11 ms·

Your Minimum Viable Product is Processing Credit Cards

fredley 14y ago
Good article, but the last paragraph had me scratching my head. $250 for a YouTube channel subscription that notifies you with an email? If I'd paid $250 for that I'd be pissed off.
- jere 14y ago
  Could be private videos right? As I understood it, he's paying for the content, not the email.
  - mootothemax 14y ago
    Could be private videos right? Even then, what's the issue? Just because something is available free if you search hard enough for it doesn't mean the creator can't or shouldn't charge for it.
    - Ntrails 14y ago
      Because $250 to see some content that is of value to you is reasonable. $250 to get an email telling you that the latest instalment of a series that is available on a public channel is not.
    - lmm 14y ago
      No, but paying - and thinking of it as paying, rather than donating - that much for a service that youtube gives you already for free (at least, I'm amazed if there isn't an option for "email me whenever this channel uploads a new video") would seem... odd.
- mootothemax 14y ago
  Good article, but the last paragraph had me scratching my head. $250 for a YouTube channel subscription that notifies you with an email? If I'd paid $250 for that I'd be pissed off. No, he paid for "a weekly 5 minute video series." Marketing is everything.
- patio11 14y ago
  That's sort of like saying "I'll never pay $250 for a meal." Statistically speaking, you probably will, you're just not currently thinking of a circumstance under which it sounds reasonable, but given the circumstance it will sound very reasonable indeed. (Example: Your wedding dinner. Granted, once you have that context, it isn't just a meal, but once you have the context of this purchase, it presumably isn't "just" a video on Youtube. It's an expectation of direct value, a relationship with the producer, a statement about one's priorities, etc etc.) More broadly: going from "I wouldn't buy that" to "That's commercially nonviable" is one of the classic hacker mistakes. Clearly people buy it, right? You can fail to sell to billions of people and still have a great business.
  - vojant 14y ago
    totally agree
  - thenomad 14y ago
    May not be directly relevant, but - I certainly would spend $250 on a meal. Indeed, the first meal I ever spent that much on - at the Fat Duck in the UK - was one of the best and most memorable single events of my life. Which, I guess, points out another class of "actually reasonable" circumstance - the "no, really, it actually is that good" circumstance. I've heard similar things from people who bought top-end couture - you go in thinking "I can't imagine spending that much" and come out thinking "holy shit, I'm so glad I decided to spend that comparatively small sum of money".
patio11 14y ago
You can even ask for money without having any way of receiving it. This is a good discipline to get into when doing customer development interviews. "So we've established that this is going to save you four hours a month. OK -- it isn't ready for you yet, but it will be soon. It costs $50 a month. Can I get a $50 deposit from you to reserve your spot? We'll apply it against your first month's fee." If you've identified a problem people actually have, they'll crawl over you to give you money. You don't even have to accept it, just watch whether they're actually willing to get out the checkbook or not. (n.b. A lot of software is sold prior to existing at numbers substantially higher than $50. For example, you might hypothetically be building something enterprise-y and looking for your first anchor customer. If you are, the conversation goes something like "OK, will you soft-commit to being our first customer on this? We'll draw up a Letter of Intent which says that, six months from now, after we've got the technology in place, we start implementing a field trial for $YOUR_COMPANY, with successful implementation to be followed by an annual purchase in the six figure region. Does that sound good to you?")
- jasonkester 14y ago
  The recruiting agency that launched here yesterday seemed like a good example of this. Their entire product consisted of two webforms (without even any validation) that would collect contact information. It's entirely possible there was no database behind it, and that it just emailed the founder. The founder would then send out a mail to the addresses in Pile A saying "pay us $25k and we'll forward your details to Pile B using our Top Secret Algorithm". No computers necessary. And genius.
  - patio11 14y ago
    There are a lot of businesses that start out that way. Probably my favorite example is ZeroCater, which -- to my understanding -- was a cell phone, a Googledoc spreadsheet, and a lot of hustle. "Hey YC companies hit me up, I'll order all the sandwiches this Thursday. "Hello Bay Area restaurant, I want to place a $4k order this Thursday and every two weeks for the next six months. Can I talk to your owner? We have some requirements to make this work." "Hey Valley IT company, tell me your dietary restrictions and food magically appears at your office, for the low low price of [guesstimate: $400 / employee / month]." "Hey Valley restaurant, we're really loving the sandwiches. Here's an order for $6,000 and please pay extra special attention to the note about the vegan ones. I know it's a hassle but then again I do order $6,000 of sandwiches at a time so I expect you to deal." In the process you'll discover things about this process which suck, and you can automate or systemize them as business needs/opportunities dictate.
api 14y ago
A little Ask HN that is relevant to this thread: what are peoples' favorite avenues for processing cards these days? Especially for small increments (e.g. a few bucks a month)?
- mootothemax 14y ago
  Especially for small increments (e.g. a few bucks a month)? Kill the problem altogether by charging more. Alternatively, charge annual rates. Whatever you do though, don't try and make a living from services that charge two or three bucks a month.
  - api 14y ago
    Good point. Annual rates are probably good for my idea. But I'm still curious about the state of the art.
    - cschmidt 14y ago
      Well, for non recurring charges Stripe is awesome.
      - AnthonyJoseph 14y ago
        Stripe has a great subscription option fwiw.
        cschmidt 14y ago
        Good to know. I only have non-recurring charges, so I hadn't looked into that.
        icelancer 14y ago
        I will 2nd his recommendation. It works amazingly.
  - Goronmon 14y ago
jasonkester 14y ago
For what it's worth, my most profitable SaaS product launched without the capability of processing credit cards. It launched with a price though. But also with a 30-day Free Trial. The logic being that I could spend all pre-launch time building the actual thing. And then I had 30 days to get that payment processing stuff sorted out. Back then, you almost needed that much time. Today, you need a good hour to get Stripe up and running, so it seems even less of a priority. So yeah, sure, you probably aught to have "makes money" baked in from day one. But if all you have is some Stripe sample code, I don't think I'd consider that a product.
- kmfrk 14y ago
  You can also buy yourself some time and save money on fees by deferring all withdrawals to an end-of-month payment. That's what Apple does with iTunes, and it means they don't have to pay fees on microtransactions like $.99.
  - cstejerean 14y ago
    At least for me Apple certainly doesn't wait until the end of the month, although they do batch small transactions at seemingly random intervals.
    - kmfrk 14y ago
      That sounds right. The monthly interval was pretty arbitrary, but just seemed sensible. Wonder what triggers the withdrawals.
      - run4yourlives 14y ago
        Probably the dollar amount owing by the account.
digitalengineer 14y ago
I almost never use credit cards. In the Netherlands they've got iDEAL http://ideal.nl/?s=&lang=eng-GB http://ideal.nl/?s=&lang=eng-GB (online payment through your own bank). Why use Cedit Cards at all? Then again, I hate living on credit as do most of my countrymen. I am amazed people would lend to buy a new car. If you can't afford it buy a cheaper model or one that's got more miles (or years) on it.
- omni 14y ago
  Not sure how credit cards work in Europe, but in the US, I use credit cards exclusively for the rewards they give out. I get 2% on all of my purchases plus an interest-free 30 day loan until my payment's due. I've never missed a payment and never carried a balance, so at the age of 24 I've made something like $3,000 net off of credit card companies.
  - digitalengineer 14y ago
    I think with "I've never missed a payment and never carried a balance" you're not the tipical joe. I've read some banks can charce excessive rates when people forget (or can't) to pay.
    - amalag 14y ago
      Everyone in my family does this. I also have around $1000 from my 2% back over the last 3 years.
  - jmaskell 14y ago
    I'm not sure about the rest of Europe, but the UK works pretty much like this. Lots of cashback, store vouchers or airline miles. I guess the card companies win either way - in interest on people who rack up debts (enticed by the benefits) and also on transaction fees charged to merchants when the card is used.
  - jpdoctor 14y ago
    > I've never missed a payment and never carried a balance Hilariously, in banker lingo you are referred to as a "deadbeat", without any apparent sense of irony.
programminggeek 14y ago
The idea here is right on. It's like if you build a free app on the app store and you don't have ads or in app purchase. That isn't a MVP, it's a hobby. Things change when you start charging money for what you're doing. A business is likely not a business if they aren't charging someone for something. Instead it might just be an organization that builds things, but for better or worse a business is something that is created to make money. If you don't like that idea, you shouldn't be "in business".
ltcoleman 14y ago
I'm sorry, but this post completely lost me. Are we complaining about credit card processing? Are we talking about when to ask for payment for creative work? What are we talking about?
- rjbond3rd 14y ago
  From the article: > Though, the primary benefit of being able to take money isn’t really about being able to take money. > It’s about seeing your product through your potential customers’ eyes. Who they are? Which aspects of what you’re building are most valuable to them? ...Build that atop your payment processing system.
tesmar2 14y ago
I hear people keep recommending Stripe, but almost everyone I talk to here in Raleigh, NC says that it is way too expensive. Any thoughts? What is the best alternative that happens to be cheaper?
- pc 14y ago
  Most of Stripe's fees go straight to credit card issuers. We wish the underlying costs were lower, and would happily cut our rates if so. Compared to other companies that help you accept credit cards, though, I think that Stripe's prices are very good. The main difference between Stripe and other companies is that 2.9% + 30c is pretty much our only fee. There are no international card surcharges, monthly fees, American Express rates, etc. By design, those details aren't always obvious with other providers.
- euroclydon 14y ago
  2.9% + $0.30/transaction. What are you looking to pay instead?
  - jpdoctor 14y ago
    1% + 0.15/transaction. I have no desire to hand $30K to anyone on $1M for counting money electronically. Currently, we just employ someone to take care of the checks and it is only a fraction of her time. Around $10K it becomes an interesting proposition.
    - pestaa 14y ago
      You seriously underestimate the infrastructure, availability and security implications of `counting money electronically'. Give me $1M and I wouldn't blink at $30K expense.
      - parsnips 14y ago
        If your margin is 10% you would.
    - 14y ago
jpdoctor 14y ago
> If you can’t process credit cards right now – you don’t have a product and you barely have a business. Wow. Should I return a few million dollars to my customers?
ctek 14y ago
I was working on my niche web app, http://www.pageblox.com http://www.pageblox.com for many months and was at times (when feeling overly optimistic) extremely delusional about how much I would make when I turned on payments. The truth is, you have _no idea_ what your conversion rates will be until you actually turn on payment processing. I thought it would be around 2% but in fact was less than .1% Even though I only made $95 my first month (a lot less then what I had hoped) I now have a clear idea of where I stand and what needs to be improved and tweaked. It'll be a slow and at times painful process (SEO, A/B testing, blog posts, re-design, features) to make the profitability worth all the hours put in so far...
- onetwothreefour 14y ago
  What HN fails to tell you is that making money, and turning a profit (big enough to make things worth it) is actually really hard. I wish you all the best in this endeavour.
  - charleshaanel 14y ago
    I couldn't agree. You have put yourself head and shoulders about the 90+% of people who either are to fearful to even try what you did. Congrats.... "Boldness has genius, power and magic in it..." - Goethe
ef4 14y ago
If you want to sell something for $50/year, yes you need to take credit cards. But if you want to sell something for $15,000/year, it's not nearly as important.
- hapless 14y ago
  At $15,000 a year, you have to take PO numbers, have a collections department, and be prepared to be paid 6 months late.
  - jdlshore 14y ago
    This is overly pessimistic. There's two tricks to enterprise sales, at least in my experience. First, have a personal relationship with the buyer. Not the purchasing department--the buyer. By which I mean the person with the authority to tell Purchasing to pay you, not the person or people who are going to use your product. By "personal relationship," I mean direct interactions where you've taken the time to understand what the buyer wants, why they want it, and why they think you can provide it; and where you've demonstrated trustworthiness, an ability to deliver, and interest in the buyer's success. For an early-stage startup, by the way, this is the founders' job, not a "enterprise sales" person or staff. As a founder, you have credibility and the ability to establish that personal relationship that a salesperson cannot match. Second, work through the red tape before you deliver your product or service. If you do this while the buyer is still eager to have what you provide, she'll be motivated to resolve the inevitable roadblocks that appear. If you wait, then she'll be less motivated, and that's where the six-month delays come from. Not from a desire to screw you, but because it's no longer urgent. In some companies, a PO # is sufficient--think of it like a credit card number you can charge against. However, I also like to get a deposit up-front. Once a company has paid you once, the wheels are greased for them to pay you again. I've never had problems collecting on an enterprise invoice when I was paid a deposit. This opinion is based on selling five- and six-figure gigs as a consultant over the last 12 years. I've lost money three times: once when dealing with a small-time shop (but we renegotiated and I kept the deposit and cancelled the rest of the gig); another time when a huge company refused to reimburse me the first-class airfare we had agreed upon (I gave up trying on that one); and a small recent gig for which I waived my normal deposit requirement (and now I regret it). Product sales have differences, I'm sure, but I'm willing to bet that the fundamentals are the same. Have a personal relationship with the buyer, and get them to cut the red tape for you before you deliver. Do this and you'll have the ability to collect far more than $15,000 per year.
dvncan 14y ago
that font is awful.
jabo 14y ago
A pretty popular venture-backed SaaS company didn't have automated payment processing until very recently. If you ask me, if you're dealing with other businesses and your product solves their business need, it really doesn't matter if you don't have a payment system as your MVP.
armandososa 14y ago
That's a problem I have. I always have ideas for this weekend projects that could bring some extra-money but I always get discouraged because, living in México, there's no easy way to process credit card payments. PayPal IPN is everything we have and it kinda sucks.
fallenhitokiri 14y ago
Processing money should be something you consider at some point, but what I am missing is a mention that this is coupled to your target market. In Germany many businesses (assuming you are working on some SaaS / B2B / ...) would look at you like you just talked Klingon if you tell them you only accept credit cards. Sad truths is that most smaller companies do not even think about having credit cards. There is slowly some change, form what I have experienced, mostly due to older CEOs and business owners being replaced by a younger generation but overall credit cards are not as common here as in America. On the other hand I currently looked at some providers for credit card processoring (currently working on a project where it could become necessary). Most of the services seem to require your company to be in America or England, most won't work in Germany. So maybe I skip credit cards for the beginning and chose to go with something else (just hypothetical) - does this mean I do not have a product? Because I only support 5 out of 6 possible payment options? Then there is still the option of in app purchases. For most apps which are "just an app" I believe they will work way better. No need for another service, no separate website or member area, nothing to care about but integrate an existing system which is designed to move money from a customer as fast and easy as possible to you (and a middle man). The author is right that you should think about payment processing while working on a product - but processing credit cards is not the holy grail.
joelg87 14y ago
For the MVP of Buffer, I implemented PayPal (no Stripe back then), but I avoided all the IPN hassles. The IPN is the part that would auto-upgrade people once they paid. The way I did it was to upgrade people manually as soon as I got the email from PayPal that they had paid for the Pro plan. This turned out to be good for a number of reasons: 1. I had no idea how long it'd be before the first person paid, so why optimize that flow? Instead I worked on things which would help me get to the first paying customer. 2. The IPN was the hardest part of PayPal implementation, so it saved me a lot of time to avoid it. The rest of the implementation can even be done with their button implementation and no coding experience. 3. Actually people having a slight delay, and my needing to personally email them, was a great thing. That built a lot of loyalty through the personal contact and those were some insightful conversations.
- hayksaakian 14y ago
  Interesting real world insight.
easymovet 14y ago
This post pushed me to try some of the new processing tools out there. I setup Amazon simple pay with an IPN handler in about 20min. I didn't have an idea for a site so it's just a novelty site :) http://valuedchange.com/ http://valuedchange.com/ I chose amazon over stripe since the micropayment cost is less on amazon (5% + 5c vs 2.9%+30c )
alexpopescu 14y ago
Ask HN: 1. how many of you have actually bought a promised product with a clear deadline? 2. how many of you have actually bought a promised product with no deadline? In my case the answer is 0 for both.

Good article, but the last paragraph had me scratching my head. $250 for a YouTube channel subscription that notifies you with an email? If I'd paid $250 for that I'd be pissed off.

jere 14y ago
Could be private videos right? As I understood it, he's paying for the content, not the email.
- mootothemax 14y ago
  Could be private videos right? Even then, what's the issue? Just because something is available free if you search hard enough for it doesn't mean the creator can't or shouldn't charge for it.
  - Ntrails 14y ago
    Because $250 to see some content that is of value to you is reasonable. $250 to get an email telling you that the latest instalment of a series that is available on a public channel is not.
  - lmm 14y ago
    No, but paying - and thinking of it as paying, rather than donating - that much for a service that youtube gives you already for free (at least, I'm amazed if there isn't an option for "email me whenever this channel uploads a new video") would seem... odd.
mootothemax 14y ago
Good article, but the last paragraph had me scratching my head. $250 for a YouTube channel subscription that notifies you with an email? If I'd paid $250 for that I'd be pissed off. No, he paid for "a weekly 5 minute video series." Marketing is everything.
patio11 14y ago
That's sort of like saying "I'll never pay $250 for a meal." Statistically speaking, you probably will, you're just not currently thinking of a circumstance under which it sounds reasonable, but given the circumstance it will sound very reasonable indeed. (Example: Your wedding dinner. Granted, once you have that context, it isn't just a meal, but once you have the context of this purchase, it presumably isn't "just" a video on Youtube. It's an expectation of direct value, a relationship with the producer, a statement about one's priorities, etc etc.) More broadly: going from "I wouldn't buy that" to "That's commercially nonviable" is one of the classic hacker mistakes. Clearly people buy it, right? You can fail to sell to billions of people and still have a great business.
- vojant 14y ago
  totally agree
- thenomad 14y ago
  May not be directly relevant, but - I certainly would spend $250 on a meal. Indeed, the first meal I ever spent that much on - at the Fat Duck in the UK - was one of the best and most memorable single events of my life. Which, I guess, points out another class of "actually reasonable" circumstance - the "no, really, it actually is that good" circumstance. I've heard similar things from people who bought top-end couture - you go in thinking "I can't imagine spending that much" and come out thinking "holy shit, I'm so glad I decided to spend that comparatively small sum of money".

patio11 14y ago

You can even ask for money without having any way of receiving it. This is a good discipline to get into when doing customer development interviews. "So we've established that this is going to save you four hours a month. OK -- it isn't ready for you yet, but it will be soon. It costs $50 a month. Can I get a $50 deposit from you to reserve your spot? We'll apply it against your first month's fee." If you've identified a problem people actually have, they'll crawl over you to give you money. You don't even have to accept it, just watch whether they're actually willing to get out the checkbook or not. (n.b. A lot of software is sold prior to existing at numbers substantially higher than $50. For example, you might hypothetically be building something enterprise-y and looking for your first anchor customer. If you are, the conversation goes something like "OK, will you soft-commit to being our first customer on this? We'll draw up a Letter of Intent which says that, six months from now, after we've got the technology in place, we start implementing a field trial for $YOUR_COMPANY, with successful implementation to be followed by an annual purchase in the six figure region. Does that sound good to you?")

jasonkester 14y ago
The recruiting agency that launched here yesterday seemed like a good example of this. Their entire product consisted of two webforms (without even any validation) that would collect contact information. It's entirely possible there was no database behind it, and that it just emailed the founder. The founder would then send out a mail to the addresses in Pile A saying "pay us $25k and we'll forward your details to Pile B using our Top Secret Algorithm". No computers necessary. And genius.
- patio11 14y ago
  There are a lot of businesses that start out that way. Probably my favorite example is ZeroCater, which -- to my understanding -- was a cell phone, a Googledoc spreadsheet, and a lot of hustle. "Hey YC companies hit me up, I'll order all the sandwiches this Thursday. "Hello Bay Area restaurant, I want to place a $4k order this Thursday and every two weeks for the next six months. Can I talk to your owner? We have some requirements to make this work." "Hey Valley IT company, tell me your dietary restrictions and food magically appears at your office, for the low low price of [guesstimate: $400 / employee / month]." "Hey Valley restaurant, we're really loving the sandwiches. Here's an order for $6,000 and please pay extra special attention to the note about the vegan ones. I know it's a hassle but then again I do order $6,000 of sandwiches at a time so I expect you to deal." In the process you'll discover things about this process which suck, and you can automate or systemize them as business needs/opportunities dictate.

api 14y ago

A little Ask HN that is relevant to this thread: what are peoples' favorite avenues for processing cards these days? Especially for small increments (e.g. a few bucks a month)?

mootothemax 14y ago
Especially for small increments (e.g. a few bucks a month)? Kill the problem altogether by charging more. Alternatively, charge annual rates. Whatever you do though, don't try and make a living from services that charge two or three bucks a month.
- api 14y ago
  Good point. Annual rates are probably good for my idea. But I'm still curious about the state of the art.
  - cschmidt 14y ago
    Well, for non recurring charges Stripe is awesome.
    - AnthonyJoseph 14y ago
      Stripe has a great subscription option fwiw.
      - cschmidt 14y ago
        Good to know. I only have non-recurring charges, so I hadn't looked into that.
        icelancer 14y ago
        I will 2nd his recommendation. It works amazingly.
- Goronmon 14y ago

jasonkester 14y ago

For what it's worth, my most profitable SaaS product launched without the capability of processing credit cards. It launched with a price though. But also with a 30-day Free Trial. The logic being that I could spend all pre-launch time building the actual thing. And then I had 30 days to get that payment processing stuff sorted out. Back then, you almost needed that much time. Today, you need a good hour to get Stripe up and running, so it seems even less of a priority. So yeah, sure, you probably aught to have "makes money" baked in from day one. But if all you have is some Stripe sample code, I don't think I'd consider that a product.

kmfrk 14y ago
You can also buy yourself some time and save money on fees by deferring all withdrawals to an end-of-month payment. That's what Apple does with iTunes, and it means they don't have to pay fees on microtransactions like $.99.
- cstejerean 14y ago
  At least for me Apple certainly doesn't wait until the end of the month, although they do batch small transactions at seemingly random intervals.
  - kmfrk 14y ago
    That sounds right. The monthly interval was pretty arbitrary, but just seemed sensible. Wonder what triggers the withdrawals.
    - run4yourlives 14y ago
      Probably the dollar amount owing by the account.

digitalengineer 14y ago

I almost never use credit cards. In the Netherlands they've got iDEAL http://ideal.nl/?s=&lang=eng-GB http://ideal.nl/?s=&lang=eng-GB (online payment through your own bank). Why use Cedit Cards at all? Then again, I hate living on credit as do most of my countrymen. I am amazed people would lend to buy a new car. If you can't afford it buy a cheaper model or one that's got more miles (or years) on it.

omni 14y ago
Not sure how credit cards work in Europe, but in the US, I use credit cards exclusively for the rewards they give out. I get 2% on all of my purchases plus an interest-free 30 day loan until my payment's due. I've never missed a payment and never carried a balance, so at the age of 24 I've made something like $3,000 net off of credit card companies.
- digitalengineer 14y ago
  I think with "I've never missed a payment and never carried a balance" you're not the tipical joe. I've read some banks can charce excessive rates when people forget (or can't) to pay.
  - amalag 14y ago
    Everyone in my family does this. I also have around $1000 from my 2% back over the last 3 years.
- jmaskell 14y ago
  I'm not sure about the rest of Europe, but the UK works pretty much like this. Lots of cashback, store vouchers or airline miles. I guess the card companies win either way - in interest on people who rack up debts (enticed by the benefits) and also on transaction fees charged to merchants when the card is used.
- jpdoctor 14y ago
  > I've never missed a payment and never carried a balance Hilariously, in banker lingo you are referred to as a "deadbeat", without any apparent sense of irony.

programminggeek 14y ago

The idea here is right on. It's like if you build a free app on the app store and you don't have ads or in app purchase. That isn't a MVP, it's a hobby. Things change when you start charging money for what you're doing. A business is likely not a business if they aren't charging someone for something. Instead it might just be an organization that builds things, but for better or worse a business is something that is created to make money. If you don't like that idea, you shouldn't be "in business".

ltcoleman 14y ago

I'm sorry, but this post completely lost me. Are we complaining about credit card processing? Are we talking about when to ask for payment for creative work? What are we talking about?

rjbond3rd 14y ago
From the article: > Though, the primary benefit of being able to take money isn’t really about being able to take money. > It’s about seeing your product through your potential customers’ eyes. Who they are? Which aspects of what you’re building are most valuable to them? ...Build that atop your payment processing system.

tesmar2 14y ago

I hear people keep recommending Stripe, but almost everyone I talk to here in Raleigh, NC says that it is way too expensive. Any thoughts? What is the best alternative that happens to be cheaper?

pc 14y ago
Most of Stripe's fees go straight to credit card issuers. We wish the underlying costs were lower, and would happily cut our rates if so. Compared to other companies that help you accept credit cards, though, I think that Stripe's prices are very good. The main difference between Stripe and other companies is that 2.9% + 30c is pretty much our only fee. There are no international card surcharges, monthly fees, American Express rates, etc. By design, those details aren't always obvious with other providers.
euroclydon 14y ago
2.9% + $0.30/transaction. What are you looking to pay instead?
- jpdoctor 14y ago
  1% + 0.15/transaction. I have no desire to hand $30K to anyone on $1M for counting money electronically. Currently, we just employ someone to take care of the checks and it is only a fraction of her time. Around $10K it becomes an interesting proposition.
  - pestaa 14y ago
    You seriously underestimate the infrastructure, availability and security implications of `counting money electronically'. Give me $1M and I wouldn't blink at $30K expense.
    - parsnips 14y ago
      If your margin is 10% you would.
  - 14y ago

jpdoctor 14y ago

> If you can’t process credit cards right now – you don’t have a product and you barely have a business. Wow. Should I return a few million dollars to my customers?

ctek 14y ago

I was working on my niche web app, http://www.pageblox.com http://www.pageblox.com for many months and was at times (when feeling overly optimistic) extremely delusional about how much I would make when I turned on payments. The truth is, you have _no idea_ what your conversion rates will be until you actually turn on payment processing. I thought it would be around 2% but in fact was less than .1% Even though I only made $95 my first month (a lot less then what I had hoped) I now have a clear idea of where I stand and what needs to be improved and tweaked. It'll be a slow and at times painful process (SEO, A/B testing, blog posts, re-design, features) to make the profitability worth all the hours put in so far...

onetwothreefour 14y ago
What HN fails to tell you is that making money, and turning a profit (big enough to make things worth it) is actually really hard. I wish you all the best in this endeavour.
- charleshaanel 14y ago
  I couldn't agree. You have put yourself head and shoulders about the 90+% of people who either are to fearful to even try what you did. Congrats.... "Boldness has genius, power and magic in it..." - Goethe

ef4 14y ago

If you want to sell something for $50/year, yes you need to take credit cards. But if you want to sell something for $15,000/year, it's not nearly as important.

hapless 14y ago
At $15,000 a year, you have to take PO numbers, have a collections department, and be prepared to be paid 6 months late.
- jdlshore 14y ago
  This is overly pessimistic. There's two tricks to enterprise sales, at least in my experience. First, have a personal relationship with the buyer. Not the purchasing department--the buyer. By which I mean the person with the authority to tell Purchasing to pay you, not the person or people who are going to use your product. By "personal relationship," I mean direct interactions where you've taken the time to understand what the buyer wants, why they want it, and why they think you can provide it; and where you've demonstrated trustworthiness, an ability to deliver, and interest in the buyer's success. For an early-stage startup, by the way, this is the founders' job, not a "enterprise sales" person or staff. As a founder, you have credibility and the ability to establish that personal relationship that a salesperson cannot match. Second, work through the red tape before you deliver your product or service. If you do this while the buyer is still eager to have what you provide, she'll be motivated to resolve the inevitable roadblocks that appear. If you wait, then she'll be less motivated, and that's where the six-month delays come from. Not from a desire to screw you, but because it's no longer urgent. In some companies, a PO # is sufficient--think of it like a credit card number you can charge against. However, I also like to get a deposit up-front. Once a company has paid you once, the wheels are greased for them to pay you again. I've never had problems collecting on an enterprise invoice when I was paid a deposit. This opinion is based on selling five- and six-figure gigs as a consultant over the last 12 years. I've lost money three times: once when dealing with a small-time shop (but we renegotiated and I kept the deposit and cancelled the rest of the gig); another time when a huge company refused to reimburse me the first-class airfare we had agreed upon (I gave up trying on that one); and a small recent gig for which I waived my normal deposit requirement (and now I regret it). Product sales have differences, I'm sure, but I'm willing to bet that the fundamentals are the same. Have a personal relationship with the buyer, and get them to cut the red tape for you before you deliver. Do this and you'll have the ability to collect far more than $15,000 per year.

dvncan 14y ago

that font is awful.

jabo 14y ago

A pretty popular venture-backed SaaS company didn't have automated payment processing until very recently. If you ask me, if you're dealing with other businesses and your product solves their business need, it really doesn't matter if you don't have a payment system as your MVP.

armandososa 14y ago

That's a problem I have. I always have ideas for this weekend projects that could bring some extra-money but I always get discouraged because, living in México, there's no easy way to process credit card payments. PayPal IPN is everything we have and it kinda sucks.

fallenhitokiri 14y ago

Processing money should be something you consider at some point, but what I am missing is a mention that this is coupled to your target market. In Germany many businesses (assuming you are working on some SaaS / B2B / ...) would look at you like you just talked Klingon if you tell them you only accept credit cards. Sad truths is that most smaller companies do not even think about having credit cards. There is slowly some change, form what I have experienced, mostly due to older CEOs and business owners being replaced by a younger generation but overall credit cards are not as common here as in America. On the other hand I currently looked at some providers for credit card processoring (currently working on a project where it could become necessary). Most of the services seem to require your company to be in America or England, most won't work in Germany. So maybe I skip credit cards for the beginning and chose to go with something else (just hypothetical) - does this mean I do not have a product? Because I only support 5 out of 6 possible payment options? Then there is still the option of in app purchases. For most apps which are "just an app" I believe they will work way better. No need for another service, no separate website or member area, nothing to care about but integrate an existing system which is designed to move money from a customer as fast and easy as possible to you (and a middle man). The author is right that you should think about payment processing while working on a product - but processing credit cards is not the holy grail.

joelg87 14y ago

For the MVP of Buffer, I implemented PayPal (no Stripe back then), but I avoided all the IPN hassles. The IPN is the part that would auto-upgrade people once they paid. The way I did it was to upgrade people manually as soon as I got the email from PayPal that they had paid for the Pro plan. This turned out to be good for a number of reasons: 1. I had no idea how long it'd be before the first person paid, so why optimize that flow? Instead I worked on things which would help me get to the first paying customer. 2. The IPN was the hardest part of PayPal implementation, so it saved me a lot of time to avoid it. The rest of the implementation can even be done with their button implementation and no coding experience. 3. Actually people having a slight delay, and my needing to personally email them, was a great thing. That built a lot of loyalty through the personal contact and those were some insightful conversations.

hayksaakian 14y ago
Interesting real world insight.

easymovet 14y ago

This post pushed me to try some of the new processing tools out there. I setup Amazon simple pay with an IPN handler in about 20min. I didn't have an idea for a site so it's just a novelty site :) http://valuedchange.com/ http://valuedchange.com/ I chose amazon over stripe since the micropayment cost is less on amazon (5% + 5c vs 2.9%+30c )

alexpopescu 14y ago

Ask HN: 1. how many of you have actually bought a promised product with a clear deadline? 2. how many of you have actually bought a promised product with no deadline? In my case the answer is 0 for both.