We recently looked at two online payment companies coming out of Ireland and now it appears that one, Stripe, is on the verge of inking a multi-million deal with social networking platform Twitter Inc (NYSE:TWTR).

Limerick brothers Stripe twitter

Formed by two brothers from Limerick, John and Patrick Collison, Stripe employs some 60 people, mostly in San Francisco, and recently opened an office in London. Sources say they are in advanced discussions with Twitter Inc (NYSE:TWTR) to allow users to make purchases via credit card on the social platform.

Stripe’s system works by providing merchants with a computer code that that can be integrated into a website or mobile app, allowing credit card payments. Stripe earns a flat commission of 30c per transaction, plus 2.9% of the total payment.

Looking like a good investment

There’s already a lot of confidence in the firm. And, rightly so! Patrick Collison said that payment volume has doubled since September, as he announced the acquisition of $80 million this week in new funding from venture capital investors Khosla Ventures, Sequoia Capital and Founders Fund. The cash is earmarked for further expansion. Although Stripe is already in 12 countries, it still has some way to go to catch up with PayPal, which is in 190 countries worldwide.

Keith Rabois of Khoslan Ventures and former PayPal executive says that Stripe has an advantage:

“PayPal has a lot of legacy technologies cobbled together, whereas Stripe has reinvented everything they are doing from scratch. Stripe has created a brand where all new developers start with the premise that Stripe is the right answer. If you were a developer today and you thought about using a different option, your engineers would think you’re insane.”

Ridesharing company, Lyft, partnered with Stripe last year. Co-founder, Logan Green, said they had saved considerably:

“Stripe removed the need for us to hire additional internal staff to process payouts to Lyft drivers.”

A growing market

A 2012 round of funding valued the company at $100 million. However, following the new funding, analysts are now setting a valuation around $1.75 billion. Nevertheless, Patrick Collison said that they had no intention to cash in on the company’s valuation just yet:

“If we were interested in selling the company and making money quickly, we would have a laser focus on the US,” he said. “Instead, we’re absolutely focused on opening international offices and expanding, which is very hard.

Forrester Research estimates that the mobile payment market in the US will touch $90 billion in 2017 and Stripe is now clearly positioned to become a major competitor to PayPal. The duo dodged any comparisons to Paypal, saying:

“There should be more transactions happening on the Internet on a macro basis, whether you believe that should be 20 per cent or 40 per cent. Well, what is holding it back? Our goal is to expand Internet commerce. We approach that problem rather than the competitive angle.”

But John Collison did say that he believed that the online payment market is still in its infancy:

“Payments are still startlingly disconnected and fragmented. Less than 5 per cent of consumer spending happens online today. It’s pretty clearly going to be much larger than that.”

Stripe is a rising star

Twitter Inc (NYSE:TWTR) wouldn’t comment on any potential deal with Stripe. The social networker hasn’t been earning enough from advertising and ‘promoted tweets’ to fund its development costs and is currently losing money, reporting a $64.6 million loss in the last quarter. But, most analysts say that profitability won’t be far away. The Daily Ticker’s Henry Blodget says of Twitter:

“If the margin goes up and revenues continue to grow at 100% per year, earnings are going to grow at a spectacular rate. If you can find something that tens of millions of people like to do and spend time with, ultimately, there are ways to monetise it.”

If that happens, Stripe is set to gain big time. Financial analysts have been calling Stripe, ‘the next big thing’ for some time and with this deal and plenty of financial backing, it looks like PayPal is finally facing its first big challenge.

Not bad for two 20-somethings from Limerick.