As an online marketplace to exhibit and sell artwork from artists and galleries around the world, artcloud facilitates payments for hundreds of clients.
Previously, artcloud did this through “independent sales organizations” — third parties that set up credit card processing for sellers bigger than those using a service like Square but still too small to set up a merchant account directly with a bank. And while most such companies handled payment processing efficiently, the same could not be said for their new client on-boarding processes.
“Each time we added a new client, it was like starting all over again,” artcloud CEO Alex West says. “The ISOs required so much information about each client that it took days or even weeks. Having to go through so many processes to add new clients was inhibiting our growth.”
“Stripe brought all the clients into one spot. When we want to add another artist or gallery, they simply add a link and it takes about 60 to 90 seconds, so that we can start processing payments right away.”
— Alex West, artcloud
Processors demanded a lot of information about each client, including average ticket size, a security code, who they did business with and other information — basically setting up separate accounts for each artist or gallery rather than operating one master account for artcloud. Because artcloud was adding as many as five new clients a day, getting all its clients online for payments was a major undertaking.
Then about two years ago, artcloud started to work with San Francisco-based Stripe.
“Stripe brought all the clients into one spot,” West says. “When we want to add another artist or gallery, they simply add a link and it takes about 60 to 90 seconds, so that we can start processing payments right away.”
Artcloud represents about 2,500 art galleries and more than 3,500 artists. Most use the platform only to display their works, but about 500 galleries and 200 artists use artcloud for both sales and payment. In addition to U.S. clients and customers, artcloud sells internationally, particularly in Europe, Brazil and New Zealand.
Artcloud, which has been in business about four years, sells about $3 million worth of art per month and is growing quickly, adding more than 100 new galleries and artists each month.
Setting up with Stripe was easy, West says. The original installation took about a day and artcloud did not have to purchase any additional hardware or software. New clients can now be added in minutes, and customers can pay with all major credit and debit cards.
Artcloud pays Stripe 2.9 percent of the cost of a purchase plus a fixed fee of 30 cents per transaction. That is slightly above the average 2 percent typically charged by banks for credit card transactions, but West says it is comparable to what artcloud had been paying other processors in the past. There are no setup or monthly fees.
‘A trusted name’
Artcloud chose Stripe after asking other online and traditional retailers for suggestions.
“We found out that Stripe was a trusted name and had a good reputation for security. They handle all our [security]requirements, so we needed someone with a good security reputation,” West says.
Using the Stripe name helps artcloud gain the trust of artists and galleries when trying to promote itself to handle their work. “People know the Stripe name. That helps significantly when we’re trying to take on new clients. They know that we’ll provide the security they need to sell their work,” West says.
Stripe works with businesses — including retailers of all sizes — in 25 countries to accept payments in 135 currencies, and provides payment services both online and on mobile devices. Using a proprietary technology platform, Stripe can get new businesses up and running with payments in under 10 minutes, says Richard Alfonsi, Stripe head of global revenue and growth.
Lauri Giesen is a Libertyville, Ill.-based business writer with extensive experience in covering payment and finance issues.