Stripe, the startup that lets websites and mobile apps implement payment services through its API and a few lines of code, is today adding in another new feature as it continues to build out its platform with more tools. It is now going to help prevent fraud on Stripe transactions, through a new service called Radar.
Radar is being rolled out globally as part of Stripe’s primary payments service, meaning companies that use Stripe’s API for payments do not need to pay extra or do anything in particular to turn it on.
That may change down the line if and when Stripe — which has now raised around $300 million and is valued at around $5 billion — begins to add in more features and decides to monetise the service separately. (Its current, basic payments rate is a 2.9% commission plus 30 cents per successful card charge in the U.S. and fees vary in other markets.)
“This is an area of active development and there is a long list of things we want to do,” said John Collison, Stripe’s co-founder and president, in an interview. “We haven’t ruled out [launching it as a separate service] but want to see how people use it and what works and what doesn’t first.”
There are already areas where I could see Stripe potentially adding in more features beyond fraud detection and prevention. For example, for now Stripe is not offering any kind of insurance or protection services alongside the fraud prevention, although Collison told me that this is one area it has considered.
In Radar, Stripe is tackling a very big issue in the world of online commerce. Retail e-commerce alone (which doesn’t include other kinds of transactions that might run through Stripe’s system) will be worth nearly $2 trillion globally this year, according to estimates from eMarketer, and over the next two years it will continue to grow at a rate above 20 percent and take an ever-bigger proportion of all commerce (including offline) transactions.
But as online commerce continues to grow, so do incidents of e-commerce fraud. A survey conducted by Pymts and Forter found that in Q4 of 2015 there were 27 fraud attempts for every 1,000 transactions, and in Q1 2016, some $4.79 out of every $100 in transactions was at risk (a year before it was $2.90).
Collison would not say how much fraud may have passed through Stripe’s own pipes over the years, but pointed to the fact that there is a lot across all of e-commerce.
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