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Ford credit segment will use Stripe’s technology to process digital payments in markets across North America and Europe.
Ford Motor Company (NYSE: F) stock was trading at around $25.19, up approximately 0.7%, on Monday, January 17. The American multinational automobile manufacturer is preparing to scale its operations through strategic partnerships. In a bid to bolster its electric vehicle market entry, the Ford company has signed a five-year contract with Stripe.
According to the automaker, the Ford credit segment will use Stripe’s technology to process digital payments in markets across North America and Europe. Additionally, the online payment start-up will process customers’ vehicle orders for both retail and commercial customers.
Apparently, Ford anticipates using Stripe to route a customer’s payment from its website to the correct local Ford or Lincoln dealer.
The partnership is strategic for both entities as they are poised to benefit from each other’s expertise. Moreover, Stripe is valued at approximately $95 billion with millions of companies including Instacart, Salesforce, Amazon, Slack, Shopify, Google, Lyft, Zoom, and many others.
“We are making strategic decisions about where to bring in providers with robust expertise and where to build the differentiated, always-on experiences our customers will value,” Marion Harris, CEO of Ford Motor Credit Company, said in a statement.
Online payments have been significantly entrenched during the past two years, fueled by the Covid-19 crisis. Consequently, most businesses are either moving to entirely online payments or have already migrated.
“During the pandemic, people got comfortable paying online for groceries, health care, even home haircut advice from barbers,” said Mike Clayville, Stripe’s chief revenue officer. “Now, they expect to be able to buy anything and everything online.”
Ford and Stripe Five-Year Deal
Ford had a successful year in 2021 following a two-decade bear market. With the company’s stock market headed to the all-time high recorded at the beginning of the 21st century, the partnership with Stripe could not have come at a better time. Moreover, there is growing competition in the electric vehicle industry and also in the digital payment market.
Notably, Ford’s market cap topped $100 billion last week for the first time as the company introduces electric models of its long-standing vehicles including the F150 pickup.
Following a successful year, Ford’s board of directors recently declared a first-quarter regular dividend of 10 cents per share on the company’s outstanding common and Class B stock. Whereby the dividend is payable on March 1 to shareholders of record at the close of business on January 31, 2022.
Stripe on the other hand remains a highly valued private company with no near prospects of going public. Furthermore, the company’s management has publicly confirmed the firm is ‘very happy’ staying private.