5 ms·

How do you expect to get paid? That is a serious question, by the way. In general, let's say that you want to use credit card. That pretty much put you at the

by ayende 5y ago

How do you expect to get paid? That is a serious question, by the way. In general, let's say that you want to use credit card. That pretty much put you at the mercy of Visa & Mastercard. They charge you fees, and the cost of managing the interaction with them is significant. You can accept wire transfers, but note that this probably means quite a bit of dealing with the backend financial stuff (user paid, but didn't add the right invoice number, for example). PayPal or similar also have their fees. Using crypto for payment is possible, but the wild swings in price means that this is a highly unstable option. There are fees there as well (0.5 USD - 1 USD), and the time to close a transaction is a lot (10 minutes, IIRC). It is also making things like taxes a pain. And that is where you start to get into really "fascinating" territory. A truly underrated value you get is the fact that payment processors deals with all those issues around taxes, VAT, etc.

zinekeller 5y ago
This cannot be understated enough. Accepting cryptocurrency may hit you with KYC requirements in your region, PayPal is frankly worse than Stripe, opening a merchant bank account just to process might not be worth it, and oh PCI-DSS audits will just kill your idea off the ground of processing credit card payments, not to mention the hassle of actually handling the fallout of card data leak. If you're not in the US and will only process domestic transactions are are willing to skip acceptance of credit cards, you would want to look if your environment allows a much more simpler acceptance system (for example in Canada, parts of Europe and India a merchant bank account is relatively frictionless compared to American ones). Otherwise, read on. Unless you're a very big company with dedicated accountants and backend logistics and in the fees collected by Stripe will be bigger than bringing it inhouse, it'll be much, much more expensive to be honest. Stripe probably is the least worst option right now since that you don't need to have a merchant bank account for example, which can be an headache. However, if you want to minimise data collection at any cost, then probably only accept cash and cryptocurrencies (that is, if you run a node and not outsource it a la Stripe)?
Closi 5y ago
I think this raises really great points - but I think there is one additional major question too which is "what scale are you dealing at?". If you are handling billions of dollars in sales, then yes, rolling your own payment infrastructure will probably be worthwhile, but at that scale you will also be getting a very different commercial offer from the payment gateways anyway. If you 'only' have a million dollars in sales, then there isn't going to be a payback here (but there may be a cheaper payment gateway than Stripe). The fees to Visa and MasterCard can't be avoided - even Amazon is having a public commercial spat Visa over fees.
- 6510 5y ago
  And 3) If you have a small number of transactions bank transfers should work just fine.
Jugurtha 5y ago
>A truly underrated value you get is the fact that payment processors deals with all those issues around taxes, VAT, etc. I signed up for Stripe thinking it was the case but it turns out they don't handle VAT and taxes and I have to find something else (looking into Paddle and I would be grateful for suggestions and ideas). How are people here dealing with VAT and taxes for their SaaS in 2021. Company is in France, Europe. Clients could be anywhere. I wanted a one stop shop and thought Stripe did that.
- mjmasn 5y ago
  I think Stripe does now have a tax product. Not sure what the features/limitations are but it seems to be saying it handles VAT for you. Can't offer anything deeper than that as I haven't used it but thought I'd mention in case it was helpful! https://stripe.com/tax https://stripe.com/tax
  - Jugurtha 5y ago
    Thank you. I had recently looked at that quickly but I'll be more thorough soon.
- Silhouette 5y ago
  If you want a service that does all of the VAT admin on sales, including reporting and remittance to government authorities in all relevant jurisdictions, you might want a "merchant of record" service. You mentioned Paddle, who seem to be popular and getting positive reviews among my network, though they aren't the only MoR available now. Given how much pain governments are increasingly inflicting in this area, and the EU more than most, I expect that the market for these services will grow and using a merchant of record will become the dominant mechanism for accepting online payments, at least for smaller online businesses with significant international or inter-state sales. (I'm not sure this will be a good thing for various other reasons but it's what I expect to happen if current trends continue.) The tax products offered by Stripe and a few specialist providers seem to offer little more than tracking some VAT rates and doing some simple calculations. I don't understand who the target market is supposed to be for these services today. Anyone with the resources to handle reporting and remittance properly everywhere surely doesn't need to pay the extra fees just for a bit of tracking and arithmetic. Anyone who doesn't have those resources might prefer to outsource everything (including responsibility for compliance) to specialists who offer a comprehensive service.

by ayende 5y ago

zinekeller 5y ago

This cannot be understated enough. Accepting cryptocurrency may hit you with KYC requirements in your region, PayPal is frankly worse than Stripe, opening a merchant bank account just to process might not be worth it, and oh PCI-DSS audits will just kill your idea off the ground of processing credit card payments, not to mention the hassle of actually handling the fallout of card data leak. If you're not in the US and will only process domestic transactions are are willing to skip acceptance of credit cards, you would want to look if your environment allows a much more simpler acceptance system (for example in Canada, parts of Europe and India a merchant bank account is relatively frictionless compared to American ones). Otherwise, read on. Unless you're a very big company with dedicated accountants and backend logistics and in the fees collected by Stripe will be bigger than bringing it inhouse, it'll be much, much more expensive to be honest. Stripe probably is the least worst option right now since that you don't need to have a merchant bank account for example, which can be an headache. However, if you want to minimise data collection at any cost, then probably only accept cash and cryptocurrencies (that is, if you run a node and not outsource it a la Stripe)?

Closi 5y ago

I think this raises really great points - but I think there is one additional major question too which is "what scale are you dealing at?". If you are handling billions of dollars in sales, then yes, rolling your own payment infrastructure will probably be worthwhile, but at that scale you will also be getting a very different commercial offer from the payment gateways anyway. If you 'only' have a million dollars in sales, then there isn't going to be a payback here (but there may be a cheaper payment gateway than Stripe). The fees to Visa and MasterCard can't be avoided - even Amazon is having a public commercial spat Visa over fees.

6510 5y ago
And 3) If you have a small number of transactions bank transfers should work just fine.

Jugurtha 5y ago

>A truly underrated value you get is the fact that payment processors deals with all those issues around taxes, VAT, etc. I signed up for Stripe thinking it was the case but it turns out they don't handle VAT and taxes and I have to find something else (looking into Paddle and I would be grateful for suggestions and ideas). How are people here dealing with VAT and taxes for their SaaS in 2021. Company is in France, Europe. Clients could be anywhere. I wanted a one stop shop and thought Stripe did that.

mjmasn 5y ago
I think Stripe does now have a tax product. Not sure what the features/limitations are but it seems to be saying it handles VAT for you. Can't offer anything deeper than that as I haven't used it but thought I'd mention in case it was helpful! https://stripe.com/tax https://stripe.com/tax
- Jugurtha 5y ago
  Thank you. I had recently looked at that quickly but I'll be more thorough soon.
Silhouette 5y ago
If you want a service that does all of the VAT admin on sales, including reporting and remittance to government authorities in all relevant jurisdictions, you might want a "merchant of record" service. You mentioned Paddle, who seem to be popular and getting positive reviews among my network, though they aren't the only MoR available now. Given how much pain governments are increasingly inflicting in this area, and the EU more than most, I expect that the market for these services will grow and using a merchant of record will become the dominant mechanism for accepting online payments, at least for smaller online businesses with significant international or inter-state sales. (I'm not sure this will be a good thing for various other reasons but it's what I expect to happen if current trends continue.) The tax products offered by Stripe and a few specialist providers seem to offer little more than tracking some VAT rates and doing some simple calculations. I don't understand who the target market is supposed to be for these services today. Anyone with the resources to handle reporting and remittance properly everywhere surely doesn't need to pay the extra fees just for a bit of tracking and arithmetic. Anyone who doesn't have those resources might prefer to outsource everything (including responsibility for compliance) to specialists who offer a comprehensive service.