Ford inks 5-year deal with financial service Stripe to overhaul online payments
Ford Motor Co. and financial services startup Stripe Inc. on Monday announced a five-year agreement to overhaul the automaker's online payment process.
Under the agreement, Stripe — which is co-headquartered in San Francisco and Dublin, Ireland, and is one of the most valuable startups in the U.S. — would serve as the "premier payment service provider" for Ford and its dealers in North America and Europe. Ford cast the move as an attempt to improve the digital and e-commerce experience for its customers.
“We have been working with Ford to reimagine our e-commerce payment infrastructure," Marion Harris, CEO of Ford Motor Credit Co., the automaker's financial services arm, said in a statement. "Stripe’s platform will help us deliver simpler, outstanding payment experiences in any channel customers choose and scale improvements faster."
The agreement will see Stripe and Ford building out the automaker's online payments infrastructure, using tools such as Stripe Connect, which "lets businesses create a platform to facilitate purchases and payments between third-party buyers and sellers," according to a news release. In Ford's case, it plans to use the tool to facilitate payments between customers and dealers.
“We’re thrilled to be the payments engine under the hood powering the next stage of Ford’s digital transformation,” Mike Clayville, chief revenue officer at Stripe, said in a statement. “During the pandemic, people got comfortable paying online for groceries, health care, even home haircut advice from barbers. Now, they expect to be able to buy anything and everything online. Ford is making e-commerce possible, too, and scaling that strategy with Stripe’s help.”
Currently, Ford has online payment capabilities it developed in-house with another vendor, but outsourcing payment processing to Stripe will free up Ford Credit's resources to focus on other areas, Harris told The Detroit News on Monday. He pointed to the turnaround plan — dubbed Ford+ — Ford unveiled last year, under which executives said Ford would strategically partner with other companies to develop certain technological capabilities.
Under that plan, Ford looks to leverage electrification, its commercial vehicle business, and connected vehicle services to develop an "always-on" relationship with customers that sees them coming back to the automaker for recurring purchases such as subscription services.
The potential for how Stripe's platform might be used goes beyond "just accepting a payment," Harris said. For example, it might enable a commercial fleet manager to reimburse employees who take company-issued electric trucks and vans home to charge overnight: "As we build out Ford+ and think about the connected-vehicle environment, this is going to allow us to build some really neat use cases on behalf of our customers."
A key component of Ford's turnaround plan is commercial vehicles, for which the automaker last year launched a standalone business called Ford Pro. Executives have said they see strong demand among business owners for zero-emissions vehicles and accompanying services and products that enable them to reduce their costs and maximize the uptime and productivity of their fleets.
“As we build out Ford Pro across the company, enabling a suite of products and services for our commercial customers, payments will be an important element of that — and not necessarily from the customers to Ford, but also from these commercial customers to their customers and to their suppliers and vendors," said Harris.
Ford also said that as it develops e-commerce products and services, Stripe's platform "will be a key part of the tech stack." Ford executives have said the automaker will increasingly rely on a build-to-order model under which customers will go online to reserve and order vehicles through their local dealerships before taking delivery, a move accelerated by production challenges that have pushed dealers' inventories to record lows.
“At a really simple level, today when a customer places a reservation for a new vehicle on the Ford.com website, we take a deposit — that technology is going to be enabled by Stripe," said Harris. "As we build out e-commerce activities within the vehicle and outside of the vehicle, that’s where Stripe is going to help us differentiate and to make those payments seamless for our customers, in whatever use case they want.”
The automaker expects to roll out Stripe's technology in the second half of this year, starting in North America. The financial terms of the agreement were not disclosed.