My bare minimum recurring expense with Braintree is $130/mo. That's our largest recurring expense. What's wonderful about Stripe is that there is no "minimum" service charge. If you don't do a lot of transactions, you don't pay a lot of fees. That makes it very low risk to spin up a service and give it a little time to see if it works. When I've talked to people with day jobs about their SaaS side-projects, it's common to hear people aiming for "an extra $500 a month." That's a respectable goal for a side-project, considering that sort of money could trim most people's mortgages by a decade or more, but it makes Braintree (developer friendly as they are) a huge expense. Thankfully for me Braintree was one of the first payment gateways to promote the idea of data portability, so getting my subscribers into Stripe from Braintree should not be a huge hassle.
Does this fact cause you any concern over stripe's decision to serve small companies for whom 130 dollars is a significant amount over large customers who will be turned off by their percentage fees? My main resistance to switching to stripe is that I can't figure out how they are going to make any money. I'd like the extra 130 dollars each month, too, but will it last?
A company for whom $130 is significant today is not necessarily a company for whom $130 is significant tomorrow. One thing we want to do is lower the barrier to people trying out their ideas, and for those ideas that turn out well we've gained a large customer. For those that don't go well we (and our user) basically break even.
And as well as being a home for the casual weekend project, we have a number of users processing millions of dollars a year.
I would imagine, though, that companies that are "on their game" enough to become big are probably also the kind of company that will realize that they are now being burned on per-transaction costs rather than fixed overhead, and have the wherewithal to spend the week required to recorde their backend for a different API. Some companies won't get around to it quickly (after all: successful companies are busy), but that still seems like an awkward thing to rely on.
So, on that note, have you thought about setting up fees that scale better for larger companies? If you are doing two million dollars a year, PayPal's fees (for an example; PayPal is even a little more expensive than most processors, but are simply so far reaching it is hard to avoid them) will have dropped to 1.9% from 2.9%, saving $1666/month; at $10 million a year, this is enough for a reasonably high quality full-time employee.
Not concerned at all. One of the team members there mentioned in an earlier thread that some big customers are already using it. Furthermore, the pricing model is very similar to what Square did in the point-of-service credit card space, and they're doing a massive amount of business now. I think the vast number of folks that they'll attract will far outweigh that recurring $130 security blanket.
For the better part of $1560 a year, I'll take a chance on them. :)
You may be right - as I said, I'm tempted. I am somewhat concerned that they will have a "Chargify moment" when support costs become a driver. But I hope that's not the case - Stripe looks amazing.
What exactly do you mean by "large customers"? We run several million dollars worth of credit card transactions per year( through cybersource and authorize.net right now ), and we pay at or near the wholesale interchange rate.
Even so, our accounting department still can't fully untangle the mess of foreign transfer and conversion fees, float-related costs, gateway fees, amex vs visa discount rate differentials, pci compliance service fees, and all the other horrible shit that Stripe eats for you, in order to give me a straight answer as to whether or not we currently pay more or less than 0.30 + 2.9%.
This is not a hit on our accountants, cybersource, stripe, or our merchant bank - just making the point that it's not so easy to state categorically that Stripe's fees will turn off somewhat larger volume customers.
Generally you end up paying 3.5-4% assuming you accept foreign credit card transactions, Amex, corporate cards, rewards cards, etc. There's a misconception that it's around 2%, but if you do these types of transactions and look closely at your statements, 3.5-4% is the normal range, including a few chargebacks.
If you are indeed close to interchange, you shouldn't have an issue with many of those things (aside from Amex). Cybersource and Authorize.net are a source of your problems - they do their best to lock you in to terrible pricing and tack on hefty fees all over the place.
Foreign fees really should be quite close to your other fees. You take a hit on the fact that they are "foreign" but they actually fall under a lower interchange category, so it comes out a wash for the most part. There should be no float-related costs, gateway fees are standard for auth.net, most reasonable places won't charge you PCI fees if you fill out the simple questionnaire, etc. With a decently-priced interchange plus merchant account and gateway, you should come out much cheaper.
Disclosure: I'm with FeeFighters (http://feefighters.com). We have a bundled merchant account/gateway (http://samurai.feefighters.com) that is a bit different from Stripe, priced at 2.3% + $0.30, but has a monthly fee of $25 and AmEx is separate (2.9%+$0.15).
Does anyone know why I should not use stripe as compared to Braintree, etc.? Is there a fundamental issue, that I have missed, or is most of the discussion surrounding price and volume.... as it stands, it seems like a no-brainer to use stripe for any new projects.
I tested out Stripe last weekend. It's really, really simple. You can be up and running and billing shit inside of an hour, HTML and all, depending on how quick you are. The tutorial is dead simple and so are the docs.
You should go check it out, if you're interested. You'll see that there's really no need to wait for a video.
(I set stripe up in both PHP and Python, did the HTML and CSS and everything in a couple of hours. Was easy. I like things to be easy. -- Now I just need something to charge for... :P)
Missing various elements that most SaaS companies need or will need; API-based vs. UI with complete functionality; lots of development work still necessary to have the type of e-commerce subscription management infrastructure that a serious company needs. Cant work with non-US clients. A comparison between SaaSy.com and other services which illustrates some of the missing global subscription e-commerce functionality: http://bit.ly/nSKT7J
I love Railscasts, but this seems a little premature even by Rbates standards or popularity. Generally, Railscasts revolve around industry standards. I'm not saying Stripe won't be, it probably will... but man, this is some front running.
