increase their order size. How quickly can you support them?

Or consider a professional services customer who’s taking on new clients in Europe and might need to get paid by European bank transfers. How quickly can you enable that?

Connect now lets platforms automatically turn on payment methods for their users, so you don’t have to integrate each of these payment methods each and every payment method separately one by one, and you also don’t need to enable it one by one for each of your accounts. You can do it all in one place at one time. So this becomes a really low-effort way to boost your revenue.

And in the keynote, we heard that businesses using our Optimized Checkout Suite saw a 10.5% average uplift. That’s real revenue for you and for your customers that you can add with very little effort.

Another really easy win is to offer instant payouts. 82% of SMBs and 90% of gig workers report difficulty accessing cash. In a few quick steps, you can make this so much easier for them and even monetize them for yourself.

Stripe offers new no-code and embeddable options to provide instant payouts to your customers, allowing them to access their funds in minutes rather than days. Platforms can also configure the fees that they want to charge for this service directly from the Dashboard.

The last easy win is that we find a lot of platforms sort of underinvest in thinking about pricing and running experiments related to pricing. Pricing can make a huge difference on the success of your payments business, and there can be these really, like, counterintuitive outcomes.

We’ve seen some users lower their payments prices and get more upgrades to their premium SaaS tiers. We’ve seen other users raise their payments prices with no impact on retention.

So it’s impossible to say exactly what will happen for your specific customers, but we highly recommend experimenting for yourself and trying it out.

Here, too, we’re introducing some new tools that make the implementation of any pricing strategy, whatever yours is, much, much easier. Once you’ve decided on a strategy or an experiment you want to run, you can now configure it directly from the Stripe Dashboard without writing any code. You simply go into the Dashboard, choose a price level, and it’s automatically applied to every transaction.

You can even set rich rules for more complex pricing strategies, applying different prices for different payment methods, different SaaS tiers, or different geographical regions.

I was sharing this with an analyst recently, and he was floored. He said, "Wait, you mean platforms don’t have to manage all of their pricing in an Excel spreadsheet anymore?" And so the answer is, like, no, not anymore.

Those are some of my favorite examples of some easy wins that can solve your business problems and your customers’ business problems with really very little effort.

Zooming out, as you navigate the challenge of balancing your customers’ expectations with macroeconomic uncertainty, we think it’s the right time to examine your payments business closely. We’ve talked about a few opportunities to do that. You know, don’t reinvent the wheel, focus on the differentiation in your business, and offload everything else, and take the easy wins.

And as you’ve seen, we’ve adapted our roadmap pretty significantly to make it easy for you to take advantage of these opportunities, and we really look forward to your feedback.

Okay. So to close this talk, I want to recap a couple of the high-level themes that we talked about. One, platform payments are bigger than ever, but doing platform payments right has a lot of nuance to it. We heard lessons from Jobber about how you can really nail it.

Two, embedded payments opportunities are everywhere you look. Companies like Microsoft are adding payments to make their user experience better, and you should be on the lookout for platform, marketplace, and franchise dynamics in your own businesses.

And, finally, we shared some guidance for how to navigate the macroeconomic uncertainty and the ever-rising customer expectations that we all face along with some concrete features that we’re shipping to help.

So we hope you learned something new today, and we’re so excited to see what you build next.

Special thanks to Jeff and Brenna for sharing their insights with us. Thank you so much.