Stripe is a Treasury Company
Treasury is the next Great Fintech Bundling or Unbundling
Treasury is the art of managing a company’s cash flow and working capital. Or looking at it versus the more mundane task of Accounting from the website of the Corporate Finance Institute (cfi.org):
Finance/Treasury: ‘Their job is to create value by managing capital in a way that earns higher than expected risk-adjusted returns.’
Accounting: ‘Accounting is the recording, maintaining, and reporting of a company’s financial records.’ ‘Accounting is the recording, maintaining, and reporting of a company’s financial records.’
In researching this segment I found out that Stripe is looking for a Treasury Person. Not surprising as lots of fast growing companies need treasury expertise, what surprised me about the LinkedIn ad was this:
“At its core, Stripe is a treasury company.”
Further the Treasury Manager LinkedIn ad for Stripe:
“We fulfill our mission of growing the online economy by empowering our users to move money to and from their own user constituents, and to understand and optimize these flows.”
“In this way, treasury is inextricably intertwined with our product; in order to continue to build novel and powerful products for our users, our own treasury capabilities must be excellent.
I really respect this attitude from Stripe, their users move money and expect it to be easy, what better way to ensure that than for their own systems to be world class.
For all of you Treasury nerds that have toiled away trying to get the best FX rate possible or spent late nights on Excel trying to get the best rate for your leases, this is great news. You are now at the forefront of Cool Kid Finance, congratulations.
It is also worth noting if you had any doubts about your Treasury career, COVID19 should put that to rest as nothing is more important during a crisis than cash management which means the Treasurer is now on the CEO’s speed dial.
Every consultant firm has written blogs, recorded podcasts and webinars about managing cash during a crisis.
So if Stripe is a Treasury Company, what are Kyriba, Bellin (now Coupa) and Trovata. These providers among many others actually bill themselves as Treasury Management Software (TMS). With modules like:
- Cash Visibility
- FX Risk Management
- ERP Integration
- Fraud Prevention
- Audit and Compliance
- Working Capital
- Bank Reconciliation
Let’s take a look at Stripe’s website and see if we have any modules or APIs that match these. I checked out Stripe’s list of APIs and could not find a Working Capital one or ERP Integration either.
Stripe’s website seems very geared as you would expect to e-commerce providers with stuff like:
- Authentication
- Connected Accounts
- Disputes
- Coupons
But does that mean that Stripe is NOT a Treasury Company?
Treasury is ultimately about moving money for corporates. Stripe does that and each feature they release it seems Stripe moves further up the Corporate value chain. They do a corporate card now. That is a corporate cash management tool.
So what gives?
I don’t think Stripe’s declaration means the TMS companies add any less value and I am sure there are no treasurers uninstalling a true TMS for Stripe as these systems add a ton of value for companies that manage millions or billions in cash.
Treasury is waking up to the need for APIs to quickly and easily connect the various systems required to give a Real Time and Accurate view on the current position of cash. There is no doubt that Stripe is probably moving a lot of money across borders and needs to manage the money movement and associated risk.
APIs are a great addition to any tech stack and that includes Treasury and Finance but they also don’t eliminate the need for the “core” system. So let’s say that the TMS providers are like bank core providers while they can always benefit from better integrations and that comes via APIs.
If you are in Treasury be open to the coming changes and new providers like Stripe. APIs are going to make things easier and faster. Remember most Treasury departments still operate on Excel spreadsheets, so if Stripe makes it easier, then we should all welcome them at the next AFP event, virtual this year, but in person next year.
It was not long ago that many corporate CFOs and Treasurers were dismissive of ever storing their cash projections and positions in the cloud and yet here we are, so let’s be open and ready for the next tech shift.
