The Unbundling of Stripe

Stripe won. They became the default payments layer for the internet. Seven lines of code to accept payments. A single integration for cards, ACH, international methods, subscriptions, invoicing, and more.

But Stripe's dominance is creating the conditions for its own unbundling. The same pattern that unbundled Craigslist, unbundled Microsoft Office, and unbundled the traditional bank is now happening to Stripe.

The Bundling Thesis

Stripe's genius was bundling. Before Stripe, accepting payments meant integrating with a payment gateway, a merchant account provider, a fraud detection service, and a reporting system. Each integration was painful. Each vendor had different APIs, different contracts, different support.

Stripe bundled all of this into one API. One integration. One contract. One dashboard. The simplicity was revolutionary. Developers could add payments in an afternoon instead of a quarter.

This bundling created massive value. Stripe is worth $50B+ because they captured the complexity tax that every internet business was paying. They made payments a solved problem.

Why Bundles Unbundle

Bundles work when customers value convenience over optimization. Early-stage startups don't care about payment processing fees. They care about shipping product. Stripe's 2.9% + $0.30 is a rounding error when you're doing $10K/month in transactions.

But as companies scale, the calculus changes. At $10M in annual transactions, Stripe's fees are $300K+. At $100M, they're $3M+. Suddenly, optimization matters. Suddenly, the bundle feels expensive.

More importantly, scaled companies have specialized needs that horizontal platforms can't prioritize. A healthcare company needs HIPAA-compliant payment flows. A construction company needs progress billing and lien waivers. A cannabis company needs banking relationships that Stripe won't touch.

The Unbundling Vectors

Four vectors are driving Stripe's unbundling: vertical specialization, embedded finance, international expansion, and alternative rails.

1. Vertical Payments

The biggest unbundling opportunity is vertical specialization. Industries with complex payment needs are building their own infrastructure.

These companies aren't competing with Stripe on API simplicity. They're competing on domain expertise. They understand the workflows, compliance requirements, and edge cases that Stripe can't prioritize.

A healthcare payment company knows that a patient payment flow needs to check insurance eligibility, apply copays correctly, handle HSA/FSA cards, and integrate with practice management software. Stripe could build this, but it's not their priority. They have millions of customers; healthcare is one vertical.

2. Embedded Finance

Stripe Treasury lets platforms offer banking services. But specialized embedded finance players are going deeper.

These companies offer capabilities that Stripe Treasury doesn't: full banking ledgers, custom card programs, complex money movement, and direct bank partnerships. They're building the infrastructure for platforms that want to become banks, not just accept payments.

The embedded finance opportunity is larger than payments. A platform that can hold customer funds, issue cards, and provide lending captures more value than one that just processes transactions. Stripe knows this (hence Treasury), but specialized players are moving faster.

3. International Rails

Stripe works globally, but it's optimized for U.S. and European markets. Emerging markets have different payment methods, different regulations, and different customer expectations.

In Brazil, Pix (instant payments) processes more transactions than cards. In India, UPI dominates. In Africa, mobile money is essential. Stripe supports these methods, but regional players have deeper integrations, better success rates, and local expertise.

A company expanding into Latin America might use Stripe for their U.S. business and dLocal for LatAm. The regional player offers better conversion rates, local acquiring (lower fees), and support for payment methods that Stripe treats as secondary.

4. Alternative Rails

The most disruptive unbundling vector is alternative payment rails that bypass card networks entirely.

Stripe's business model depends on card network fees. They make money on the spread between what they charge merchants and what they pay Visa/Mastercard. Alternative rails threaten this model.

A B2B payment over stablecoins costs a fraction of a card transaction. An account-to-account payment via open banking bypasses interchange entirely. As these rails mature, they'll capture transactions that currently flow through Stripe.

What This Means for Founders

The unbundling of Stripe creates opportunities for infrastructure founders. But not every opportunity is equal.

Where to Build

The best opportunities are in verticals where:

Where Not to Build

Avoid opportunities where:

The Stripe Response

Stripe isn't standing still. They're expanding into adjacent areas (Treasury, Issuing, Capital, Tax, Identity) to capture more of the financial stack. They're acquiring vertical players. They're building partnerships.

But Stripe's strength is also their constraint. They have to serve millions of customers. They can't go deep in any single vertical without neglecting others. They can't move fast on alternative rails without cannibalizing their card business.

This is the innovator's dilemma playing out in real-time. Stripe's best customers (large enterprises with complex needs) are the ones most likely to unbundle. Stripe's core business (simple payments for startups) is the least profitable segment.

The Investment Thesis

We're actively looking at companies in the Stripe unbundling thesis. The pattern we look for:

The best unbundling plays don't compete with Stripe directly. They make Stripe irrelevant for their customers. A healthcare payment company that owns the patient financial experience doesn't need Stripe. A B2B payment platform that moves money via ACH and stablecoins doesn't need card rails.

The Timeline

Unbundling happens slowly, then quickly. The vertical payment players have been building for years. The embedded finance infrastructure is maturing. Alternative rails are gaining adoption.

We expect the next 5 years to see significant market share shift from Stripe to specialized players. Not because Stripe gets worse, but because the market gets more sophisticated. Customers who started on Stripe will graduate to vertical solutions. New customers in complex industries will skip Stripe entirely.

Stripe will remain dominant in their core market (simple payments for internet businesses). But the edges of their empire are vulnerable. That's where the opportunities are.

If you're building in the payments infrastructure space, we want to talk. We understand the complexity, the regulatory landscape, and the competitive dynamics. We've been watching this unbundling unfold, and we're ready to back the companies that will define the next layer.