Stripe launches charge card program to help SMBs

By Delisha Fernandes

Stripe, a financial infrastructure platform for businesses, announced a new charge card program for its commercial card-issuing product to allow FinTechs  to create and distribute virtual or physical charge cards that allow customers to spend on credit rather than the funds in their accounts.

“Whether a small business is just starting or looking to expand, access to capital can make all the difference. Our new charge card allows FinTechs and SaaS platforms to provide access to a reliable source of credit for the many small businesses they work with,” said Denise Ho, head of product for BaaS at Stripe.

Since Issuing launched in 2018, platforms and FinTechs have used it to create more than 100 million cards in the US, the UK, and the EU.

But until now, Stripe-issued cards could only be used to spend money from a prefunded account. The expansion into charge cards allows platforms to offer these same users access to credit. Cardholders can spend up to their credit limit and pay back the outstanding balance each month’s end.

“Building a charge card program is a daunting task. Stripe provided immense value in planning and launching our program quickly, with a compliance-first design that we are confident can scale to meet Ramp’s needs,” said Michael Cohen, vice president of partnerships at Ramp.

Businesses can set individual credit limits and repayment schedules, including flexible weekly, monthly, or set-day repayment options. When businesses need to collect repayments from customers, they can use Stripe’s suite of products, including no-code and embeddable options like Invoicing and Checkout.

The charge card program also provides flexible funding options for platforms. Once a card is used to purchase, the transaction must be funded. Most charge card programs require the platform offering the card to cover the transaction immediately, which forces platforms to maintain large cash balances.