Stripe

Shopify

Stripe

Stripe charges a flat 2.9% + $0.30 per transaction. That's it.

No setup fees, no monthly fees, no hidden charges. The simplicity is the product.

When a customer pays on a website using Stripe, Stripe handles everything — fraud detection, currency conversion, bank transfers, tax calculation, compliance. The merchant just sees money arrive in their account.

On top of the core payments, Stripe has built an entire financial infrastructure stack. Billing for subscriptions, Connect for marketplace payments, Atlas for incorporating a company, Issuing for creating virtual cards, Treasury for banking-as-a-service, and Radar for fraud prevention.

They're basically building the financial plumbing for the entire internet.

Shopify

Shopify charges merchants a monthly subscription fee — $39/month for Basic, $105/month for Shopify, and $399/month for Advanced. Enterprise clients pay more through Shopify Plus.

On top of the subscription, Shopify takes a cut of every transaction processed through Shopify Payments (2.9% + $0.30, similar to Stripe). If merchants use a third-party payment provider, Shopify charges an additional 0.5-2% fee.

The genius of the model is stacking revenue. Subscription fees are the base layer.

Payment processing is the second layer. Then there's Shopify Capital (lending money to merchants), Shopify Shipping (discounted shipping labels), Shopify Email, the app store (Shopify takes 0% on the first $1M in app revenue, then 15%), and Shopify Balance (banking for merchants).

Every new service extracts more value from each merchant.

Stripe

Patrick Collison was 19. His brother John was 17.

They had already built and sold a company — Auctomatic, an eBay auction tool — for $5 million while still teenagers in Limerick, Ireland. Patrick went to MIT, John went to Harvard, and they both dropped out because they had a better idea.

The idea was embarrassingly obvious in hindsight. In 2010, accepting payments on the internet was a nightmare.

You had to get a merchant account, negotiate with a payment processor, deal with a gateway provider, handle PCI compliance, and write thousands of lines of code. It took weeks or months.

The Collisons thought it should take five minutes.

They built a simple API — seven lines of code — that let any developer start accepting credit card payments immediately. No merchant account.

No paperwork. No phone calls with banks.

Just paste seven lines of code and you're in business. They originally called it /dev/payments, then changed it to Stripe in 2011.

Peter Thiel and Elon Musk — the PayPal mafia — were among the first investors. Sequoia and Andreessen Horowitz piled in soon after.

The Collisons had built exactly what every developer on Earth had been wishing for.

Shopify

Tobias Lütke was a programmer from Koblenz, Germany who moved to Ottawa, Canada in 2002 because he fell in love with a Canadian woman. He wanted to sell snowboards online through a store called Snowdevil.

The problem was that every e-commerce platform in 2004 was absolute garbage. They were expensive, ugly, and painful to use.

Most required a computer science degree just to set up.

Lütke was a Ruby on Rails developer — one of the early ones, when Rails was still a brand-new framework. Instead of suffering through the existing tools, he just built his own e-commerce platform from scratch.

Snowdevil launched on the custom-built platform, and it worked beautifully. Other small business owners saw it and started asking if they could use the same software.

Lütke teamed up with Daniel Weinand and Scott Lake. In 2006, they launched Shopify as a product — a hosted e-commerce platform that let anyone set up an online store without knowing how to code.

The first year was slow. They had about 100 merchants.

But the product was so much better than everything else that word spread. By 2009, they had launched an API that let developers build apps and themes for Shopify stores, creating an ecosystem that would become one of their biggest advantages.

Stripe

Stripe grew almost entirely through developer love. They didn't hire a sales team for years.

They didn't run ads. They just built the best developer documentation anyone had ever seen and let word of mouth do the rest.

The developer-first strategy was deliberate. The Collisons realized that in a startup, the developer usually decides which payment provider to use.

If you make the developer happy, you win the company. Stripe's API documentation became legendary — clear, beautiful, with working code examples in every language.

They also grew by growing with their customers. Early Stripe customers included tiny startups that later became giants — Lyft, DoorDash, Instacart, Shopify.

As those companies scaled to billions in revenue, Stripe's processing volume scaled with them. Stripe didn't need to acquire new customers because its existing ones kept getting bigger.

The international expansion was methodical. Instead of launching everywhere at once like Uber, Stripe carefully added country after country, making sure each one worked perfectly with local payment methods, currencies, and regulations.

By 2024 they were processing payments in 195 countries.

Shopify

Shopify grew by being the anti-Amazon. Their pitch was simple: Amazon is a marketplace where you're one of millions of sellers with no brand identity.

Shopify lets you build your own brand, own your customer relationships, and control your destiny. "Arm the rebels" became their unofficial motto.

The app ecosystem was a multiplier. By letting third-party developers build apps, themes, and integrations, Shopify created a marketplace of 8,000+ apps that extended the platform's functionality infinitely.

Need email marketing? There's an app.

Need inventory management? There's an app.

This meant Shopify could stay focused on the core platform while the community built everything else.

The Shopify Partners program turned freelance developers and agencies into a sales force. Partners who built stores for clients earned recurring revenue from referrals.

Over 10,000 agencies worldwide now specialize in Shopify development. It's basically a franchise model for tech.

COVID was rocket fuel. When physical retail shut down in March 2020, every small business in the world suddenly needed an online store immediately.

Shopify's new store creation surged 71% in Q2 2020. The stock went from $400 to $1,700 in less than a year.

Stripe

Valuation whiplash. In 2021, Stripe hit a peak valuation of $95 billion during the fintech boom.

By 2023, they had to mark it down to $50 billion during the tech correction — a 47% drop that made headlines everywhere. Employees who had been paper millionaires suddenly weren't.

The valuation has since recovered to $91 billion after a secondary share sale in 2025, but those two years were rough for morale.

Competition is relentless. Adyen, the Dutch payments company, has been eating into Stripe's enterprise market.

Square (now Block) competes on the small business side. PayPal is everywhere.

New fintech players pop up constantly. The payments business has razor-thin margins and everyone is fighting for the same 2.9%.

Going public is the elephant in the room. Stripe has been expected to IPO for years.

Investors, employees, and the media keep asking when. The Collisons have consistently said they're in no rush, but with $8.7 billion raised and thousands of employees holding stock options, the pressure to provide liquidity is enormous.

As of 2025, they've opted for secondary sales instead of a public offering.

Shopify

The Amazon problem looms over everything. Amazon controls roughly 40% of US e-commerce.

Every Shopify merchant competes against Amazon, and many of them sell on both platforms. Amazon can always undercut on price, offer faster shipping, and has nearly unlimited resources.

Shopify's entire business depends on convincing merchants that owning their brand is worth more than Amazon's convenience.

The post-COVID hangover was brutal. After the pandemic boom, Shopify's stock dropped 80% from its November 2021 peak.

The company had hired aggressively during COVID, expecting the e-commerce shift to be permanent at pandemic levels. It wasn't.

In May 2023, Lütke laid off 20% of the company — about 2,300 people — and wrote a public letter admitting he had bet wrong on how much of the COVID shift would stick.

The fulfillment pivot was expensive. In 2019, Shopify announced the Shopify Fulfillment Network — their plan to build a warehouse and logistics network to rival Amazon.

They poured hundreds of millions into it. By 2023, they realized it was a money pit that distracted from their core business.

They sold the logistics operation to Flexport and wrote off the investment. Lütke called it "taking the medicine."

Stripe

Stripe Payments is the core — accept credit cards, debit cards, Apple Pay, Google Pay, and 135+ payment methods in 195 countries. Stripe Connect lets marketplaces and platforms pay out to sellers (Shopify, Lyft, DoorDash all use it).

Stripe Billing handles subscription and recurring billing. Stripe Atlas lets you incorporate a US company from anywhere in the world — fill out a form, get a Delaware C-corp, bank account, and tax ID in days.

Stripe Radar uses machine learning to block fraud in real time. Stripe Treasury lets platforms offer banking services to their customers.

Stripe Tax automatically calculates and collects sales tax in every jurisdiction.

Shopify

Shopify Online Store is the core — build and run an e-commerce website. Shopify POS (Point of Sale) handles in-person retail with card readers and inventory management.

Shopify Payments is the built-in payment processor powered by Stripe. Shop Pay is the accelerated checkout — it saves customer info so returning buyers can check out in one tap.

Shopify Capital provides cash advances and loans to merchants based on their sales data. Shopify Fulfillment Network was their attempt to compete with Amazon on shipping (they scaled it back in 2023).

Shopify Markets handles cross-border selling — currencies, duties, and translations. Shopify Audiences uses anonymized data to help merchants find new customers on ad platforms.

Stripe

Peter Thiel, Elon Musk, Sequoia Capital, Andreessen Horowitz, General Catalyst, Founders Fund, Tiger Global, GV (Google Ventures), Goldman Sachs, Baillie Gifford

Shopify

Bessemer Venture Partners, FirstMark Capital, Felicis Ventures, Georgian Partners, OMERS Ventures