What makes Checkout.com different from Stripe

While Checkout.com has kept a low profile for many years, the company raised $380 million within a year and reached an impressive valuation of $5.5 billion. It wants to build a one-stop shop for all things related to payments, such as accepting transactions, processing them and detecting fraud.

You might think that it sounds a bit like Stripe. In an interview at TechCrunch Disrupt, I asked founder and CEO Guillaume Pousaz what makes Checkout.com different from Stripe, Adyen and other companies in the payment space. It comes down to a very different philosophy when it comes to product and market approach.

“We only do enterprise. We really only work with the big merchants. There are a few exceptions here and there but it’s mostly enterprise-only and it’s purely online,” Pousaz said.

“I once met [Stripe CEO] Patrick Collison and I joked with him. I said you might have a million merchants, I have 1,200 merchants but I know every single one by name and they all process tens of millions every year. So I think it’s just a different business,” he added later in the interview.

Checkout.com now has a ton of money sitting in its bank account, but it has been a long and slow journey to reach that level. The company has been around for many years and reached profitability in 2012. It has been spending very meticulously over the years.

When talking about the early days of the company, Pousaz said the team grew really slowly. “We can hire one employee this month. Now we can hire two employees this month,” he said.

Today, the company still tries to remain as lean as possible. “It’s really a matter of discipline. All these companies, they raise a lot of money, they spend a lot of money and I don’t challenge that model. For us, embedding that discipline and frugality in the company in how we run it is something that was important to us,” Pousaz said.

“There’s no problem with spending. Just make sure that when you’re spending, you’re wise about it. You just don’t spray and pray. You see this unfortunately too much with tech companies.”

That’s why Checkout.com mostly invests in its own product. Nearly two-thirds of the company is working in product, IT and engineering. Only 13% of the company is working in sales, which is much less than some of its competitors.

But why did Checkout.com raise hundreds of millions of dollars then? “At some point, you need validation. And the validation was really important for us. When you have Insight, DST, Coatue, GIC, Blossom it changes your dimension,” Pousaz said.

When talking about regulators, Checkout.com has licenses in Brazil, the U.K. and France (for contingency), Hong Kong, Singapore, etc. It’s a never-ending process as the company is still working on licenses in other key markets, such as Japan.

“These regulators are super thorough. You don’t pass because you’re a nice guy, you pass because you have the right processes,” Pousaz said.

I challenged that notion and mentioned the Wirecard collapse. He obviously thinks that Wirecard and Checkout.com are in a different position right now.

“All my money is sitting with JP Morgan, it’s pretty simple. There’s no bank account in the Philippines and funny stuff,” Pousaz said. “The Wirecard story is so big that the real question is — go and ask the question to the auditors. Because the auditors that I have, which for the record is PwC, ask me to show them the bank statements and everything. And there are super thorough, it’s a super long process.”

“How did the Wirecard story happen? I don’t know,” he added.