Stripe Ink’s E-Commerce and Payments Deal with Ford – Tearsheet
Ford and Stripe have signed a five-year deal to modernize the automaker’s e-commerce and payments operations. Stripe will serve as the leading payment processor for Ford and its dealerships in North America and Europe.
Ford Motor Credit Company, the automaker’s financial services arm, will use Stripe’s technology to process digital payments in markets across North America and Europe, the companies announced earlier this week.
For those merchants currently offering digital payment services, Stripe is expected to help process e-commerce payments such as vehicle orders, reservations, and digital and charging services.
Ford also plans to use services like Stripe Connect, which facilitate payments and purchases between third-party buyers and sellers, to serve as an e-commerce backbone and direct customer payments to the right merchant.
The automaker expects to roll out Stripe’s technology in the second half of 2022, beginning in North America.
The partnership makes Ford one of Stripe’s largest customers, which includes Shopify and Salesforce. The fintech’s name has become synonymous with modern payment solutions, boasting one of the largest valuations in Silicon Valley at $95 billion.
Meanwhile, the technology upgrade is part of Ford+’s restructuring plan under CEO Jim Farley, who took over in October 2020. The company’s market cap surpassed $100 billion for the first time last week, fueled by the automaker’s plans to launch new electric vehicles here this year.
According to Marion Harris, CEO of Ford Motor Credit Company, the strategy is to leverage Stripe’s platform for simple payment experiences in any channel customers choose and achieve faster improvements to scale.
“As part of the Ford+ plan for growth and value creation, we are making strategic decisions about where to onboard vendors with solid expertise and where to build the differentiated, always-available experiences that our customers will value,” said Harris. “Stripe has developed a strong user experience expertise that will help provide our customers with simple, intuitive and secure payment processes.”
Embed payments in cars
The Ford Stripe partnership is designed not only to improve Ford’s online payment capabilities, but essentially to embed payments in cars, which is a growing trend.
Customer expectations for seamless digital payment experiences, reinforced by the pandemic, have taken over almost every market and the automotive industry is no exception. This has led to increased attention to in-car payments, which is expected to grow significantly over the next decade.
“During the pandemic, people have become accustomed to paying online for groceries, health care and even haircut advice from barbers at home. Now they expect to be able to buy anything and everything online. Ford is also enabling e-commerce and is scaling that strategy with the help of Stripe,” said Mike Clayville, Chief Revenue Officer at Stripe.
Most of the major payment solution providers, including MasterCard, Visa and PayPal, have partnered with automakers around the world to develop new in-car payment processes. Mastercard partnered with GM to develop in-vehicle payment solutions back in 2017, and Visa signed a deal with SiriusXM in 2019 to turn its vehicles into a transaction “hub.”
Meanwhile, many financial institutions have also entered the auto industry to facilitate this technological transition.
Just last September, JP Morgan became the majority owner of Volkswagen Payments when it bought three-quarters of the company, with plans to develop a “platform for new markets and industries outside of the auto sector, where mobility-centric payments will take center stage,” it said.
And in 2020, when Goldman Sachs and Barclays were looking to buy General Motors’ credit card portfolio from Capital One for $2.5 billion, it was reported that both banks floated the idea of turning cars into e-commerce portals – an idea the automaker embraced as the first major car company to allow drivers to order products and services through a car’s dashboard screens.
Goldman Sachs eventually won over its British competitor and announced last week that its consumer-focused company Marcus has partnered with GM to launch a new co-branded credit card and rewards program. This is the investment bank’s second major retail partnership following the issuance of the Apple Card in 2019.
Overall, the race to embed financial products in a car’s dashboard seems to be accelerating as banks and payment brokers each try to achieve some of this digital transformation.
This hype about new generations of cars – switching to electric, tablets on dashboards, voice control, e-commerce – will inevitably continue to generate such partnerships between car manufacturers, fintechs and banks that want to keep up with the competition and offer more convenience to their customers.