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Seeking Insight: Plaid vs. Stripe-Empowering Freelancers for Financial Stability

2 points by lawaga 3y ago

Hey there, amazing HN community! I'm in the midst of building a freelancer growth platform with a mission to help freelancers achieve financial stability. Payments are the foundation of this endeavor, and if that were my only focus, Stripe would be a no-brainer. But here's the catch. My initial research with small businesses reveals that they prefer paying freelancers through bank transfers or even checks, rather than using credit cards. And Plaid seems to have a better handle on that. When it comes to the nitty-gritty of managing finances—moving money between income, safety nets, payouts, tax payments, and retrieving transaction history for deductible expenses—Plaid feels like a better fit, especially since I'm targeting US transactions initially. But wait! Stripe has a service that's somewhat similar to Plaid's, although it's been around for about a year now and I couldn't find much feedback about it. To make this decision wisely, I need your insights, fellow founders, tech gurus, and anyone who's been in my shoes. Here are a few questions to guide our discussion: 1. When it comes to enabling online payments for freelancers as the starting point, is Stripe such an obviuos option that I shouldn't even consider Plaid? What factors would influence your choice? Maybe both, but in different steps? 2. If you've integrated Stripe or Plaid into similar platforms, I'd love to hear about your experiences. How was the integration process in terms of ease, reliability, and customer support? I've heard Plaid's support in basically.... non-existent :S 3. Based on your experience, do small businesses generally prefer bank transfers for paying freelancers? If so, does that make Plaid a more favorable choice for my platform? 4. Looking ahead, which platform offers better scalability and access to transaction data for tax deductions? How do Plaid and Stripe stack up against each other? Are there any other options I should consider? I was also exploring Abound, but they deprecated the freelance tax API. Your guidance, personal experiences, and industry expertise are priceless in helping me make an informed decision that empowers freelancers with robust online payment capabilities and comprehensive financial management support. Thanks a million for your invaluable input! Laura Warjan Gigflow Founder https://www.gigflow.co/

phoenixy1 3y ago
I know I'm biased since, um, I do customer support for Plaid (sort of), but I think Plaid's customer support is pretty good, actually? It's all in-house, the agents are all technical and it's rare that they give a wrong answer, and I see them going the extra mile all the time to solve stuff for customers. The main cases where I've seen people get annoyed at support are when the issue is on the engineering side (or, more commonly, the bank side) and support can't really do anything about it. Sorry, I just had to chime in there since support never gets enough credit. To some of the rest of your questions -- IMO, Plaid and Stripe both have pretty good developer experiences and are fairly easy to integrate with. I can't say much about Stripe's product offerings as I'm not an expert there. It also doesn't have to be one or the other -- you can use Plaid and Stripe in the same app for different use cases, and there's even an active Plaid / Stripe partnership.
mbarrerop 3y ago
Hello Laura. I am not an expert in payment platforms, however you have to take into account if what you want is a payment processor or a connection manager for payments on the financial accounts of your clients. I recommend that, according to your objective, you carry out a gap analysis. I share valuable information about the advantages and disadvantages of the two platforms. https://thedigitalmerchant.com/digital-payments/plaid-vs-stripe/ https://thedigitalmerchant.com/digital-payments/plaid-vs-str...
- lawaga 3y ago
  Thanks! Valuable resource :) - it seems like I should unpack my old consulting toolbox and get to a deeper gap analysis yeah
gregjor 3y ago
US companies of all sizes generally pay by check, direct bank deposit (ACH), or wire transfer. They almost never pay with credit cards. Freelancers, and by extension any intermediary billing and collecting payment for freelancers, have to accommodate the customer and their payable process. Don’t introduce friction or force the customer to use a specific payment method or platform. I have freelanced for US companies for 15 years. I accept payment by paper check, direct bank deposit (ACH), wire transfer to my bank, Transferwise, and PayPal (for credit cards). I add PayPal’s fee to mine, but almost no customer pays with card anyway. Since 2014 I have worked through an agency that bills for me, I believe they have the same payment options I listed and then pay me by bank deposit. Stripe or Plaid may seem easier in technical or process terms, but when it comes to getting customers to pay you have to optimize for zero hassle with their payables system, not for yourself or an online platform.
- lawaga 3y ago
  Very good points and I appreciate you sharing your experience if it would be possible for you to share the name of the agency it would be great. Do you know if they offer anything like a net90 to your customers but you get your money sooner? Are you a contractor for the agencies or an hourly? Asking about the hourly because every freelancer I’ve spoke with admitted that if there was something that would make them come back to be employees would be the steady paycheck and the colleagues… and I think there’s a way to have freelancers as hourly, manage payroll, offer benefits, bill clients and offer freelancers the possibility of withdrawing money as reporting billed hours… but still on early concept
  - gregjor 3y ago
    10X Management represents me. I write my own opinions, I don't speak for them. Net 90 seems way too long. When I freelanced solo I specified net 15, expected my customers to read that as net 30. Various solutions address the cash flow and slow pay/no pay problem such as up-front deposits and escrow. I prefer retainer arrangements rather than hourly or fixed-fee, but not every customer will do that, and it doesn't suit every project. Freelancers and their customers should avoid getting into the situation where one side owes the other a lot of money, or time/work. Breaking the project down into small, measurable tasks with clear deliverables and prices prevents conflict at the end of the project, when problems surface. One of the big players in the contracting agency business is Toptal. You might want to see how they handle the details. I have never worked for/through them but I know several people who have.

2 points by lawaga 3y ago

phoenixy1 3y ago

I know I'm biased since, um, I do customer support for Plaid (sort of), but I think Plaid's customer support is pretty good, actually? It's all in-house, the agents are all technical and it's rare that they give a wrong answer, and I see them going the extra mile all the time to solve stuff for customers. The main cases where I've seen people get annoyed at support are when the issue is on the engineering side (or, more commonly, the bank side) and support can't really do anything about it. Sorry, I just had to chime in there since support never gets enough credit. To some of the rest of your questions -- IMO, Plaid and Stripe both have pretty good developer experiences and are fairly easy to integrate with. I can't say much about Stripe's product offerings as I'm not an expert there. It also doesn't have to be one or the other -- you can use Plaid and Stripe in the same app for different use cases, and there's even an active Plaid / Stripe partnership.

mbarrerop 3y ago

Hello Laura. I am not an expert in payment platforms, however you have to take into account if what you want is a payment processor or a connection manager for payments on the financial accounts of your clients. I recommend that, according to your objective, you carry out a gap analysis. I share valuable information about the advantages and disadvantages of the two platforms. https://thedigitalmerchant.com/digital-payments/plaid-vs-stripe/ https://thedigitalmerchant.com/digital-payments/plaid-vs-str...

lawaga 3y ago
Thanks! Valuable resource :) - it seems like I should unpack my old consulting toolbox and get to a deeper gap analysis yeah

gregjor 3y ago

US companies of all sizes generally pay by check, direct bank deposit (ACH), or wire transfer. They almost never pay with credit cards. Freelancers, and by extension any intermediary billing and collecting payment for freelancers, have to accommodate the customer and their payable process. Don’t introduce friction or force the customer to use a specific payment method or platform. I have freelanced for US companies for 15 years. I accept payment by paper check, direct bank deposit (ACH), wire transfer to my bank, Transferwise, and PayPal (for credit cards). I add PayPal’s fee to mine, but almost no customer pays with card anyway. Since 2014 I have worked through an agency that bills for me, I believe they have the same payment options I listed and then pay me by bank deposit. Stripe or Plaid may seem easier in technical or process terms, but when it comes to getting customers to pay you have to optimize for zero hassle with their payables system, not for yourself or an online platform.

lawaga 3y ago
Very good points and I appreciate you sharing your experience if it would be possible for you to share the name of the agency it would be great. Do you know if they offer anything like a net90 to your customers but you get your money sooner? Are you a contractor for the agencies or an hourly? Asking about the hourly because every freelancer I’ve spoke with admitted that if there was something that would make them come back to be employees would be the steady paycheck and the colleagues… and I think there’s a way to have freelancers as hourly, manage payroll, offer benefits, bill clients and offer freelancers the possibility of withdrawing money as reporting billed hours… but still on early concept
- gregjor 3y ago
  10X Management represents me. I write my own opinions, I don't speak for them. Net 90 seems way too long. When I freelanced solo I specified net 15, expected my customers to read that as net 30. Various solutions address the cash flow and slow pay/no pay problem such as up-front deposits and escrow. I prefer retainer arrangements rather than hourly or fixed-fee, but not every customer will do that, and it doesn't suit every project. Freelancers and their customers should avoid getting into the situation where one side owes the other a lot of money, or time/work. Breaking the project down into small, measurable tasks with clear deliverables and prices prevents conflict at the end of the project, when problems surface. One of the big players in the contracting agency business is Toptal. You might want to see how they handle the details. I have never worked for/through them but I know several people who have.