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Edwin from Stripe here. It’s worth distinguishing between charging money on Stripe (for which you incur payments pricing) and using Stripe Billing (which is a s

Edwin from Stripe here. It’s worth distinguishing between charging money on Stripe (for which you incur payments pricing) and using Stripe Billing (which is a separately-paid product). Stripe Billing has had this pricing for a few years. For some longtime users of Subscriptions, we originally didn’t change their pricing but are doing so now. We think charging a separate fee for our Billing product is fair, given comparable products in the market (say, Recurly or Chargebee) charge something similar. (Generally more!) We’ve been investing a ton in making Stripe Billing better. For example, from talking to users we learned people needed it be significantly easier to get up and running with subscriptions. So in the last year we built the Customer Portal[0]. (We’ve also listened to you and improved the analytics[1].) Payments is a low-margin business and our customers are (quite reasonably) very price sensitive. So to be able to make Billing a great product, we realized it was going to have to charge a fee commensurate with the product scope. [0] https://stripe.com/docs/billing/subscriptions/customer-portal https://stripe.com/docs/billing/subscriptions/customer-porta... [1] https://support.stripe.com/questions/billing-analytics-dashboard https://support.stripe.com/questions/billing-analytics-dashb...

vmception 6y ago
> Payments is a low-margin business and our customers are (quite reasonably) very price sensitive. Thanks for tackling a low margin business! I always look at people like they have two heads when they pitch something like that.
pixiemaster 6y ago
Well, if you start comparing yourselves to chargebee, they have a far more complex product - and really impressive traction in terms of new features being released regularly - combined with a really super support. I have not even seen a single company that deliver on the same level as chargebee does.
onassar 6y ago
Thanks for jumping in here so quick. I'm sure it'll be a tough thread, but something about this response rubs me the wrong way. It doesn't seem like it's really addressing the change (eg. why is it worth _existing_ customers to be paying an extra 0.5%? The fact that Stripe added features for new customers doesn't really impact those of us who have been with you for 5-10 years). Additionally, I don't recall getting an email about the price increase. I genuinely don't even know: am I going to be seeing this price increase? Would have liked getting an email about something like this, rather than finding out on HN, and now having to dig into things to figure out if I'm actually affected (which I presume I am). To give you a comparison: if my bank or credit card company increased their rate, I'd expect to be (and am) notified of that. My two cents :)
- john_minsk 6y ago
  Careful. They might want to develop one more dashboard - showing you structure of the fees and their changes. Brace yourself for another 0.5% fee to pay for it
- deleted 6y ago
  [deleted]
- edwinwee 6y ago
  Yes, you'll be emailed—if you were on the old Subscriptions pricing and are using Billing now, the emails are going out now (most have already been sent). Email me at edwin@stripe.com and we can also check.
  - onassar 6y ago
    Cool thanks
  - edwinwee 6y ago
    And to be crystal clear, the emails should be done sending today. The changes—which will take effect on January 15—only apply to businesses that have had at least $1M in lifetime billing volume (or will cross that threshold this year). All others can continue to have Billing for free.
    - gnicholas 6y ago
      If this million dollar threshold had been made clearer, I imagine a decent chunk of the people who are upset by this change would have reacted differently.
- tebbers 6y ago
  I don't think this is a pricing increase? It's just their pricing for Stripe Billing. It's been 0.5% since at least 2018 which is when I started using it. I'm not sure why this has suddenly exploded on HN.
  - 6y ago
loceng 6y ago
The economies of scale that Stripe is now benefitting from doesn't make your reasoning sit with me very well.
- texasbigdata 6y ago
  Yeah I mean, maybe being larger as a financial institution has some costs also. Primarily that it sucks. I interviewed at a hedge fund that had to submit (something) to (some regulatory body, don’t remember) because it was too systemically important. But they required dedicated staff to handle the regulatory burden. Given how tightly staffed that place was it was actually a meaningful portion of headcount measured as a percentage. Maybe some of those economies of scale are only 80% realized if you’re a financial institution. And rightfully so. Don’t have a horse in the game here re: Stripe, just hoping the damn kids will go on someone else’s lawn.
- smabie 6y ago
  How about: they're increasing the price to X because that's what they want to charge. They think price X will help maximize the long-term value of the company.
  - loceng 6y ago
    Sure, they can say that and be honest instead of trying to marinate us with these gymnastics; it's insulting too that they believe we can be manipulated like this.
    - thatguy0900 6y ago
      I think the war on nonsensical marketing speak has long since been lost
    - Cederfjard 6y ago
      What’s the manipulation? I’m not being a wiseass, I genuinely can’t see it.
fastball 6y ago
Recurly and Chargebee both provide helpful things like multi-currency support, which AFAIK Stripe Billing does not. At least this was true last time I looked into this.
floatingatoll 6y ago
To clarify, is "Stripe Subscriptions" a subset-of/component-of/deprecated-into "Stripe Billing"?
- edwinwee 6y ago
  Correct — Subscriptions was the really old one. Two years ago Billing was rolled out as Stripe's separate product for recurring charges and invoice management (https://stripe.com/billing https://stripe.com/billing).
  - floatingatoll 6y ago
    Thanks, appreciated. I notice that the post title has been updated to clarify that as well (wasn't me, but glad someone did!). Mod thread on title change here: https://news.ycombinator.com/item?id=25073970 https://news.ycombinator.com/item?id=25073970
jb775 6y ago
However you sugarcoat this, it's essentially shifting long term wealth away from your customers and into your pocket. People aren't stupid. Hopefully this triggers more competition.
amadeuspagel 6y ago
AWS doesn't charge anything for elastic beanstalk beyond the standard price for resources, even though of course competing products like heroku charge a lot more. I'm not arguing about fairness, I'm sure that's not a concern for AWS either, but if you have a basic product with solid margins, doesn't it make sense to account something you build on top of that product as marketing or documentation, rather then as a distinct product that has to pay for itself?
weego 6y ago
We think charging a separate fee for our Billing product is fair, given comparable products in the market (say, Recurly or Chargebee) charge something similar. Copying what other people in the market are doing is the antithesis of what made Stripe so important when it first launched.
- toomuchtodo 6y ago
  Processing margins are thin and they have a valuation ($36B) to justify, so they have to grow product margins where they can ("going upmarket"). Market realities/constraints.
  - Silhouette 6y ago
    That only works if you have a number greater than zero to multiply your margin by, though. Stripe is already relatively expensive among the payment processing options we have available. In the early years, that premium was justified for us because Stripe was also much easier to set up than anyone else at the time. But that was nearly a decade ago. Today, there is far more competition from other payment processors, while the experience of using Stripe as a merchant is far worse. I'm assuming that they've simply decided to focus their business on the larger merchants who are obviously worth much more to them individually, but those merchants surely have negotiated rates below headline and won't be paying an extra 0.5% for this either, so it's a puzzling move.
mentos 6y ago
Awesome, I setup subscriptions using Stripe for a website a few months ago for the first time and was so turned off by how convoluted the process was I was actually thinking about emailing Stripe to suggest they take a hard look at the process and how to make it easier. Glad to see that was already underway, great work!
eigthbits 6y ago
I've had to run a number of price changes (mostly increases) over the years. In case the folks with pitchforks are unclear, your mistake was not clearly communicating to your customers. Every impacted customer should have received an email that explained the change, how much their bill would increase, and a timeline for the increase that would give them a few months of runway make other plans.
jb775 6y ago
At the end of the day, you're using electricity to send around a bunch of 1's and 0's. The amount of electricity used doesn't change much whether it represents $10 or $100,000...so why do you need a percentage of the total? I understand existing banking structures already work on the percentage model (so there's probably downstream percentage-based charges Stripe must pay), but why can't this entire banking structure be disrupted to transfer that value back to society?
- brianwawok 6y ago
  It can be, but one of the big guys will buy you and raise the price of your product.
- Samin100 6y ago
  Cost-based pricing rarely makes sense for software products, as almost all products are just “sending around a bunch of 1’s and 0’s”. If that were the case, almost all software would cost just pennies a month. I’m not a fan of Stripe’s price increase for recurring plans either, and I think they could’ve communicated it better, but their pricing is far from unreasonable given the amount of research and engineering effort they put into the product that I don’t have to do myself.
- robertlagrant 6y ago
  The majority of most business' costs do not primarily scale with electricity usage.

vmception 6y ago

> Payments is a low-margin business and our customers are (quite reasonably) very price sensitive. Thanks for tackling a low margin business! I always look at people like they have two heads when they pitch something like that.

pixiemaster 6y ago

Well, if you start comparing yourselves to chargebee, they have a far more complex product - and really impressive traction in terms of new features being released regularly - combined with a really super support. I have not even seen a single company that deliver on the same level as chargebee does.

onassar 6y ago

Thanks for jumping in here so quick. I'm sure it'll be a tough thread, but something about this response rubs me the wrong way. It doesn't seem like it's really addressing the change (eg. why is it worth _existing_ customers to be paying an extra 0.5%? The fact that Stripe added features for new customers doesn't really impact those of us who have been with you for 5-10 years). Additionally, I don't recall getting an email about the price increase. I genuinely don't even know: am I going to be seeing this price increase? Would have liked getting an email about something like this, rather than finding out on HN, and now having to dig into things to figure out if I'm actually affected (which I presume I am). To give you a comparison: if my bank or credit card company increased their rate, I'd expect to be (and am) notified of that. My two cents :)

john_minsk 6y ago
Careful. They might want to develop one more dashboard - showing you structure of the fees and their changes. Brace yourself for another 0.5% fee to pay for it
deleted 6y ago
[deleted]
edwinwee 6y ago
Yes, you'll be emailed—if you were on the old Subscriptions pricing and are using Billing now, the emails are going out now (most have already been sent). Email me at edwin@stripe.com and we can also check.
- onassar 6y ago
  Cool thanks
- edwinwee 6y ago
  And to be crystal clear, the emails should be done sending today. The changes—which will take effect on January 15—only apply to businesses that have had at least $1M in lifetime billing volume (or will cross that threshold this year). All others can continue to have Billing for free.
  - gnicholas 6y ago
    If this million dollar threshold had been made clearer, I imagine a decent chunk of the people who are upset by this change would have reacted differently.
tebbers 6y ago
I don't think this is a pricing increase? It's just their pricing for Stripe Billing. It's been 0.5% since at least 2018 which is when I started using it. I'm not sure why this has suddenly exploded on HN.
- 6y ago

loceng 6y ago

The economies of scale that Stripe is now benefitting from doesn't make your reasoning sit with me very well.

texasbigdata 6y ago
Yeah I mean, maybe being larger as a financial institution has some costs also. Primarily that it sucks. I interviewed at a hedge fund that had to submit (something) to (some regulatory body, don’t remember) because it was too systemically important. But they required dedicated staff to handle the regulatory burden. Given how tightly staffed that place was it was actually a meaningful portion of headcount measured as a percentage. Maybe some of those economies of scale are only 80% realized if you’re a financial institution. And rightfully so. Don’t have a horse in the game here re: Stripe, just hoping the damn kids will go on someone else’s lawn.
smabie 6y ago
How about: they're increasing the price to X because that's what they want to charge. They think price X will help maximize the long-term value of the company.
- loceng 6y ago
  Sure, they can say that and be honest instead of trying to marinate us with these gymnastics; it's insulting too that they believe we can be manipulated like this.
  - thatguy0900 6y ago
    I think the war on nonsensical marketing speak has long since been lost
  - Cederfjard 6y ago
    What’s the manipulation? I’m not being a wiseass, I genuinely can’t see it.

fastball 6y ago

Recurly and Chargebee both provide helpful things like multi-currency support, which AFAIK Stripe Billing does not. At least this was true last time I looked into this.

floatingatoll 6y ago

To clarify, is "Stripe Subscriptions" a subset-of/component-of/deprecated-into "Stripe Billing"?

edwinwee 6y ago
Correct — Subscriptions was the really old one. Two years ago Billing was rolled out as Stripe's separate product for recurring charges and invoice management (https://stripe.com/billing https://stripe.com/billing).
- floatingatoll 6y ago
  Thanks, appreciated. I notice that the post title has been updated to clarify that as well (wasn't me, but glad someone did!). Mod thread on title change here: https://news.ycombinator.com/item?id=25073970 https://news.ycombinator.com/item?id=25073970

jb775 6y ago

However you sugarcoat this, it's essentially shifting long term wealth away from your customers and into your pocket. People aren't stupid. Hopefully this triggers more competition.

amadeuspagel 6y ago

AWS doesn't charge anything for elastic beanstalk beyond the standard price for resources, even though of course competing products like heroku charge a lot more. I'm not arguing about fairness, I'm sure that's not a concern for AWS either, but if you have a basic product with solid margins, doesn't it make sense to account something you build on top of that product as marketing or documentation, rather then as a distinct product that has to pay for itself?

weego 6y ago

We think charging a separate fee for our Billing product is fair, given comparable products in the market (say, Recurly or Chargebee) charge something similar. Copying what other people in the market are doing is the antithesis of what made Stripe so important when it first launched.

toomuchtodo 6y ago
Processing margins are thin and they have a valuation ($36B) to justify, so they have to grow product margins where they can ("going upmarket"). Market realities/constraints.
- Silhouette 6y ago
  That only works if you have a number greater than zero to multiply your margin by, though. Stripe is already relatively expensive among the payment processing options we have available. In the early years, that premium was justified for us because Stripe was also much easier to set up than anyone else at the time. But that was nearly a decade ago. Today, there is far more competition from other payment processors, while the experience of using Stripe as a merchant is far worse. I'm assuming that they've simply decided to focus their business on the larger merchants who are obviously worth much more to them individually, but those merchants surely have negotiated rates below headline and won't be paying an extra 0.5% for this either, so it's a puzzling move.

mentos 6y ago

Awesome, I setup subscriptions using Stripe for a website a few months ago for the first time and was so turned off by how convoluted the process was I was actually thinking about emailing Stripe to suggest they take a hard look at the process and how to make it easier. Glad to see that was already underway, great work!

eigthbits 6y ago

I've had to run a number of price changes (mostly increases) over the years. In case the folks with pitchforks are unclear, your mistake was not clearly communicating to your customers. Every impacted customer should have received an email that explained the change, how much their bill would increase, and a timeline for the increase that would give them a few months of runway make other plans.

jb775 6y ago

At the end of the day, you're using electricity to send around a bunch of 1's and 0's. The amount of electricity used doesn't change much whether it represents $10 or $100,000...so why do you need a percentage of the total? I understand existing banking structures already work on the percentage model (so there's probably downstream percentage-based charges Stripe must pay), but why can't this entire banking structure be disrupted to transfer that value back to society?

brianwawok 6y ago
It can be, but one of the big guys will buy you and raise the price of your product.
Samin100 6y ago
Cost-based pricing rarely makes sense for software products, as almost all products are just “sending around a bunch of 1’s and 0’s”. If that were the case, almost all software would cost just pennies a month. I’m not a fan of Stripe’s price increase for recurring plans either, and I think they could’ve communicated it better, but their pricing is far from unreasonable given the amount of research and engineering effort they put into the product that I don’t have to do myself.
robertlagrant 6y ago
The majority of most business' costs do not primarily scale with electricity usage.