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Stripe’s real pricing: a primer

417 points by AnhTho_FR 4y ago

dkyc 4y ago
Working at a company that is currently making this decision, I appreciate the blog post. That being said, I absolutely don't see how they arrive at their numbers. They state that SaaS founders routinely pay "4-8% of revenue" to stripe. Then their own calculation ends up at 4.2% of revenue using a combination of all Stripe services possible (Billing, Payments, Tax, Data Pipeline). Where are the other ~4% supposed to come from? If anything, the calculation is overstating the realistically expected cost in a few ways: - Particularly B2B SaaS will likely have some % of invoice/bank transfer payment. Assuming 100% payment via credit card is a 'worst-case' assessment. - Even given that, the bulk of the cost are credit card processing fees, which you would pay either way. Maybe not exactly at stripe's rate, but something similar. - Stripe Tax for example doesn't charge 0.5% of revenue flat. It only charges for revenue where you’re registered to collect taxes, which for an international business will be far from every transaction (depends on locality & customer base, of course). In addition to that, the pricing drops to 0.4% if you process more than $50k per month. All in all, I appreciate the effort, but given that Lago is a stripe competitor, this calculation dressed up as a 'neutral assessment' on Github seems disingenuous and makes me trust them less.
- ecedeno 4y ago
  “+33c per transaction” For a B2B SaaS this likely represents a minuscule percentage of the revenue. For a $5/month subscription, this fee alone is more than 6%
  - dkyc 4y ago
    You are right, and I see how that would push up the bill as % of revenue. That being said, this has nothing to do with stripe's software platform which this article focuses on, and all to do with credit card payment fees. Braintree charges "2.59% + $.49 per transaction". PayPal charges "3.49% + $.49 per transaction". Square payments charges "2.9% + $.30 per transaction".
    - Dand313 4y ago
      I think they are comparing to MoRs like fastspring or paddle where the % is higher?
    - newaccount74 4y ago
      It's important to consider when you compare with App Stores or resellers that charge a flat fee of 15%-30%. Another important factor that is missing is currency exchange rates. I don't know how Stripe handles them, but they always resulted in mysteriously missing money in my experience.
      - withinboredom 4y ago
        Sign you business up for something like Wise and take the money in its original form without conversion fees. In my experience, wiring up webhooks + API on wise to automate back to your own currency is less expensive than stripe. YMMV
    - kuschku 4y ago
      Girocard (in person) is 0.25%. GiroPay is 0.09€ per transaction, no matter how large. PayDirekt is 0.35€ per transaction, no matter how large. SEPA Debit is about 0.10€ as well. Why are US-based payment services so fucking expensive?
      - mardifoufs 4y ago
        Debit card transactions are basically free in the US too.
      - blntechie 4y ago
        I assume because the US credit card customers are obsessed with reward points and miles and it need to be paid by someone. It's usually the merchants through high MDR. The merchants pass on the costs to the card customers or debit card/cash payers.
        SeripisChad 4y ago
- username_my1 4y ago
  I genuinely don't understand why anyone would use stripe for any scaled up business compared to adyen for example. stripe has a lot of value for out of the box integration, but if you're running your own custom solution you will need to put the same effort to integrate stripe at a 3x cost compared to adyen. I understand it's a silicon valley thing and most likely those who use it don't get the same public pricing other people get, but aside from branding stripe is extremely expensive compared to comparable solutions. and 4% of your top line is a huge thing to pay
  - dkyc 4y ago
    Is it really though? It very much depends on your definition of 'scaled up'. Sure, you wouldn't run a Fortune 500's payment processing through stripe's public pricing plan. But for a $10M SaaS startup, this would come to $350k/yr (assuming some amount of non-credit-card and non-taxed payments). I would say at least 60% of that you would pay anyway to other payments processors, even doing all the software stack yourself (nothing is free in the world of finance, after all). So that leaves you with $140k p.a. for a software stack that covers billing UI, invoicing, taxes, financial reporting. It's far from obvious how you can come up with a comparable solution yourself with a budget of at most 0.5 developers and 0.5 designers that your $140k would get you.
    - username_my1 4y ago
      Yes 160k extra a year out of 10m is a lot
      - etothepii 4y ago
        That rather depends on gross margin.
      - treewalking 4y ago
        If it costs 1 extra human to build everything you’re losing money leaving Stripe.
        4y ago
- gizmo 4y ago
  > all Stripe services possible (Billing, Payments, Tax, Data Pipeline). Where are the other ~4% supposed to come from? Stripe Radar, Stripe Identity, Stripe Sigma? It all adds up.
  - dkyc 4y ago
    Even including those, I don't see how you would get to 8%. Apart from the fact that 'Stripe Identity' isn't something I'd expect a standard SaaS company to need (or a tool like Lago to provide), the cost simply isn't that high. Radar and Sigma together for 1,000 monthly transactions adds like ~$130 to your monthly bill. I challenge the authors of this blog post to provide me a Stripe product setup that would result in an $8,000 monthly cost for a $100,000 MRR SaaS company. It must be very unusual.
    - sodality2 4y ago
      I pay 15% fees because of a very low subscription fee ($2.50). 2.5 * 0.029 = 0.0725 + 0.3 = 0.3725 / 2.5 = 14.9%
      - tyingq 4y ago
        They also don't refund fees when a customer wants a refund.
      - jessaustin 4y ago
        Have you tried encouraging longer subscriptions through steep discounts?
        sodality2 4y ago
        Yep. I offer a yearly plan for $26. My customers are split almost exactly half and half with monthly and yearly subscribers
        jessaustin 4y ago
- AnhTho_FR 4y ago
  Hi dkyc, OP here. Sorry to read this was your impression, two points: 1/ To prevent such a feeling, we've included this disclaimer at the beginning of the post, (i) to state where we stand vs Stripe, (ii) the source data is Stripe's pricing, happy to share more details about the hypothesis "Disclaimer: This analysis is based on Stripe’s public pricing as of July 21, 2022. Some merchants may be able to negotiate fees or benefit from grandfathered plans. Lago partners with 'Stripe Payments' and can be used as a complement or replacement of 'Stripe Billing'." 2/ I think below comments (to be clear: comments from people completely unrelated to Lago) show how you can reach 4 to 8%. It's also one of the reasons why 'Paddle' is an attractive solution in Europe, it's an all-in-one solution that takes 5-6% on revenue and provides subscription management, payments, invoicing, tax management. Let us know if you need more info, or if you have feedback on what we could have done differently. In any case, I genuinely appreciate that you took the time to comment!
  - dkyc 4y ago
    Thanks for the reply! I just couldn't follow how you end up paying 8% to stripe, save some very non-standard requirements or setup. You can relieve my concerns by telling me the stripe product setup that results in a $100k MRR SaaS company to pay $8k per month to stripe. Might very well be that I'm overlooking something! Otherwise, the "no one knows exactly how much but up to 8%" framing reads like FUD to me.
    - AnhTho_FR 4y ago
      Got it! Will iterate on the article based on your inputs, thanks for the constructive feedback!
      - danielskogly 4y ago
        Just a heads up that "More about our story here." at the very end is a 404: https://www.getlago.com/company/about-us https://www.getlago.com/company/about-us
        4y ago
- chinathrow 4y ago
  If you let Stripe convert e.g. USD (when you charge USD) to your local currency (when you run your account e.g. in EUR), then you pay them another 2% for that convenience. I switched to Wise and pay now an order of magnitude less for that.
  - the_chatman 4y ago
- the_chatman 4y ago
- deegles 4y ago
  It can be up to 30% if they freeze your account for "suspicious activity." This is currently happening to someone I know who's had all of their November sales frozen. They say Stripe might return 70% of the funds... in February. They're trying to reach a human but no luck so far.
  - aliswe 4y ago
    Are you serious? This is very concerning
    - jgust 4y ago
      You either die a hero or live long enough to become Paypal.
      - Spivak 4y ago
        live long enough to understand why Paypal became Paypal.
        steve_adams_86 4y ago
        Is the answer simply money?
        aga98mtl 4y ago
        No, the answer is that credit cards allow chargebacks for up to 180 days. Stripe or Paypal is betting on your honesty by allowing you to withdraw sooner. Stray out of their secret "safe" behavior allowed and they deem the risk too high.
        Alupis 4y ago
        Also... new accounts that experience sudden surges of transactions without well established seasonal patterns and account history are very risky for all processors. The processor has to protect themselves from being used in some sort of Carding-Farm Scheme, has to protect other merchants from the processor being cut off by issuers (for having too many fraudulent transactions/chargebacks), and protect actual Card Holder's from fraud (since the processor/merchant ultimately are responsible for the chargeback). People are always surprised when their new account with a few hundred a day in revenue suddenly surges to thousands a day in a short period, and the processor wants to investigate why... Use the tools freely provided by your processor to protect yourself. Sweep the balance into your business bank account every single day - it's usually automatable and free. There is never a reason to store more than 24 hours of revenue in a processor account... they are not a bank!
- croes 4y ago
  They state that SaaS founders said it's 4-8%. It's not their statement but the SaaS founders >We asked this question to dozens of SaaS founders and none of them was able to provide a precise figure. Answers ranged from 4 to 8% of their revenue.
  - dkyc 4y ago
    Well, for reasons stated I don't believe it was a fair and representative sample then, and that 4% is closer to the upper bound than the lower. Also no idea how "no one was able to give a precise figure" – go into stripe dashboard, open most recent invoice, divide amount paid through payments processed (which are both stated right there on the invoice!) I'm a B2B SaaS founder and paid 2.7% to stripe last month. OP, feel free to update post with new lower bound.
    - pattrn 4y ago
      I'm a B2C SAAS founder and paid 7.1% to Stripe last month.
- pattrn 4y ago
  As a single sample: my SAAS startup pays just over 7% to Stripe.
  - krallja 4y ago
    Good grief, talk to your account rep.
- notatoad 4y ago
  >this calculation dressed up as a 'neutral assessment' on Github seems disingenuous and makes me trust them less agreed. they have a corporate blog on their site, so there's no reason that advertorial content like this couldn't be posted there. posting on github just seems like a dirty trick to add authority to marketing content. and it feels especially dirty because they don't share their own pricing to compare it to.
  - that_guy_iain 4y ago
    Why would GitHub add authority? It only really helps when your target audience is technical. But choosing payment providers is not a technical decision for lots of companies.
    - lcnPylGDnU4H9OF 4y ago
      I might understand the reasoning that it could have reduced authority if hosted on their blog. Their branding makes them more recognizable, which makes them more likely to be noticed as a competitor, which removes neutrality.
    - notatoad 4y ago
      elsewhere in this thread, there's a tweet where OP is bragging about getting three articles onto the front page of HN this week. Whatever this audience is, we are apparently the target.
    - lolinder 4y ago
      Stripe's initial success was largely driven by technical people pushing for it because of how easy their API was. Don't underestimate the impact of technical leadership on decisions like this: > “For us it was quite visceral: these products are not serving the needs of the customers, so let’s build something better,” John Collison argues. “In old-fashioned legacy companies it’s the CFO choosing the payments system. They think all systems are alike, so they just sort the bids from suppliers. But if ... you have a two-person team, both of you writing relatively complex code and solving complex infrastructural problem, you need a simple payments API that – once installed – doesn’t keep changing.” > ... The company grew swiftly, driven largely by word-of-mouth between developers. https://www.wired.co.uk/article/stripe-payments-apple-amazon-facebook https://www.wired.co.uk/article/stripe-payments-apple-amazon...
- MuffinFlavored 4y ago
  > - Particularly B2B SaaS will likely have some % of invoice/bank transfer payment. At what price point? I would imagine anything lower than... $200/mo? $500/mo? isn't worth ACH setup? I could be wrong. Would love to hear relevant experience on what the cutoff is.
- plantain 4y ago
  Forced currency conversion. International fees versus local. Low average charge (so the per tx fee is more significant)
- deleted 4y ago
  [deleted]
OmegaPG 4y ago
We are paying roughly 9% fees to stripe which includes currency conversion charges. So if a customer pays us $100, we are getting $91 to our bank account which is absolutely ridiculous. If anyone looking for next $10B-$100B business idea, work on making the transaction fees to 1% and you can take business from stripe and PayPal immediately. Wise.com is doing this and I hope more such companies work on this.
- deleted 4y ago
  [deleted]
- searchableguy 4y ago
  Does stripe restrict payout currency to INR in India? Can you add a bank account which can handle alternative currency payout and let your bank handle do conversion?
  - merek 4y ago
    I'm not an expert, I think by default they payout in the currency of the country that your business is located in. In not sure about India, but in AU, we have the option to receive USD payouts to USD accounts in Australian banks, so you can avoid Stripe's conversion fees. But now you have USD in an AU bank. What are your options? Convert to AUD at the bank's terrible exchange rate. Or send the money to a US bank (or Wise), paying horrendous international transfer fees. I hope I'm missing something but I don't see this offering from Stripe as being very useful.
    - etothepii 4y ago
      Not sure about wise's offering in AU but CA and UK you could just receive the USD into your AU Wise account and pay basically nothing <.5% for FX when compared to spot.
    - chinathrow 4y ago
      > In not sure about India, but in AU, we have the option to receive USD payouts to USD accounts in Australian banks, so you can avoid Stripe's conversion fees. I tried that, didn't work. I opened a local USD account in my non-US country and tried to add it for payout to Stripe. Stripe only allows (at the time I checked, please correct me if that has changed) US based USD accounts with ACH routing information.
stevehawk 4y ago
I know that I started and shutdown a company through Stripe Atlas a year and a half ago and they're still charging me recurring fees for it. I'm not convinced that Atlas was ever fully thought out on their end and I regret using it.
- lvl102 4y ago
  Yeah Stripe is a joke considering its size. I much rather use Square which is saying a lot because that is also a poorly run company. Fintech space is a big joke. They were selling more fluid payment platforms with less fees/cost to consumers. Instead all-in prices have actually gone up.
  - mschuster91 4y ago
    > Fintech space is a big joke. Almost as if all the "meatspace banking" regulations had their purpose, born out of decades of experience with the many, MANY, M A N Y weird edge cases that crop up sooner or later. Not to say that the meatspace regulations and practices are fine (from an European POV, the fact y'all still use literal paper cheques instead of bank transfers and credit cards instead of direct debit because consumer protection is way easier on CCs), but still... it's amazing none of the fintechs ever really got hit hard by regulation agencies despite the continuous complaints.
- Aeolun 4y ago
  Why are they charging you for something that doesn’t exist? Is it a mistake on their end?
- edwinwee 4y ago
  There’s no charge to use Stripe after the $500 Atlas fee to form a company. What fees are you seeing? If you’ve maintained a presence in Delaware, perhaps you’re still paying for your registered agent? (You can also email me at edwin@stripe.com and we can look into this.)
- mkaic 4y ago
  Fellow Stripe Atlas-er here. I have no experience with corporate anything and started my C Corp because I won the Pioneer Tournament and they said I had to to give them a 1% SAFE to claim my winnings, even though I'd made it clear I did not intend to try to monetize my project at all. The company has literally done zero things since inception except cost me money for my registered agent, Delaware corporation tax, and having to pay someone to file taxes for $0 of income because I am too terrified of the tax legal system to do it myself. If you don't mind me asking, what was your process for dissolving the corporation? I'd love to shut down mine but last time I looked it up I got bogged down in all the legalese about Notices of Dissolution and Board Approval and all that jazz.
anonymouse008 4y ago
So does this effectively mean Apple charges 25.2% in the base case, and potentially teens-low twenties in low price point apps ($10 and below)? PayPal, BrainTree and others seem to also be in this range - so backing out market payment rates, the App Store is not as egregious?
- jbverschoor 4y ago
  Yup. For that 30% you get everything. Payment processing, reports, coverage in all countries, vat handling. But people like to bash Apple. Thy don’t bash other platforms or channels which charge 30% or even more
  - Mystery-Machine 4y ago
    So it's 30% charged by Apple with monopoly and no possibility to use something else vs 8% charged by Stripe. And you can also switch to anything else. Sure, it's more work than Apple, but freedom is also more work than being told what to do and how to live.
    - deleted 4y ago
      [deleted]
    - sasoon 4y ago
      Apple is not just charging for payment processing, you get access to the App Store marketplace with more than billion devices. With Stripe you only get payment processing.
      - jmacd 4y ago
        Stripe payment processing fee is 2.9% + C$0.30 For the other fees discussed in this article, you do get additional capabilities. Distribution is not one of them, but it's not an apples to apples comparison.
    - jbverschoor 4y ago
      But stripe doesn’t give you a distribution channel or any other type of platform to build on. And it doesn’t give me access to x billion people with payment details on file, one double click away, without any fraud
xhevahir 4y ago
Seems like "A Breakdown of Stripe's Pricing" would be a clearer title.
- AnhTho_FR 4y ago
  Probably yes! Will think about this structure for next title, thanks for the feedback!
ryaniscool 4y ago
In the USA, there is a huge payment processing API industry. Stripe is a great company and it has this family of products that work great together but it has lots of competitors that have better pricing and better service. I work in the industry for a payment processor. It's not a silicon valley startup (it's basically run by salespeople) but we have way better pricing and you can get someone on the phone if you have an issue. Reading HN, you might think Stripe is the only option.
- codegeek 4y ago
  Sure but the reason Stripe became Stripe is due to the fact that they have an excellent API and dev experience. Most old school processors are too difficult to setup and manage and have horrendous APIs.e.g: authorize.net Having said that, feel free to share your company becaise I m always open to evaluatin for our company (low 7 figures ARR)
  - jrs235 4y ago
    His email is in his profile.
  - nomilk 4y ago
    > the reason Stripe became Stripe is due to the fact that they have an excellent API and dev experience. That's their reputation, but it doesn't always stack up in reality. Recent example: https://twitter.com/levelsio/status/1600316372344373249 https://twitter.com/levelsio/status/1600316372344373249 Canonical HN example: https://news.ycombinator.com/item?id=30535572 https://news.ycombinator.com/item?id=30535572 The association of Stripe with simplicity and good dev experience could be more due to Stripe's marketing/PR than the views of devs who've used Stripe APIs, at least from the few things I've read.
    - mgkimsal 4y ago
      >The association of Stripe with simplicity and good dev experience could be more due to Stripe's marketing/PR ... I don't think it's marketing/PR so much as a halo effect and reputation from years ago. My experience with stripe 5 years ago was/is simpler and easier than it is looking at it today. More products/services/options/requirements - it's more complicated than it was years ago. But looking at it for a project 5 years ago, it was certainly simpler compared to authorize.net for what my project needed. Just the UI alone to go in and manage/test things was more straightforward and pleasant, even when I hit issues and roadblocks. Authorize.net looked like it hadn't changed much since 2005 or so when I'd looked at it then. May be better now - haven't looked since 2017.
calme_toi 4y ago
Totally agree on diversifying payment solution part. But in terms of pricing, from what I have researched for my SaaS website, Stripe is not bad at all. When it comes to choosing payment solutions, we need to consider the reliability/quality. You might be able to pay x% less fees with other options but 0.2% more of the down time will cost you much more.
poxrud 4y ago
My biggest issue is that they keep all the fees in case of a refund. Sometimes customers just change their mind, and this will cost you. It will cost you a lot if you’re selling high value items.
- solokhind 4y ago
  Same. We're losing thousands of dollars because customers change their mind or made a mistake in their purchase, mostly because we're dealing with high value items.
- lambda_lord 4y ago
  Braintree and Adyden do as well to my understanding. Payment processors are low-margin. It costs interchange fees and scheme fees to reverse a transaction, it’s not free. It’s unfortunate for the businesses that process a lot of returns, but processing fees would go up for everyone if returns were free.
  - poxrud 4y ago
    The payment processors are only charged a tiny fee, not a percentage of the transaction. Up until a few years ago Stripe, Paypal and others had no issues with refunding the entire amount.
gilrain 4y ago
As a retail customer, there are three payment processors which I notice “convert” me into a sale more often purely because I’m confident the process will be fast, safe, convenient, and familiar: Apple Pay, Stripe, and Square. I would have been surprised to learn that they aren’t priced at a premium on the back end, because they certainly feel better and more trustworthy.
- apankrat 4y ago
  As a retail online vendor - PayPal is the fourth. Did an AB test a while back and mere presence of the PayPal option boosts sales through all other options plus generates extra sales through PayPal itself. Not something that I was expecting at all, but the confidence level was over 99%.
  - KingMob 4y ago
    What do you sell? As a techie, I have the opposite reaction to seeing Paypal, and would probably avoid a Paypal-only purchase.
    - apankrat 4y ago
      Backup software.
heipei 4y ago
Been using Stripe for years but now I realise that I don't even know what plan I'm on and can't see what Stripe is charging me. I get a monthly "tax invoice" which includes all charges done through Stripe and comes out at ~ 2.9% of the volume, but I don't see any line items for Billing or anything else. Where do I find this stuff?
- ezekg 4y ago
  Reports > Financial Reports > under "Fees" in the report.
  - heipei 4y ago
    Those are the same numbers as on the tax invoice, and in that section it just says "Fees for all charges, including card charges and other payment methods." Curious if that number already includes charges for things like Subscriptions.
bredren 4y ago
This came up two months ago, the pricing was described as "insidious." [1] I replied that this description could be extended to include how it generated and associated unique customer IDs. The way it is built now-a-days it is trying to be the central key for SaaS user accounts. Effectively: store all your user data with us. I thought it was some kind of oversight but it is most likely about lock in. [1] https://news.ycombinator.com/item?id=33269824 https://news.ycombinator.com/item?id=33269824
- jmacd 4y ago
  I am the original commenter you had replied to. I am actually working on https://tier.run https://tier.run in part to help create a clean separation of interests between billing (and entitlement, and metering, and feature flagging) systems and how you store and access application and user data. With Tier we have `tier whois` [1] which lets you get the Stripe Customer ID based on your own userId. I'd love your feedback if you think there are improvements we could make. 1: https://www.tier.run/docs/cli/whois/ https://www.tier.run/docs/cli/whois/
abuehrle 4y ago
It's funny to observe the tide shift against Stripe on HN in recent years. I think they are a phenomenal, once in a generation company. Their APIs are beautiful (still, even though fewer people agree these days) and the use cases that can be built upon those APIs are endless and amazing. I always felt the pricing was a steal for what the product delivered. Their support, on the other hand :(. ! Maybe it will get better with advances in LLMs, because I'd be shocked if I was ever talking to a human.
smca 4y ago
[I work at Stripe] As a practical matter, this guide is somewhat misleading in the sense that it very substantially overestimates what a typical B2B SaaS business pays for Stripe. For example: • Cards pricing. The guide assumes a B2B SaaS business accepts 100% of payments via cards. B2B SaaS businesses on Stripe tend to encourage payments via bank transfers and other lower-cost payment method, especially for their biggest customers, and we try to make it as easy as possible for businesses to do this. Bank transfers are priced at 0.8% in the US. The guide states that “additional fees apply for bank transfers, additional payment methods”, which is not true. We encourage users to use alternative payment methods for this reason. • Stripe Tax. The 0.5% per transaction cost is incurred only in jurisdictions where the business is obligated to collect taxes. For US-based businesses, this generally represents a very small fraction of total payment volume. (And, of course, the tax collection itself is mandatory, and so some tax provider or calculation engine presumably has to be paid for.) • Stripe Data Pipeline. Including this as a default cost is misleading. It isn’t. While we think it’s a great product (especially if you have a sophisticated ETL pipeline), most Stripe users don’t find themselves needing it. More broadly, I think it’s important for onlookers to know that OP is the founder of a business that runs on Stripe and positions itself as an alternative to Stripe Billing. They seem to be trying to write deliberately-provocative posts to go viral, as described in this tweet: https://twitter.com/byAnhtho/status/1601197512227885056 https://twitter.com/byAnhtho/status/1601197512227885056. Competition is good, and anyone is of course very welcome to analyze Stripe’s pricing. But, in the spirit of transparency, we’d welcome a slightly more realistic analysis.
- mynameisvlad 4y ago
  > For US-based businesses, this generally represents a very small fraction of total payment volume. Didn’t “S Dakota vs Wayfair” require sellers to charge interstate tax regardless of physical presence in the state? I don’t see how it would be a small fraction given that.
  - mperham 4y ago
    Sort of. You need to do a minimum of business in the state, usually $100,000/yr or 200 transactions. I don’t have enough customers in Utah to require tax payments.
tiffanyh 4y ago
Most people also don't understand that with Stripe, you don't actually have your own merchant account (this is why they can setup your account so fast). This can become hugely problematic as your business grows since you're a sub-account of Stripe business, making you beholden to their business practices and costs. My comments aren't intended to sound negative. There's Pro's and Con's to different business models. Getting quick access to the robust tools Stripe offers comes at the cost of you giving up some control over your companies operations.
cutenewt 4y ago
This is really clever marketing by Lago. Good inspiration for other startups.
chasebank 4y ago
When did stripe start charging extra 0.8% for recurring billing? I remember building my first online business with stripe api right when it came out and recurring billing was a feature, not an add on.
- corentin88 4y ago
  In 2018: https://news.ycombinator.com/item?id=16766846 https://news.ycombinator.com/item?id=16766846
imchillyb 4y ago
This is one of the many reasons that banks will remain an institution for a long time to come. Automatic Clearing House (ACH, or Auto debit) comes with a host of consumer protections that are completely lacking from payment processors. I wish legislators would force all payment processors to play by the same book banks have to play by; the same consumer protections.
bastawhiz 4y ago
I used to work at Stripe, specifically on Connect, and I want to point out one thing that's not quite accurate: > and there’s also a transaction fee of $0.25 + 0.25% (in addition to the cost of Stripe Payments and other Stripe products) This is not a per-transaction fee. That implies that the fee is per-payment. This fee is per-payout, which is the ACH credit (or debit rails transfer) to the account holder from their Stripe balance. It's not uncommon for the payout schedule on accounts to be at least weekly, so you have many payments worth of funds batched together into a single payout. The per-payout fee of $0.25 ends up being a lot smaller as a percentage in practice.
deleted 4y ago
[deleted]
noasaservice 4y ago
What I would love is a USPS money solution. Extremely low fees, just works, hooked up with USPS. Fraud would be under bank AND mail fraud. All these companies in this realm are vultures. They add nothing - they just take their cut to do something that should be easy.
waylandsmithers 4y ago
As a developer it's easy to forget how insanely hard it can be to run a business. After all the time, effort, and energy that goes into actually making and selling something, you still have to go through all this additional nonsense just to get the customer's money from their hands into yours.
joshe 4y ago
It does seem that long term Europe should be segregated from the www. For small entities Euro compliance is impossible. Say for Michigan's largest Mustang parts website. Euro's often respond this they would never bother and their targets are big tech, but illegal and not prosecuted is not the same as legal. And it is telling that the law doesn't say "this only applies to corps with more the 100 million in Euro revenue". It applies to all companies and individuals. It should be possible for such a site to "opt out of Europe" and have safe harbor. And there is no way it makes sense for the whole world's web to be regulated by a Euro court. There is no reason for a user in the US to see GDPR banners. Maybe a great firewall to id Europe users, and if you use a vpn to escape it US law doesn't recognize it as valid.
- Sebguer 4y ago
  >There is no reason for a user in the US to see GDPR banners. GDPR is based on citizenship, not location.
edwinwee 4y ago
There is no company (that we're at least aware of) on Stripe that is using this combo of Stripe products and paying the "total cost" outlined in the post. Our pricing scales with the size (and needs) of the business. If a business on Stripe is large enough to use our highest billing tier, quotes, revenue recognition, and data pipeline together, then Stripe would've bundled the products together. (And then we charge for them at the end of the month with a volume-based rate of bundled products + payments.) These products are built for the companies who've asked us for these enterprise features and aren't necessarily meant to be used one-off, as the post implies.
s17n 4y ago
Not exactly on topic but Lago has been killing it when it comes to making the HN front page, nice job.
- AnhTho_FR 4y ago
  Thanks
deleted 4y ago
[deleted]
ryanmccullagh 4y ago
This is a native advertising piece. The author is associated with a Stripe competitor.
okayexplainl4 4y ago
Stripe isn't cheap even on IC++ pricing by time you add the bare minimum basics - Adyen is much cheaper but a much poorer dev experience since they are big Kafka advocates and unfortunately this leaks that you can't even GET a transaction by id - if you didn't listen to event stream and persist this yourself then its back to CSV reporting. TBH, even though it costs us more, I'm happier working with Stripe vs event stream advocates that want to leak this everywhere... (I like Kafka to be fair, just Adyen takes it too far, their implementation their problem, now let me get a transaction from 3 weeks ago over REST)
tacone 4y ago
Because the metodologies are proce

417 points by AnhTho_FR 4y ago

dkyc 4y ago

Working at a company that is currently making this decision, I appreciate the blog post. That being said, I absolutely don't see how they arrive at their numbers. They state that SaaS founders routinely pay "4-8% of revenue" to stripe. Then their own calculation ends up at 4.2% of revenue using a combination of all Stripe services possible (Billing, Payments, Tax, Data Pipeline). Where are the other ~4% supposed to come from? If anything, the calculation is overstating the realistically expected cost in a few ways: - Particularly B2B SaaS will likely have some % of invoice/bank transfer payment. Assuming 100% payment via credit card is a 'worst-case' assessment. - Even given that, the bulk of the cost are credit card processing fees, which you would pay either way. Maybe not exactly at stripe's rate, but something similar. - Stripe Tax for example doesn't charge 0.5% of revenue flat. It only charges for revenue where you’re registered to collect taxes, which for an international business will be far from every transaction (depends on locality & customer base, of course). In addition to that, the pricing drops to 0.4% if you process more than $50k per month. All in all, I appreciate the effort, but given that Lago is a stripe competitor, this calculation dressed up as a 'neutral assessment' on Github seems disingenuous and makes me trust them less.

ecedeno 4y ago
“+33c per transaction” For a B2B SaaS this likely represents a minuscule percentage of the revenue. For a $5/month subscription, this fee alone is more than 6%
- dkyc 4y ago
  You are right, and I see how that would push up the bill as % of revenue. That being said, this has nothing to do with stripe's software platform which this article focuses on, and all to do with credit card payment fees. Braintree charges "2.59% + $.49 per transaction". PayPal charges "3.49% + $.49 per transaction". Square payments charges "2.9% + $.30 per transaction".
  - Dand313 4y ago
    I think they are comparing to MoRs like fastspring or paddle where the % is higher?
  - newaccount74 4y ago
    It's important to consider when you compare with App Stores or resellers that charge a flat fee of 15%-30%. Another important factor that is missing is currency exchange rates. I don't know how Stripe handles them, but they always resulted in mysteriously missing money in my experience.
    - withinboredom 4y ago
      Sign you business up for something like Wise and take the money in its original form without conversion fees. In my experience, wiring up webhooks + API on wise to automate back to your own currency is less expensive than stripe. YMMV
  - kuschku 4y ago
    Girocard (in person) is 0.25%. GiroPay is 0.09€ per transaction, no matter how large. PayDirekt is 0.35€ per transaction, no matter how large. SEPA Debit is about 0.10€ as well. Why are US-based payment services so fucking expensive?
    - mardifoufs 4y ago
      Debit card transactions are basically free in the US too.
    - blntechie 4y ago
      I assume because the US credit card customers are obsessed with reward points and miles and it need to be paid by someone. It's usually the merchants through high MDR. The merchants pass on the costs to the card customers or debit card/cash payers.
      - SeripisChad 4y ago
username_my1 4y ago
I genuinely don't understand why anyone would use stripe for any scaled up business compared to adyen for example. stripe has a lot of value for out of the box integration, but if you're running your own custom solution you will need to put the same effort to integrate stripe at a 3x cost compared to adyen. I understand it's a silicon valley thing and most likely those who use it don't get the same public pricing other people get, but aside from branding stripe is extremely expensive compared to comparable solutions. and 4% of your top line is a huge thing to pay
- dkyc 4y ago
  Is it really though? It very much depends on your definition of 'scaled up'. Sure, you wouldn't run a Fortune 500's payment processing through stripe's public pricing plan. But for a $10M SaaS startup, this would come to $350k/yr (assuming some amount of non-credit-card and non-taxed payments). I would say at least 60% of that you would pay anyway to other payments processors, even doing all the software stack yourself (nothing is free in the world of finance, after all). So that leaves you with $140k p.a. for a software stack that covers billing UI, invoicing, taxes, financial reporting. It's far from obvious how you can come up with a comparable solution yourself with a budget of at most 0.5 developers and 0.5 designers that your $140k would get you.
  - username_my1 4y ago
    Yes 160k extra a year out of 10m is a lot
    - etothepii 4y ago
      That rather depends on gross margin.
    - treewalking 4y ago
      If it costs 1 extra human to build everything you’re losing money leaving Stripe.
      - 4y ago
gizmo 4y ago
> all Stripe services possible (Billing, Payments, Tax, Data Pipeline). Where are the other ~4% supposed to come from? Stripe Radar, Stripe Identity, Stripe Sigma? It all adds up.
- dkyc 4y ago
  Even including those, I don't see how you would get to 8%. Apart from the fact that 'Stripe Identity' isn't something I'd expect a standard SaaS company to need (or a tool like Lago to provide), the cost simply isn't that high. Radar and Sigma together for 1,000 monthly transactions adds like ~$130 to your monthly bill. I challenge the authors of this blog post to provide me a Stripe product setup that would result in an $8,000 monthly cost for a $100,000 MRR SaaS company. It must be very unusual.
  - sodality2 4y ago
    I pay 15% fees because of a very low subscription fee ($2.50). 2.5 * 0.029 = 0.0725 + 0.3 = 0.3725 / 2.5 = 14.9%
    - tyingq 4y ago
      They also don't refund fees when a customer wants a refund.
    - jessaustin 4y ago
      Have you tried encouraging longer subscriptions through steep discounts?
      - sodality2 4y ago
        Yep. I offer a yearly plan for $26. My customers are split almost exactly half and half with monthly and yearly subscribers
        jessaustin 4y ago
AnhTho_FR 4y ago
Hi dkyc, OP here. Sorry to read this was your impression, two points: 1/ To prevent such a feeling, we've included this disclaimer at the beginning of the post, (i) to state where we stand vs Stripe, (ii) the source data is Stripe's pricing, happy to share more details about the hypothesis "Disclaimer: This analysis is based on Stripe’s public pricing as of July 21, 2022. Some merchants may be able to negotiate fees or benefit from grandfathered plans. Lago partners with 'Stripe Payments' and can be used as a complement or replacement of 'Stripe Billing'." 2/ I think below comments (to be clear: comments from people completely unrelated to Lago) show how you can reach 4 to 8%. It's also one of the reasons why 'Paddle' is an attractive solution in Europe, it's an all-in-one solution that takes 5-6% on revenue and provides subscription management, payments, invoicing, tax management. Let us know if you need more info, or if you have feedback on what we could have done differently. In any case, I genuinely appreciate that you took the time to comment!
- dkyc 4y ago
  Thanks for the reply! I just couldn't follow how you end up paying 8% to stripe, save some very non-standard requirements or setup. You can relieve my concerns by telling me the stripe product setup that results in a $100k MRR SaaS company to pay $8k per month to stripe. Might very well be that I'm overlooking something! Otherwise, the "no one knows exactly how much but up to 8%" framing reads like FUD to me.
  - AnhTho_FR 4y ago
    Got it! Will iterate on the article based on your inputs, thanks for the constructive feedback!
    - danielskogly 4y ago
      Just a heads up that "More about our story here." at the very end is a 404: https://www.getlago.com/company/about-us https://www.getlago.com/company/about-us
      - 4y ago
chinathrow 4y ago
If you let Stripe convert e.g. USD (when you charge USD) to your local currency (when you run your account e.g. in EUR), then you pay them another 2% for that convenience. I switched to Wise and pay now an order of magnitude less for that.
- the_chatman 4y ago
the_chatman 4y ago
deegles 4y ago
It can be up to 30% if they freeze your account for "suspicious activity." This is currently happening to someone I know who's had all of their November sales frozen. They say Stripe might return 70% of the funds... in February. They're trying to reach a human but no luck so far.
- aliswe 4y ago
  Are you serious? This is very concerning
  - jgust 4y ago
    You either die a hero or live long enough to become Paypal.
    - Spivak 4y ago
      live long enough to understand why Paypal became Paypal.
      - steve_adams_86 4y ago
        Is the answer simply money?
        aga98mtl 4y ago
        No, the answer is that credit cards allow chargebacks for up to 180 days. Stripe or Paypal is betting on your honesty by allowing you to withdraw sooner. Stray out of their secret "safe" behavior allowed and they deem the risk too high.
        Alupis 4y ago
        Also... new accounts that experience sudden surges of transactions without well established seasonal patterns and account history are very risky for all processors. The processor has to protect themselves from being used in some sort of Carding-Farm Scheme, has to protect other merchants from the processor being cut off by issuers (for having too many fraudulent transactions/chargebacks), and protect actual Card Holder's from fraud (since the processor/merchant ultimately are responsible for the chargeback). People are always surprised when their new account with a few hundred a day in revenue suddenly surges to thousands a day in a short period, and the processor wants to investigate why... Use the tools freely provided by your processor to protect yourself. Sweep the balance into your business bank account every single day - it's usually automatable and free. There is never a reason to store more than 24 hours of revenue in a processor account... they are not a bank!
croes 4y ago
They state that SaaS founders said it's 4-8%. It's not their statement but the SaaS founders >We asked this question to dozens of SaaS founders and none of them was able to provide a precise figure. Answers ranged from 4 to 8% of their revenue.
- dkyc 4y ago
  Well, for reasons stated I don't believe it was a fair and representative sample then, and that 4% is closer to the upper bound than the lower. Also no idea how "no one was able to give a precise figure" – go into stripe dashboard, open most recent invoice, divide amount paid through payments processed (which are both stated right there on the invoice!) I'm a B2B SaaS founder and paid 2.7% to stripe last month. OP, feel free to update post with new lower bound.
  - pattrn 4y ago
    I'm a B2C SAAS founder and paid 7.1% to Stripe last month.
pattrn 4y ago
As a single sample: my SAAS startup pays just over 7% to Stripe.
- krallja 4y ago
  Good grief, talk to your account rep.
notatoad 4y ago
>this calculation dressed up as a 'neutral assessment' on Github seems disingenuous and makes me trust them less agreed. they have a corporate blog on their site, so there's no reason that advertorial content like this couldn't be posted there. posting on github just seems like a dirty trick to add authority to marketing content. and it feels especially dirty because they don't share their own pricing to compare it to.
- that_guy_iain 4y ago
  Why would GitHub add authority? It only really helps when your target audience is technical. But choosing payment providers is not a technical decision for lots of companies.
  - lcnPylGDnU4H9OF 4y ago
    I might understand the reasoning that it could have reduced authority if hosted on their blog. Their branding makes them more recognizable, which makes them more likely to be noticed as a competitor, which removes neutrality.
  - notatoad 4y ago
    elsewhere in this thread, there's a tweet where OP is bragging about getting three articles onto the front page of HN this week. Whatever this audience is, we are apparently the target.
  - lolinder 4y ago
    Stripe's initial success was largely driven by technical people pushing for it because of how easy their API was. Don't underestimate the impact of technical leadership on decisions like this: > “For us it was quite visceral: these products are not serving the needs of the customers, so let’s build something better,” John Collison argues. “In old-fashioned legacy companies it’s the CFO choosing the payments system. They think all systems are alike, so they just sort the bids from suppliers. But if ... you have a two-person team, both of you writing relatively complex code and solving complex infrastructural problem, you need a simple payments API that – once installed – doesn’t keep changing.” > ... The company grew swiftly, driven largely by word-of-mouth between developers. https://www.wired.co.uk/article/stripe-payments-apple-amazon-facebook https://www.wired.co.uk/article/stripe-payments-apple-amazon...
MuffinFlavored 4y ago
> - Particularly B2B SaaS will likely have some % of invoice/bank transfer payment. At what price point? I would imagine anything lower than... $200/mo? $500/mo? isn't worth ACH setup? I could be wrong. Would love to hear relevant experience on what the cutoff is.
plantain 4y ago
Forced currency conversion. International fees versus local. Low average charge (so the per tx fee is more significant)
deleted 4y ago
[deleted]

OmegaPG 4y ago

We are paying roughly 9% fees to stripe which includes currency conversion charges. So if a customer pays us $100, we are getting $91 to our bank account which is absolutely ridiculous. If anyone looking for next $10B-$100B business idea, work on making the transaction fees to 1% and you can take business from stripe and PayPal immediately. Wise.com is doing this and I hope more such companies work on this.

deleted 4y ago
[deleted]
searchableguy 4y ago
Does stripe restrict payout currency to INR in India? Can you add a bank account which can handle alternative currency payout and let your bank handle do conversion?
- merek 4y ago
  I'm not an expert, I think by default they payout in the currency of the country that your business is located in. In not sure about India, but in AU, we have the option to receive USD payouts to USD accounts in Australian banks, so you can avoid Stripe's conversion fees. But now you have USD in an AU bank. What are your options? Convert to AUD at the bank's terrible exchange rate. Or send the money to a US bank (or Wise), paying horrendous international transfer fees. I hope I'm missing something but I don't see this offering from Stripe as being very useful.
  - etothepii 4y ago
    Not sure about wise's offering in AU but CA and UK you could just receive the USD into your AU Wise account and pay basically nothing <.5% for FX when compared to spot.
  - chinathrow 4y ago
    > In not sure about India, but in AU, we have the option to receive USD payouts to USD accounts in Australian banks, so you can avoid Stripe's conversion fees. I tried that, didn't work. I opened a local USD account in my non-US country and tried to add it for payout to Stripe. Stripe only allows (at the time I checked, please correct me if that has changed) US based USD accounts with ACH routing information.

stevehawk 4y ago

I know that I started and shutdown a company through Stripe Atlas a year and a half ago and they're still charging me recurring fees for it. I'm not convinced that Atlas was ever fully thought out on their end and I regret using it.

lvl102 4y ago
Yeah Stripe is a joke considering its size. I much rather use Square which is saying a lot because that is also a poorly run company. Fintech space is a big joke. They were selling more fluid payment platforms with less fees/cost to consumers. Instead all-in prices have actually gone up.
- mschuster91 4y ago
  > Fintech space is a big joke. Almost as if all the "meatspace banking" regulations had their purpose, born out of decades of experience with the many, MANY, M A N Y weird edge cases that crop up sooner or later. Not to say that the meatspace regulations and practices are fine (from an European POV, the fact y'all still use literal paper cheques instead of bank transfers and credit cards instead of direct debit because consumer protection is way easier on CCs), but still... it's amazing none of the fintechs ever really got hit hard by regulation agencies despite the continuous complaints.
Aeolun 4y ago
Why are they charging you for something that doesn’t exist? Is it a mistake on their end?
edwinwee 4y ago
There’s no charge to use Stripe after the $500 Atlas fee to form a company. What fees are you seeing? If you’ve maintained a presence in Delaware, perhaps you’re still paying for your registered agent? (You can also email me at edwin@stripe.com and we can look into this.)
mkaic 4y ago
Fellow Stripe Atlas-er here. I have no experience with corporate anything and started my C Corp because I won the Pioneer Tournament and they said I had to to give them a 1% SAFE to claim my winnings, even though I'd made it clear I did not intend to try to monetize my project at all. The company has literally done zero things since inception except cost me money for my registered agent, Delaware corporation tax, and having to pay someone to file taxes for $0 of income because I am too terrified of the tax legal system to do it myself. If you don't mind me asking, what was your process for dissolving the corporation? I'd love to shut down mine but last time I looked it up I got bogged down in all the legalese about Notices of Dissolution and Board Approval and all that jazz.

anonymouse008 4y ago

So does this effectively mean Apple charges 25.2% in the base case, and potentially teens-low twenties in low price point apps ($10 and below)? PayPal, BrainTree and others seem to also be in this range - so backing out market payment rates, the App Store is not as egregious?

jbverschoor 4y ago
Yup. For that 30% you get everything. Payment processing, reports, coverage in all countries, vat handling. But people like to bash Apple. Thy don’t bash other platforms or channels which charge 30% or even more
- Mystery-Machine 4y ago
  So it's 30% charged by Apple with monopoly and no possibility to use something else vs 8% charged by Stripe. And you can also switch to anything else. Sure, it's more work than Apple, but freedom is also more work than being told what to do and how to live.
  - deleted 4y ago
    [deleted]
  - sasoon 4y ago
    Apple is not just charging for payment processing, you get access to the App Store marketplace with more than billion devices. With Stripe you only get payment processing.
    - jmacd 4y ago
      Stripe payment processing fee is 2.9% + C$0.30 For the other fees discussed in this article, you do get additional capabilities. Distribution is not one of them, but it's not an apples to apples comparison.
  - jbverschoor 4y ago
    But stripe doesn’t give you a distribution channel or any other type of platform to build on. And it doesn’t give me access to x billion people with payment details on file, one double click away, without any fraud

xhevahir 4y ago

Seems like "A Breakdown of Stripe's Pricing" would be a clearer title.

AnhTho_FR 4y ago
Probably yes! Will think about this structure for next title, thanks for the feedback!

ryaniscool 4y ago

In the USA, there is a huge payment processing API industry. Stripe is a great company and it has this family of products that work great together but it has lots of competitors that have better pricing and better service. I work in the industry for a payment processor. It's not a silicon valley startup (it's basically run by salespeople) but we have way better pricing and you can get someone on the phone if you have an issue. Reading HN, you might think Stripe is the only option.

codegeek 4y ago
Sure but the reason Stripe became Stripe is due to the fact that they have an excellent API and dev experience. Most old school processors are too difficult to setup and manage and have horrendous APIs.e.g: authorize.net Having said that, feel free to share your company becaise I m always open to evaluatin for our company (low 7 figures ARR)
- jrs235 4y ago
  His email is in his profile.
- nomilk 4y ago
  > the reason Stripe became Stripe is due to the fact that they have an excellent API and dev experience. That's their reputation, but it doesn't always stack up in reality. Recent example: https://twitter.com/levelsio/status/1600316372344373249 https://twitter.com/levelsio/status/1600316372344373249 Canonical HN example: https://news.ycombinator.com/item?id=30535572 https://news.ycombinator.com/item?id=30535572 The association of Stripe with simplicity and good dev experience could be more due to Stripe's marketing/PR than the views of devs who've used Stripe APIs, at least from the few things I've read.
  - mgkimsal 4y ago
    >The association of Stripe with simplicity and good dev experience could be more due to Stripe's marketing/PR ... I don't think it's marketing/PR so much as a halo effect and reputation from years ago. My experience with stripe 5 years ago was/is simpler and easier than it is looking at it today. More products/services/options/requirements - it's more complicated than it was years ago. But looking at it for a project 5 years ago, it was certainly simpler compared to authorize.net for what my project needed. Just the UI alone to go in and manage/test things was more straightforward and pleasant, even when I hit issues and roadblocks. Authorize.net looked like it hadn't changed much since 2005 or so when I'd looked at it then. May be better now - haven't looked since 2017.

calme_toi 4y ago

Totally agree on diversifying payment solution part. But in terms of pricing, from what I have researched for my SaaS website, Stripe is not bad at all. When it comes to choosing payment solutions, we need to consider the reliability/quality. You might be able to pay x% less fees with other options but 0.2% more of the down time will cost you much more.

poxrud 4y ago

My biggest issue is that they keep all the fees in case of a refund. Sometimes customers just change their mind, and this will cost you. It will cost you a lot if you’re selling high value items.

solokhind 4y ago
Same. We're losing thousands of dollars because customers change their mind or made a mistake in their purchase, mostly because we're dealing with high value items.
lambda_lord 4y ago
Braintree and Adyden do as well to my understanding. Payment processors are low-margin. It costs interchange fees and scheme fees to reverse a transaction, it’s not free. It’s unfortunate for the businesses that process a lot of returns, but processing fees would go up for everyone if returns were free.
- poxrud 4y ago
  The payment processors are only charged a tiny fee, not a percentage of the transaction. Up until a few years ago Stripe, Paypal and others had no issues with refunding the entire amount.

gilrain 4y ago

As a retail customer, there are three payment processors which I notice “convert” me into a sale more often purely because I’m confident the process will be fast, safe, convenient, and familiar: Apple Pay, Stripe, and Square. I would have been surprised to learn that they aren’t priced at a premium on the back end, because they certainly feel better and more trustworthy.

apankrat 4y ago
As a retail online vendor - PayPal is the fourth. Did an AB test a while back and mere presence of the PayPal option boosts sales through all other options plus generates extra sales through PayPal itself. Not something that I was expecting at all, but the confidence level was over 99%.
- KingMob 4y ago
  What do you sell? As a techie, I have the opposite reaction to seeing Paypal, and would probably avoid a Paypal-only purchase.
  - apankrat 4y ago
    Backup software.

heipei 4y ago

Been using Stripe for years but now I realise that I don't even know what plan I'm on and can't see what Stripe is charging me. I get a monthly "tax invoice" which includes all charges done through Stripe and comes out at ~ 2.9% of the volume, but I don't see any line items for Billing or anything else. Where do I find this stuff?

ezekg 4y ago
Reports > Financial Reports > under "Fees" in the report.
- heipei 4y ago
  Those are the same numbers as on the tax invoice, and in that section it just says "Fees for all charges, including card charges and other payment methods." Curious if that number already includes charges for things like Subscriptions.

bredren 4y ago

This came up two months ago, the pricing was described as "insidious." [1] I replied that this description could be extended to include how it generated and associated unique customer IDs. The way it is built now-a-days it is trying to be the central key for SaaS user accounts. Effectively: store all your user data with us. I thought it was some kind of oversight but it is most likely about lock in. [1] https://news.ycombinator.com/item?id=33269824 https://news.ycombinator.com/item?id=33269824

jmacd 4y ago
I am the original commenter you had replied to. I am actually working on https://tier.run https://tier.run in part to help create a clean separation of interests between billing (and entitlement, and metering, and feature flagging) systems and how you store and access application and user data. With Tier we have `tier whois` [1] which lets you get the Stripe Customer ID based on your own userId. I'd love your feedback if you think there are improvements we could make. 1: https://www.tier.run/docs/cli/whois/ https://www.tier.run/docs/cli/whois/

abuehrle 4y ago

It's funny to observe the tide shift against Stripe on HN in recent years. I think they are a phenomenal, once in a generation company. Their APIs are beautiful (still, even though fewer people agree these days) and the use cases that can be built upon those APIs are endless and amazing. I always felt the pricing was a steal for what the product delivered. Their support, on the other hand :(. ! Maybe it will get better with advances in LLMs, because I'd be shocked if I was ever talking to a human.

smca 4y ago

[I work at Stripe] As a practical matter, this guide is somewhat misleading in the sense that it very substantially overestimates what a typical B2B SaaS business pays for Stripe. For example: • Cards pricing. The guide assumes a B2B SaaS business accepts 100% of payments via cards. B2B SaaS businesses on Stripe tend to encourage payments via bank transfers and other lower-cost payment method, especially for their biggest customers, and we try to make it as easy as possible for businesses to do this. Bank transfers are priced at 0.8% in the US. The guide states that “additional fees apply for bank transfers, additional payment methods”, which is not true. We encourage users to use alternative payment methods for this reason. • Stripe Tax. The 0.5% per transaction cost is incurred only in jurisdictions where the business is obligated to collect taxes. For US-based businesses, this generally represents a very small fraction of total payment volume. (And, of course, the tax collection itself is mandatory, and so some tax provider or calculation engine presumably has to be paid for.) • Stripe Data Pipeline. Including this as a default cost is misleading. It isn’t. While we think it’s a great product (especially if you have a sophisticated ETL pipeline), most Stripe users don’t find themselves needing it. More broadly, I think it’s important for onlookers to know that OP is the founder of a business that runs on Stripe and positions itself as an alternative to Stripe Billing. They seem to be trying to write deliberately-provocative posts to go viral, as described in this tweet: https://twitter.com/byAnhtho/status/1601197512227885056 https://twitter.com/byAnhtho/status/1601197512227885056. Competition is good, and anyone is of course very welcome to analyze Stripe’s pricing. But, in the spirit of transparency, we’d welcome a slightly more realistic analysis.

mynameisvlad 4y ago
> For US-based businesses, this generally represents a very small fraction of total payment volume. Didn’t “S Dakota vs Wayfair” require sellers to charge interstate tax regardless of physical presence in the state? I don’t see how it would be a small fraction given that.
- mperham 4y ago
  Sort of. You need to do a minimum of business in the state, usually $100,000/yr or 200 transactions. I don’t have enough customers in Utah to require tax payments.

tiffanyh 4y ago

Most people also don't understand that with Stripe, you don't actually have your own merchant account (this is why they can setup your account so fast). This can become hugely problematic as your business grows since you're a sub-account of Stripe business, making you beholden to their business practices and costs. My comments aren't intended to sound negative. There's Pro's and Con's to different business models. Getting quick access to the robust tools Stripe offers comes at the cost of you giving up some control over your companies operations.

cutenewt 4y ago

This is really clever marketing by Lago. Good inspiration for other startups.

chasebank 4y ago

When did stripe start charging extra 0.8% for recurring billing? I remember building my first online business with stripe api right when it came out and recurring billing was a feature, not an add on.

corentin88 4y ago
In 2018: https://news.ycombinator.com/item?id=16766846 https://news.ycombinator.com/item?id=16766846

imchillyb 4y ago

This is one of the many reasons that banks will remain an institution for a long time to come. Automatic Clearing House (ACH, or Auto debit) comes with a host of consumer protections that are completely lacking from payment processors. I wish legislators would force all payment processors to play by the same book banks have to play by; the same consumer protections.

bastawhiz 4y ago

I used to work at Stripe, specifically on Connect, and I want to point out one thing that's not quite accurate: > and there’s also a transaction fee of $0.25 + 0.25% (in addition to the cost of Stripe Payments and other Stripe products) This is not a per-transaction fee. That implies that the fee is per-payment. This fee is per-payout, which is the ACH credit (or debit rails transfer) to the account holder from their Stripe balance. It's not uncommon for the payout schedule on accounts to be at least weekly, so you have many payments worth of funds batched together into a single payout. The per-payout fee of $0.25 ends up being a lot smaller as a percentage in practice.

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noasaservice 4y ago

What I would love is a USPS money solution. Extremely low fees, just works, hooked up with USPS. Fraud would be under bank AND mail fraud. All these companies in this realm are vultures. They add nothing - they just take their cut to do something that should be easy.

waylandsmithers 4y ago

As a developer it's easy to forget how insanely hard it can be to run a business. After all the time, effort, and energy that goes into actually making and selling something, you still have to go through all this additional nonsense just to get the customer's money from their hands into yours.

joshe 4y ago

It does seem that long term Europe should be segregated from the www. For small entities Euro compliance is impossible. Say for Michigan's largest Mustang parts website. Euro's often respond this they would never bother and their targets are big tech, but illegal and not prosecuted is not the same as legal. And it is telling that the law doesn't say "this only applies to corps with more the 100 million in Euro revenue". It applies to all companies and individuals. It should be possible for such a site to "opt out of Europe" and have safe harbor. And there is no way it makes sense for the whole world's web to be regulated by a Euro court. There is no reason for a user in the US to see GDPR banners. Maybe a great firewall to id Europe users, and if you use a vpn to escape it US law doesn't recognize it as valid.

Sebguer 4y ago
>There is no reason for a user in the US to see GDPR banners. GDPR is based on citizenship, not location.

edwinwee 4y ago

There is no company (that we're at least aware of) on Stripe that is using this combo of Stripe products and paying the "total cost" outlined in the post. Our pricing scales with the size (and needs) of the business. If a business on Stripe is large enough to use our highest billing tier, quotes, revenue recognition, and data pipeline together, then Stripe would've bundled the products together. (And then we charge for them at the end of the month with a volume-based rate of bundled products + payments.) These products are built for the companies who've asked us for these enterprise features and aren't necessarily meant to be used one-off, as the post implies.

s17n 4y ago

Not exactly on topic but Lago has been killing it when it comes to making the HN front page, nice job.

AnhTho_FR 4y ago
Thanks

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ryanmccullagh 4y ago

This is a native advertising piece. The author is associated with a Stripe competitor.

okayexplainl4 4y ago

Stripe isn't cheap even on IC++ pricing by time you add the bare minimum basics - Adyen is much cheaper but a much poorer dev experience since they are big Kafka advocates and unfortunately this leaks that you can't even GET a transaction by id - if you didn't listen to event stream and persist this yourself then its back to CSV reporting. TBH, even though it costs us more, I'm happier working with Stripe vs event stream advocates that want to leak this everywhere... (I like Kafka to be fair, just Adyen takes it too far, their implementation their problem, now let me get a transaction from 3 weeks ago over REST)

tacone 4y ago

Because the metodologies are proce