While mobile payments are getting a lot of buzz lately, especially with the recent launch of Apple Pay, there’s still a long way to go in terms of adoption and technology.
Speaking today at Code/Mobile, Stripe CEO Patrick Collison shared his thoughts on the landscape, noting there’s a lot of misunderstanding about online payments.
“People think that this a mature market, and that online payments have already happened. But consumer spending on the Internet only represents two percent of all spending,” said Collison. “There’s an enormous amount of expansion possible.”
He added that it has only been recently that Internet has become a global phenomenon because of things like cellphones, and one of the problems the company is trying to solve is the problem of enabling online payments for businesses in any country, and enabling buyers in these countries to make purchases.
But the more pressing issue is security. Collison said that the recent security breaches like those at Target are a consequence of using a credit card security model that was designed decades ago. “It’s insanely insecure,” he said.
The challenge for the industry will be how quickly it can migrate away from that model. But it’s not so much a technical problem as it is a business one. Collison said this will be a bigger issue for financial institutions that are stuck in a geological strata of legacy systems. For startups like Stripe, the job is easier because their systems are only a couple of years old.
Launched in 2011, Stripe provides simple tools that allow developers to integrate mobile and online payments into their apps and services. The company’s tech is used by Lyft, Instacart, Apple Pay and Chinese payments service Alipay. Facebook and Twitter have also signed on as partners.
But unlike some of the other mobile payment players, Stripe doesn’t have a consumer-facing product. When Swisher asked if that makes Stripe a commoditized business or a target of acquisition, Collison dismissed the idea.
“The view of payments as a commoditized business comes from shortsightedness and a lack of imagination,” said Collison. “Again, it goes back to the idea that this a mature market.”
This article originally appeared on Recode.net.