7 ms·

Stripe pretty much takes payment processing kicking and screaming into 2011. Merchant accounts are a serious drag. I've opened a few and they've been nothing bu

by markbao 15y ago

Stripe pretty much takes payment processing kicking and screaming into 2011. Merchant accounts are a serious drag. I've opened a few and they've been nothing but headaches (especially if you're young—nobody trusts you.) Couple that with getting a gateway account, dealing with credit checks, monthly fees, monthly minimums, slow people in the payments industry, PCI compliance... Stripe takes payments and put them behind a simple API. No crappiness and 1099 rules of PayPal. No more reconsidering the meaning of life like back when I had a merchant account. The only downside I see is the 7-day rolling batch (deposit to bank), versus the nightly batch from the merchant account, though I assume that is for fraud protection. Maybe if you're charging millions of dollars, you should use a regular merchant account. If you aren't, I'm telling you now: don't even bother with a merchant account. Just use Stripe.

zaidf 15y ago
they've been nothing but headaches (especially if you're young—nobody trusts you.) Ah, things must have changed from early 2000s. I had no problems getting (pretty high risk) merchant accounts back in high school. That said, Stripe looks pretty cool. No more authorize.net mess=)
- dorianj 15y ago
  I'm a college student, and pay cash for nearly everything, so I have very little credit history. After trying 3 or 4 merchants earlier this year, I still couldn't find one that would accept me, even with my father co-signing. Stripe is good news for young businesses.
  - high5ths 15y ago
    Get a credit card and start using it -- paying it off 100% every month. I was in your shoes only a few years ago and it is worth starting to build your good credit early on. Even if you can only get a $300 limit.
    - sixtofour 15y ago
      Variation: you can get a secured credit card. Give them money, and that's your limit. But it's a credit card nonetheless. After some period of time, you get the money back, and a better card. Talk to your bank.
- sammcd 15y ago
  I've been turned down a few times for merchant accounts. The company I started in college got turned down, and we ended up using paypal.
bkmartin 15y ago
When I set mine up I didn't have any of the problems you describe. I had a business checking account with my local bank, and got set up with usaepay. Now, of course there is verification of who you are and what kind of business you run, but it was hardly a "hassle". I was only 26 and had no previous business "history" or anything like that, heck I'm set up as a sole proprietor. I don't have a monthly statement fee, no minimums. I pay a very low rate... so low that I'm dumb founded by half the rates I see ADVERTISED as low. Anyway, just thought I'd offer a good experience to the mix.
collision 15y ago
> Maybe if you're charging millions of dollars, you should use a regular merchant account. You should probably still use Stripe in this case. (Some people already are.) We scale up pretty well. Everything that you get with a merchant account (correct statement text, money held in your name), you get with Stripe. Additionally, there are some advantages for large businesses that would make Stripe more attractive than a merchant account: transfer reporting and detailed reconciliation tools make a big difference to people doing high throughput.
- rorrr 15y ago
  He means the fees. You can pay significantly less than 2.9% + 30¢ with a merchant account.
- ecommercematt 15y ago
  How do you handle situations in which you can't tell if someone is legitimately undergoing hyper-growth or committing fraud? In a prior startup, I had my funds held indefinitely by PayPal and 3 separate merchant banks because our rapid growth made them suspect us of fraud or perhaps that our business was just too risky because our numbers were changing so rapidly. Our ultimate solution was to engage a merchant bank that specialized in sight-unseen, no swipe/no sig transactions that we could meet with face-to-face.
  - boucher 15y ago
    There's no simple thing I can say here. There are situations where withholding funds might be required, but they should be exceedingly rare. In other words, we're hoping to eliminate false positives. In general, we're a tech company and we're looking for technical solutions to problems. We're also just culturally familiar with startups that explode in popularity, so we aren't worried about that kind of behavior.
    - bprater 15y ago
      You may want to seriously consider working on fleshing out this plan now. Paypal supposedly has thousands of people working in fraud control. When word gets out that Stripe makes it "dead simple" to process credit cards without a merchant account, the vampires will come out to play. And I'm truly excited for a service like yours. We need this. But be prepared.
barrydahlberg 15y ago
I would love to see someone drag it kicking and screaming outside of the US. :(
- the_gws 15y ago
  It would be great as a starting point to be able to charge in currency other than USD, I suppose that should be easier to set-up than accepting non-US based merchants. There are a lot of non-US people like me that have a SSN and US bank account from past US experiences that can already use Stripe in their home countries. But marketing a product in Italy with a price in USD won't cut it!
- vertis 15y ago
  Providing international support is probably in the 'too hard' basket.
  - diminish 15y ago
    I wish there were a trustworthy global payment operator a la Stripe.
    - illumen 15y ago
      There is.
      - PedroCandeias 15y ago
        Great. Who?
  - saikat 15y ago
    Not too hard! We're working on it right now and hope to have international support soon.
    - arkitaip 15y ago
      Maybe you could set up a mailing list that notifies international users when your service expands internationally?
Yevgeny 15y ago
I would have to agree; a plethora of headaches are to be expected when dealing with merchant accounts. Monthly fees coupled with compliance issues and constant intervention make for extra work. Relying on merchants is like relying on your local broker. Nonetheless, certain merchant accounts will allow you to escape with fees almost a full point less than Stripe. Not to mention, the 7-day rolling period can seriously impact operations pending your specific business structure. I for one am curious to learn more about how Stripe can customize payment flows...
0x12 15y ago
Well... yes and no. It's great to see more payment options. But segregated merchant accounts are there for a reason, pretty much every company that is in the payment processing world that does not use segregated merchant accounts sooner or later goes bust. See DMR and ibill for some nice examples of what happens when you multiplex a merchant account across more than one customer. By making sure everybody has their own merchant account you may not make as much money on the transactions but you stay in business long term. And if there is one thing that really sucks it is to have to start all over again because your payment processor goes under, taking all your customers with it. Stuff like that can kill you. If your transaction volume is serious enough to warrant your own merchant account then you should probably get one.

by markbao 15y ago

zaidf 15y ago

they've been nothing but headaches (especially if you're young—nobody trusts you.) Ah, things must have changed from early 2000s. I had no problems getting (pretty high risk) merchant accounts back in high school. That said, Stripe looks pretty cool. No more authorize.net mess=)

dorianj 15y ago
I'm a college student, and pay cash for nearly everything, so I have very little credit history. After trying 3 or 4 merchants earlier this year, I still couldn't find one that would accept me, even with my father co-signing. Stripe is good news for young businesses.
- high5ths 15y ago
  Get a credit card and start using it -- paying it off 100% every month. I was in your shoes only a few years ago and it is worth starting to build your good credit early on. Even if you can only get a $300 limit.
  - sixtofour 15y ago
    Variation: you can get a secured credit card. Give them money, and that's your limit. But it's a credit card nonetheless. After some period of time, you get the money back, and a better card. Talk to your bank.
sammcd 15y ago
I've been turned down a few times for merchant accounts. The company I started in college got turned down, and we ended up using paypal.

bkmartin 15y ago

When I set mine up I didn't have any of the problems you describe. I had a business checking account with my local bank, and got set up with usaepay. Now, of course there is verification of who you are and what kind of business you run, but it was hardly a "hassle". I was only 26 and had no previous business "history" or anything like that, heck I'm set up as a sole proprietor. I don't have a monthly statement fee, no minimums. I pay a very low rate... so low that I'm dumb founded by half the rates I see ADVERTISED as low. Anyway, just thought I'd offer a good experience to the mix.

collision 15y ago

> Maybe if you're charging millions of dollars, you should use a regular merchant account. You should probably still use Stripe in this case. (Some people already are.) We scale up pretty well. Everything that you get with a merchant account (correct statement text, money held in your name), you get with Stripe. Additionally, there are some advantages for large businesses that would make Stripe more attractive than a merchant account: transfer reporting and detailed reconciliation tools make a big difference to people doing high throughput.

rorrr 15y ago
He means the fees. You can pay significantly less than 2.9% + 30¢ with a merchant account.
ecommercematt 15y ago
How do you handle situations in which you can't tell if someone is legitimately undergoing hyper-growth or committing fraud? In a prior startup, I had my funds held indefinitely by PayPal and 3 separate merchant banks because our rapid growth made them suspect us of fraud or perhaps that our business was just too risky because our numbers were changing so rapidly. Our ultimate solution was to engage a merchant bank that specialized in sight-unseen, no swipe/no sig transactions that we could meet with face-to-face.
- boucher 15y ago
  There's no simple thing I can say here. There are situations where withholding funds might be required, but they should be exceedingly rare. In other words, we're hoping to eliminate false positives. In general, we're a tech company and we're looking for technical solutions to problems. We're also just culturally familiar with startups that explode in popularity, so we aren't worried about that kind of behavior.
  - bprater 15y ago
    You may want to seriously consider working on fleshing out this plan now. Paypal supposedly has thousands of people working in fraud control. When word gets out that Stripe makes it "dead simple" to process credit cards without a merchant account, the vampires will come out to play. And I'm truly excited for a service like yours. We need this. But be prepared.

barrydahlberg 15y ago

I would love to see someone drag it kicking and screaming outside of the US. :(

the_gws 15y ago
It would be great as a starting point to be able to charge in currency other than USD, I suppose that should be easier to set-up than accepting non-US based merchants. There are a lot of non-US people like me that have a SSN and US bank account from past US experiences that can already use Stripe in their home countries. But marketing a product in Italy with a price in USD won't cut it!
vertis 15y ago
Providing international support is probably in the 'too hard' basket.
- diminish 15y ago
  I wish there were a trustworthy global payment operator a la Stripe.
  - illumen 15y ago
    There is.
    - PedroCandeias 15y ago
      Great. Who?
- saikat 15y ago
  Not too hard! We're working on it right now and hope to have international support soon.
  - arkitaip 15y ago
    Maybe you could set up a mailing list that notifies international users when your service expands internationally?

Yevgeny 15y ago

I would have to agree; a plethora of headaches are to be expected when dealing with merchant accounts. Monthly fees coupled with compliance issues and constant intervention make for extra work. Relying on merchants is like relying on your local broker. Nonetheless, certain merchant accounts will allow you to escape with fees almost a full point less than Stripe. Not to mention, the 7-day rolling period can seriously impact operations pending your specific business structure. I for one am curious to learn more about how Stripe can customize payment flows...

0x12 15y ago

Well... yes and no. It's great to see more payment options. But segregated merchant accounts are there for a reason, pretty much every company that is in the payment processing world that does not use segregated merchant accounts sooner or later goes bust. See DMR and ibill for some nice examples of what happens when you multiplex a merchant account across more than one customer. By making sure everybody has their own merchant account you may not make as much money on the transactions but you stay in business long term. And if there is one thing that really sucks it is to have to start all over again because your payment processor goes under, taking all your customers with it. Stuff like that can kill you. If your transaction volume is serious enough to warrant your own merchant account then you should probably get one.