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I Created a $60K/Month App That Collects In-Person Payments Through Stripe
- ianai 7y agoAfter the news about pornhub and PayPal yesterday, any chances you’d add their use case?
- claviska 7y agoI believe that would be classified as a restricted business and disallowed by Stripe’s TOS. [1] 1. https://stripe.com/restricted-businesses https://stripe.com/restricted-businesses
- ianai 7y agoSure, but after having all that infrastructure and resources built up an expansion should be easier than starting at zero.
- faitswulff 7y agoStripe is kind of analogous to a utility company here. They're an upstream provider. They don't care about what "infrastructure and resources" you've built. If you break the terms of service, they will cut you off, just like if you don't pay for your gas/electric you will quickly find yourself with a non-functional home, regardless of how fancy it is.
- paulkon 7y agoIs Stripe forced to do this because of their upstream provider ToS, Well's Fargo?
- cmdshiftf4 7y agoDoes it matter? It's a private business, they can do what they want, right?
- calvinmorrison 7y agoEh it's kind of relevant. I worked at a high end tobacco sales company and we were limited to a few payment providers due to selling tobacco online. This amounted to using a very second tier provider. Also PayPal would flag anything with the words Cuba in it. So many cigars use the word Cuba, and we didn't sell those. Annoying at best, but at worse we had more frequent downtimes because our payment gateway wasn't close to reliable.
- freewilly1040 7y agoVery likely (I work for a payments co and many of our rules are pass throughs from Visa)
- disillusioned 7y agoYes. Have had the fun experience of being specifically de-platformed from Stripe because someone at Wells Fargo objected to what we were selling, despite having received Stripe's approval. (This was after several million dollars had run through Stripe, so it obviously caught someone's attention.) Ridiculous, the idea that Wells fucking Fargo is some sort of paragon of virtue.
- ianai 7y agoYeah I mean to build out whatever necessary to move away from Stripe and process payments internally.
- munchbunny 7y agoThat requires orders of magnitude more capital/work than what got the app to where it is. At that scale whatever this app already has built is irrelevant. Not to say this app isn’t valuable, because it is, but that you don’t just build your own payment processor.
- faitswulff 7y agoTo extend the analogy further, that's like saying "I'll just build my own electricity company" when they cut your power.
- rscherf 7y agoThought about this so many times with domain registrars. I’m content not being a huge company. Way simpler.
- rscherf 7y agoDoubtful.
- giarc 7y agoOPs app appears to be for physical, in person transactions. Pornhubs problem was online transactions.
- dvt 7y agoIt's interesting how a common tenet of startups is "build products, not features" -- and yet here's a very clear example of a "feature" that can be very successful.
- xwdv 7y agoIt’s still good advice, if you simply tell people “build whatever you want” they are more likely to fail and usually it’s because of having a featureable business.
- Apocryphon 7y agoIt's probably to get away with building a successful feature startup when it's just a hobby business.
- filleokus 7y agoWell, isn't that advice also mostly given to founders aiming to create a potential ≈unicorn and not a lifestyle business like this? Don't get me wrong, what this guy has done is impressive. Growing a company while staying profitable all the way, and being able to support himself is great. I would switch places with him (ex post facto) in a heart beat. But still, this company will probably never be bought by anyone (besides maybe Stripe), and could very well exist for many years to come with 1-2 employees including the founder.
- taneq 7y ago$60k/month is a hell of a “lifestyle”.
- rscherf 7y agoAgreed, but spent most of it on the business and buying out my partner in the first 4 years.
- guynamedloren 7y agoI'm sure buying out your partner was an incredibly difficult decision to make. Good on you for leaning into what you've built by putting your money where your mouth is. I hope it pays off for you, and thanks for sharing your story with us.
- echelon 7y agoIsn't this just Square, but with cheaper processing fees (since Stripe is eating the bill)?
- PunksATawnyFill 7y agoThat's funny: I read "Stripe," but was thinking of Square the whole time and asking, WTF, how did this functionality not exist? Wasn't that the whole point? Now I think how the hell did Stripe even work without being able to accept cards? What's the point of it, then?
- gruez 7y ago>but with cheaper processing fees What? The product's page says it charges 1% + whatever Stripe charges ("generally" 2.9% + $0.3). A quick search says that Square charges 2.6% + $0.10 per in-person transaction. Seems like that this product is more expensive than Square.
- echelon 7y agoAh, good find! The article claims > The app collects a 1% service fee on every single charge. Per your comment, this is indeed a more expensive Square. Square already does Card Not Present transactions. The question then is why do people choose to use this?
- treyfitty 7y agoThe only thing I can think of is because certain issuers/networks treat Card Not Present transactions differently for chargeback disputes. For example, depending on the network, if you fail to collect CVV or zip code, you automatically lose second presentment rights. I don’t know how CNP vs CP charges are priced, but the mere presence of different fraud liability treatment leads me to believe there’s a fundamentally different lens applied to online transactions, and real life (less likely to be fraud?) transactions. Just my guess
- NoInputSignal 7y ago
- alibaba_x 7y agoHow can such an app compete against Stripe’s very own Terminal? Don’t this guy’s customers know that an official option exists? https://stripe.com/terminal https://stripe.com/terminal
- kohanz 7y agoAt first glance, Terminal looks like it still needs some level of integration and development work. It's not a ready-to-go, install-the-app-and-process-payments solution.
- xyzzy_plugh 7y agoTerminal is really for people like this guy. For folks who want to sell/distribute integrated POS systems e.g. Shopify.
- rscherf 7y agoThat’s exactly right. Terminal solved a problem for me (I used to integrate Mattel card readers to a serious amount of pain). I worked with Stripe to help identify good ones, and they built easy to use APIs to integrate. This is exactly what they hoped for.
- GhostVII 7y agoI think terminal is largely targeted at bigger businesses, where as this product is more like Square, targeted at small independent businesses and shops.
- giarc 7y agoThat's just one more thing to carry. If you have the option of just using your phone, what are you going to pick?
- muzani 7y agoHonestly, it sounds like the OP is doing a great job at sales, and he's just making money as an underpaid affiliate.
- ttraub 7y agoHe's getting 80% of the gross = 48,000/month. That's impressive income, half a million a year for what amounts to a good idea implemented at the right time. I love reading stories like this, and it demonstrates that there are still many opportunities out there. I don't understand some of these comments which seem to resent his success or belittle his company as "not a unicorn". That's good money, he works for himself, not beholden to investors or creditors, and he's raising a young family in an affordable region. Congratulations to him for a job well done.
- wallace_f 7y ago>I love reading stories like this, and it demonstrates that there are still many opportunities out there. It's a white male taking advantage of capitalism. He has no regulatory oversight and no degree or license pertaining to this work.
- rscherf 7y agoThank you! I’ll be first to admit it was perfect timing (which wasn’t planned at all). The freedom is what I was looking for; if nobody buys it, I’ll happy just keep running it. If Stripe launches the same features, I’ll figure out how to pivot. Or, build something completely new. Who knows what the future holds.
- NoblePublius 7y agoWhat does this do that Square doesn’t?
- Scoundreller 7y agoDiff their ToSs and then focus on whatever equals (Stripe minus Square). Or maybe he ranks #1 in Google for 2% of the search terms that relate to processing credit cards.
- tempestn 7y agoIt's convenient for businesses that already use Stripe.
- jliptzin 7y agoCouldn't stripe just add this feature in their mobile app? Why haven't they done so?
- scottmcf 7y agoThat would be my concern for this business. It'll disappear instantly when they do (and it's got to be a when, right?) but he's getting good value for moving quickly. Or maybe they get acquired.
- hackermailman 7y agoWhen Stripe eats his lunch, he'll just find something else to simplify/solve they offer that's too complex, and probably still make money. They may even try and hire him as a product manager or something.
- rscherf 7y agoI guess it’s possible they’ll eat it, but they sort of already are. They get the benefits of my work on growth as they get their same fees and don’t have to dedicate anyone to an app.
- 52-6F-62 7y agoThat’s exactly how many back end payment processors work in Canada. Banks would even rather pay a third party to handle things like (what we have called) Interac email money transfers than do the work in house as it saves on large amounts of overhead, administrative and insurance costs. You’ve got a good niche and I have to admit I’m envious of the position you’re in—that level of autonomy seems rare. It’s also a stupidly great idea for non-technical trade and craft shows. No infra or complex setup needed. Smart. Well done.
- rscherf 7y agoWhy instantly? Is there not a market for more than one third party app with separate features? Does Stripe want to compete with Square, or are they focused on larger things? And if they do, I got nearly 5 years out of it, which is the longest job I’ve ever had, ironically.
- jonkratz 7y agoI had the opportunity to play a very small part in a previous project of Ryan’s. He’s a great person and I’m incredibly happy to see the success he’s had. It’s encouraging to hear stories like this — you don’t know how any particular side project (hobby) might do, but the right product at the right time can be what makes all the difference. And you don’t need to have VC money and tens or hundreds of developers working on something to bring genuine value to people.
- jagira 7y agoWhy does USA not have a system like UPI (https://en.wikipedia.org/wiki/Unified_Payments_Interface https://en.wikipedia.org/wiki/Unified_Payments_Interface)? It simpler, easier and cheaper (mostly free).
- krtkush 7y agoUPI must be the single greatest thing that have come out of India in recent years; digital payments made absolutely simple.
- abvdasker 7y agoHaving done a UPI integration for a well-known multinational tech company, I consider it a mixed bag. For the end-user it's a great concept and continues to revolutionize payments in India. It's convenient and it will help India transition away from a cash economy. UPI is clearly the future. However, UPI currently has a lot of problems. Number one is that to use UPI as a payment method for your product you have to integrate with one of India's banks, which in my experience are almost uniformly technically very bad. They provide almost no documentation, have frequent and often severe service outages, and don't even come close to meeting their availability SLAs. I'm sure over time it will improve but as it stands many of India's banks are not technically capable enough to support UPI with the level of reliability that most businesses require.
- cmonnow 7y ago> have to integrate with one of India's banks what you mention as a disadvantage is the biggest advantage. cut out the card men. Banks' technical prowess will catch up. That is the solution. Not introducing a middle man just because he is technically better now.
- kuschku 7y agoWhich is the same idea as SEPA-ICT or the German girocard system. Cut out the middle men, the card companies, and suddenly everything is 2-3% cheaper, and faster, and simpler.
- heyalexej 7y agoSlightly off-topic and not doubting this particular story. Posts from this blog get submitted every few minutes it seems. Is anyone checking and verifying the numbers these companies and "startups" claim to make? If so, how?
- rscherf 7y agoI’m the founder, and although I can’t speak for the other posts, I can assure you the numbers are real. Several posts in my personal and business Twitter feeds can confirm.
- ignoramous 7y agoIncredible story and a pretty good product. It takes some skill to out do Stripe at being easier and simpler to setup and use. Thanks for the inspiration. Congratulations!
- rasikjain 7y agoVery inspiring Ryan!! Impressive to capitalize on the customer need. This gives the financial freedom and time to pursue other interests. Best wishes!!
- fagnerbrack 7y ago"I personally respond to every single support request. This allows me to keep my pulse on what’s working and what isn’t, and get ahead of the features that are being requested often." Programmers closer to the customer. Check.
- Dunedan 7y ago> I’ve set a goal to be processing $10M/month in Stripe volume by Spring, which is a pretty big stretch goal. As the app is already highly profitable, why suddenly such an ambitious goal?
- rscherf 7y agoGreat question. It’s not about the money, but more about how I was passive for too long just letting it be. I’ve waited to invest in several things for growth until I knew had the market cornered. I’m not too concerned about adding more features now, so the only next logical step is growth. Growing from $6M to $10M didn’t seem huge at the time, but now it does...
- elbear 7y agoStill, what's your motivation for wanting to grow more? Money can be a legitimate motivation, but you said that's not it. I guess I'm curious what drives you now.
- rscherf 7y agoLarger user base will hopefully protect me from being cut off.
- agustif 7y agoOne could argue also the contrary, a larger user base might make you more of a target for Stripe to cut-off. Who knows.
- rscherf 7y agoThat argument doesn’t make any sense to me. Stripe gets 2.9% regardless of how many users I have. It’s just volume to them.
- pretentiousPear 7y ago
- ratsimihah 7y ago> For instance, the just build it and ship it mentality is something you won’t find in any book -- as it doesn’t discuss testing, finding product-market fit, etc. I think that's essentially what This is marketing by Seth Godin covers.
- K0SM0S 7y agoIirc also Lean Startup by Eric Ries —this is basically part of that— as well as The War of Art by Steven Pressfield (to some degree). It's also generally the motivation behind agile from a management standpoint. Definitely tons of literature covering this approach.
- prostanac 7y agoHow do they handle physical receipts? In my country you are required to provide a paper receipt for every transaction.
- unnouinceput 7y agoIn our country you can also just get the transaction itself printed on your own and use that as a receipt for tax man. Sanatate!
- rscherf 7y agoNot required in the US. Email receipts are built into Stripe if you provide emails.
- brobdingnagians 7y agoOne of the things I love about this is that it is an independent small business that helps others run their own independent small businesses. It makes it easier to decentralize markets and for people to work for themselves. one of the things I don't like much about some "startup unicorns" is that they seem to have as their goal to employee lots of other people and become just like every other large corporation. But I applaud solutions that help people become more free to pursue their own ideas. And even though Stripe is a unicorn itself, it helps the small businesses by having an excellent API that eases integration and products like this.
- lovetocode 7y agoGreat job! Congratulations on your success!
- homero 7y agoHow'd you manufacture a card reader?
- rscherf 7y agoDidn’t. First integrated with Magtek (insanely painful). Then I wished that another company would make it simpler. Along cane Stripe’s Terminal and here we are.
- jimnotgym 7y agoDoes this have a market outside of the US, without chip&pin card readers? You are taught in the UK never to take face to face payments without chip & pin or chargebacks are indefensible.
- rscherf 7y agoWe have an integration with Payworks for non-US, but mostly hoping Terminal rolls out globally soon. But, no card reader is required.
- jimnotgym 7y agoSo how do you handle chip & pin without a card reader?
- rscherf 7y agoIt’s handled as non card present, similar to e-commerce. At some point, 3DS will be required.
- jimnotgym 7y agoSo if the person in front of your stall has a stolen card, and you are about to sell them some goods. Let us say you are selling them a tv. They play with their stolen card, take the tv, the card owner sees a transaction they don't know and complain to their bank, you get a chargeback. You just lost a tv. In the UK this is rare, due to chip & pin. It is very easy to defend a chargeback when the customer entered a pin into your terminal. If someone wants a tv delivered to their house you do a 'customer not present' transaction, which can use their house number and area code to authenticate that the card is registered at the address you are delivering to. Now if they raise a chargeback you can defend it by showing a delivery note etc. If you use a 'not present' to do a face to face sale surely you have just defeated the security model entirely?
- rscherf 7y ago
- homero 7y agoI haven't been able to connect to https://payment.co/ https://payment.co/ yesterday or today
- rscherf 7y agoLooks like the redirect is broken. Try https://paymentforstripe.com https://paymentforstripe.com
- plinkplonk 7y agoHey Ryan, In the interview you say that you transitioned from dev to design. How did you go about doing this? Any advice for someone planning a similar shift?
- rscherf 7y agoI always had an interest in design, designing a lot of websites before and during college. My first job out of college was a Java Support Dev, for a health care company, which was soul-sucking. Troubleshooting production bugs and fixing them was not something I wanted to do. I volunteered to build the interface of a product we were working on and never looked back.