APIs All the Way Down

Stripe Treasury is “a banking-as-a-service API that lets you embed financial services in your marketplace or platform.” Simply, by writing a few lines of code, platforms can let their customers set up bank accounts at partner banks like Goldman Sachs and Evolve Bank & Trust.

API-first companies are a subset of Software-as-a-Service (SaaS) companies, with a few key distinguishing features:

Strong API-first businesses sit in this sweet spot: they provide mission critical but non-core functionality to their customers, like accepting payments, providing cloud security, or sending communications to customers.

Purchasing Decision. Traditional SaaS is a department-head, IT, or exec purchasing decision, while API-first is typically a product and engineering purchasing decision.

In the press release, Stripe highlighted its partnership with Shopify, which is using Treasury to build Shopify Balance.

Focus. API-first companies focus on solving a very specific problem. Stripe started with payments, and put all of their efforts into building the best payments solution. Twilio started with messaging and calling. Plaid does bank data, Algolia does search, Shippo does shipping, Checkr does background checks. That focus means that everything the comp... See more

Applications are just a bunch of functions that get things done: APIs wrap those functions in easy to use interfaces so you can work with them without being an expert.

Shopify is a really smart company. It wouldn’t tie its own hands for no good reason. Instead, it made a deliberate, strategic choice to focus on the things that it does best, and to plug in Stripe for all of the things that it does best. That’s what third-party APIs enable their customers to do.

They allow customers to focus on the one or two things that differentiate their businesses, while plugging in best-in-class solutions everywhere else.