Stripe has opened up its Instant Payouts feature to all marketplaces that use its Stripe Connect offering. The release of this service comes nearly a year after the payment processing platform debuted it in a beta program with Lyft. As a result of that partnership, Lyft reported that it had delivered more than $500 million through its “Express Pay” option and that half of all driver earnings are distributed this way.
Instant Payouts is exactly what it sounds like — when marketplaces have to pay sellers, funds will be delivered the same day, sometimes within 5 minutes. This is faster than traditional means, which on average could take 2 to 3 days to send money. Marketplaces are charged 1.5 percent commission on funds paid out, with a minimum fee of $0.50 per payout.
To start with, Stripe has worked with Instacart, Care.com, and goPanache to incorporate Instant Payouts into their marketplaces. Its release isn’t something that Stripe hopes will gain traction — it has already proven its potential, and having one of the largest ride-hailing services is a pretty solid use case.
Lachy Groom, Stripe’s lead for its card infrastructure team, shared that the Lyft pilot program taught the company “a million little lessons and tweaks we made.” An example revolved around error messages: “We worked closely with our banking and financial partners to make sure we understood every message such that our API could communicate it to marketplaces in a way that was useful and ultimately made sense to [Lyft] drivers,” he said.
It’s one thing to launch a product, but the financial industry is quite complex. Making sure that a product like Instant Payouts not only works but solves legitimate problems multiple companies have is important. Starting with Lyft could be a way to try to tackle all the potential use cases Stripe may need to deal with.
Groom revealed that his team is working on expanding Instant Payouts “beyond the U.S.” but didn’t provide a timeline for that. That being said, today’s announcement of Instant Payouts is still limited to marketplaces operating in the U.S. Those using Stripe Atlas that have U.S. entities are also able to use Instant Payouts.
Instant Payouts is available for those participating in Stripe Connect, which enables any business to accept credit and debit cards online. The service securely verifies the identity of new sellers and makes sure that they’re in compliance with local laws.
Updated at 10:29 a.m. Pacific on Monday: Corrected that Stripe Atlas customers will be able to use Instant Payouts if they are U.S. entities.