Unbundling Stripe: How Payments Startups Empower Merchants to Rebuild Their Stacks

A World Beyond Stripe

In payments, the path to innovation often starts with asking the right questions.

Last time, we explored how uncovering problems that truly matter can lead to impactful solutions. Then, we discussed a methodology for identifying the trends that shape tomorrow’s payments landscape. Both were about laying the foundation for what’s next.

This week, we shift gears.

The idea that you have to come up with a brand-new, unique solution to a problem isn’t always true. This is especially true in payments, where merchants aren’t necessarily looking for the next new thing but rather the next best thing.

The company that has been the inspiration for a lot of these startups is Stripe, leading to the unbundling of payments.

As payments startups unbundle Stripe’s once all-encompassing offering, merchants are seizing the opportunity to rebuild their stacks on their own terms.

What started as a solution to simplify has now become a new market of tailored alternatives.

For those who have been in Payments and Banking for a long time, this is quite reminiscent of the image that went viral in 2015 of fintech startups picking apart Wells Fargo's services.

However, this time, it is Stripe, which is the inspiration for many payments startups.

Let me explain how this unbundling is reshaping the way payments companies deliver value and why merchants are loving it.

Why Unbundling Stripe Matters

Stripe transformed the payments industry by simplifying complexity.

Its all-in-one solution allowed merchants to accept payments, manage subscriptions, and handle financial reporting without juggling multiple providers. But this dominance came with a trade-off: a one-size-fits-all stack that limited flexibility and forced merchants into Stripe’s ecosystem. For many, this convenience now feels like a constraint.

Merchants today are asking for more.

They want transparency in costs, specialized tools that align with their unique needs, and the freedom to choose services that fit their business—not the other way around.

And payments startups are answering the call.

By unbundling Stripe’s offering, new startups are focusing on solving niche problems with precision, whether they involve fraud prevention, tax automation, or data reconciliation.

This shift is empowering merchants to take back control, allowing them to build payment stacks that are not only functional but also optimized for their growth and strategy.

Breaking Down Stripe's Core Offerings

Stripe’s strength lies in its breadth.

It has built an ecosystem that spans the entire payments lifecycle, bundling tools that merchants rely on to operate efficiently. However, each of these tools represents not just a feature but a market opportunity, a chance for specialized startups to offer a deeper, more tailored alternative.

Take what Stripe calls Global Payments, for instance.

Stripe’s offerings like Payments, Payment Links, Checkout, and Elements provide solutions for accepting transactions globally.

Yet startups are carving out niches, focusing on specific geographies, or offering hyper-personalized checkout experiences.

Similarly, in Embedded Payments and Finance, features like Connect and Issuing are now being reimagined by startups enabling platform-specific payouts or offering advanced virtual card capabilities.

The unbundling trend continues with Revenue & Finance Automation.

Stripe’s tools like Billing, Revenue Recognition, Tax, Invoicing, and Sigma provide robust options, but startups are diving deeper, addressing industry-specific compliance, automating complex tax scenarios, or providing advanced data reporting.

Finally, Other Tools like Radar (fraud prevention), Authorization (optimization), Terminal (in-person payments), and Atlas (company incorporation) are prime targets for startups building bespoke solutions to address these needs at scale.

Every feature Stripe offers inspires specialization, allowing startups to unbundle and create tools that excel at serving merchants’ unique challenges. This shift is driving the next wave of innovation in payments infrastructure.

Examples of Startups Unbundling Stripe

Stripe’s Radar offers a robust fraud prevention tool, but startups like Sardine, and Forter have gone deeper, building specialized fraud detection systems tailored to specific industries and merchant needs.

Sardine leverages advanced machine learning to detect anomalies in real-time, particularly for fintech platforms, while Forter focuses on trust-based decisioning, enabling merchants to reduce false positives and maximize conversions. These companies target nuanced pain points that Stripe’s broader solution can’t fully address.

In Tax Automation, Stripe’s tax features are convenient but limited in scope.

Startups like Avalara and TaxJar specialize in handling complex tax scenarios, such as cross-border VAT compliance or intricate regional tax codes.

Their tools integrate seamlessly into merchant workflows, reducing administrative burdens and minimizing costly errors, areas where Stripe’s offering falls short.

For Payment Reconciliation, Stripe’s Sigma offers a baseline for reporting and analytics, but innovators like DataPipeline and Autorek provide next-level solutions.

They cater to merchants managing high transaction volumes, offering granular insights, automated workflows, and compliance-grade reconciliation processes. These tools don’t just provide data, and they solve operational challenges by aligning payment flows with financial reporting standards.

By zooming in on merchant-specific pain points, these startups provide solutions that are not only more comprehensive but also better aligned with the complexities merchants face, giving them a competitive edge in the unbundling landscape.

How Merchants Are Rebundling Their Stacks

You might not be aware of it, but a quiet revolution is happening in the payments industry: merchants are no longer relying on one provider to solve all their needs.

Instead, they’re unbundling their reliance on single providers and rebundling their payment stacks, leveraging specialized startups to build infrastructure tailored to their exact requirements.

This shift isn’t just about choice, it’s about merchants taking control of their operations in ways that were previously unimaginable.

By combining unbundled services, merchants unlock cost efficiency, better data control, and optimized performance.

For instance, a merchant might integrate Forter for cutting-edge fraud prevention, layer on Airwallex for seamless cross-border payments, and use Proper for detailed payment reconciliation.

The result?

A highly customized stack that not only saves money but also aligns perfectly with their operational goals.

This flexibility is empowering merchants to stay competitive in a fast-moving industry.

Instead of settling for generic solutions, they can adapt their stacks to handle region-specific regulations, scale with new business models, or dive deep into analytics to drive performance improvements.

The era of "one-size-fits-all" is fading, giving way to bespoke solutions that help merchants thrive in an increasingly complex payments ecosystem.

This rebundling trend signals to payments companies that merchants are redefining the rules, and the winners will be those who embrace specialization and adaptability.

What Payments Companies Can Learn

The unbundling of Stripe isn’t just a wake-up call for startups. It’s a roadmap for every payments company, from early-stage disruptors to established enterprises.

The key lesson?

Merchants are demanding flexibility, and the companies that thrive will be those that meet them where they are, not where the company wants them to be.

Specialize. Whether you’re a startup carving out a niche or a scale-up looking to sharpen your edge, the takeaway is clear: depth beats breadth.

Focus on solving one problem exceptionally well, whether it’s fraud prevention, tax automation, or payments orchestration. Specialization builds trust, drives adoption, and positions your solution as indispensable.

Empower Merchants. The days of locked ecosystems are numbered.

Merchants want control over their stacks, and that means offering tools that are modular, API-first, and easy to integrate. Enterprises can take a page from startups by designing solutions that complement rather than compete, becoming essential pieces in merchants’ tailored infrastructures.

Stay Agile. Even Stripe, the gold standard in payments, is facing unbundling.

No solution is future-proof, but adaptability can be your greatest strength. Constantly evaluate your product suite, what can be improved, and what could be targeted by competitors.

Treat unbundling as an opportunity to evolve, staying ahead of the curve by innovating before disruption hits.

Whether you’re scaling globally or doubling down on your local market, the unbundling trend is a reminder that flexibility, focus, and foresight are the cornerstones of a resilient payments strategy.

Those who embrace this shift won’t just survive. They’ll lead.

Thank You for Reading. Feel free to Like, Comment, Share, or Post on Your Socials. I appreciate all the feedback I can get.

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P.S. If you want to work with me in a larger capacity, either speaking, advisory, or consulting, feel free to email or DM me.