5 ms·

Balanced Makes Volume Pricing Public

85 points by zende 13y ago

dnfriedman 13y ago
This is actually one of the very few things that has bothered me about Stripe – they don't make their volume pricing public (Amazon does, now Balanced does). We've had to email when we hit larger sums to get pricing reduced. Edit: although to be fair, I asked them about this, and they said their processing costs vary user to user, so they don't have a simple matrix (rather, they apply discounts based on the costs associated with an account). That's probably the best possible answer short of a pricing matrix...
- pc 13y ago
  Right; we've gone back-and-forth on how best to implement our volume pricing. The upside of a clear pricing matrix is that it's clear. The downside is that it's conservative -- we can (and do) give lower pricing than what we could commit to in a matrix like this to many users. Perhaps we should release a matrix of what we do on average (or a set of minimum discounts) or something. (As ever, feel free to drop me a line to discuss -- patrick@stripe.com.)
  - zende 13y ago
    +1 for openness
    - https403 13y ago
      how about pricing for debit cards?
      - jareau 13y ago
        (I'm a Balanced employee) Sorry if this isn't clear. We don't have separate pricing for credit vs. debit cards. These rates are blended for all card types.
  - cperciva 13y ago
    we can (and do) give lower pricing than what we could commit to in a matrix like this to many users. Can you elaborate on this? What factors influence what rates you can (and do) give? Chargeback rate? Mix of card types? Type of product or service being sold? Perhaps we should release a matrix of what we do on average I think that would be great -- even better if it's combined with a list of situations which would result in the rates being higher or lower than the norm.
    - cristinacordova 13y ago
      (I work at Stripe) The biggest factor in processor costs is actually the card mix, and not the volume that a business generates. To give you some sense, international, AmEx and corporate rewards cards tend to be much more expensive to process. Debit cards, on the other hand, tend to be fairly inexpensive to process for (although, despite the costs mentioned elsewhere in the thread, not all debit cards qualify for Durbin debit rates). Balanced's pricing matrix only takes one factor (volume) into account. So, for example, if a business accepts a high percentage of debit cards, we can offer a significantly lower rate than the prices in Balanced's matrix.
      - zende 13y ago
        What happens if a customer's card mix changes?
        cristinacordova 13y ago
        Generally, we hold to the offered rate even in the case that the card mix changes and becomes more expensive. In the case that the card mix becomes less expensive, we'll decrease the rate as our costs have changed and we can offer a better price. Our pricing is always based on the costs of the transactions, rather than volume alone. There are downsides to focusing rates and adjusting them on volume alone. With the Balanced pricing matrix, if a merchant has a mediocre Q3 in volume, their pricing could increase for the highest volume quarter (Q4), even if Balanced's effective cost per transaction hasn't changed at all.
  - dnfriedman 13y ago
    That makes sense – the main thing that bothered me actually is that I didn't (and still don't) know when to ask for discounts. Even if you said discounts vary, but we'll look automatically look at what we can offer when you hit the following sums... that would be great.
    - jareau 13y ago
      We had the same issue with our banking partners. Their pricing schemes are very opaque and we didn't know when we should approach them. We, and you, have better things to do than polling a bank/payments provider asking for discounts. The not knowing is part of the problem.
      - colechristensen 13y ago
        It probably can't hurt (or take more than 15 minutes) to periodically shoot an email and ask.
        jareau 13y ago
        True. But we just love the experience of getting emails from AWS telling us we're paying too much and what we can do to bring costs down. Balanced is striving toward that level of transparency and customer focus.
rasengan 13y ago
Bravo to transparency. Isn't this expensive though?
- mcorrand 13y ago
  It's the same pricing as all their competitors if I recall correctly.
- steveklabnik 13y ago
  Balanced employee here. You can compare yourself: * http://blog.balancedpayments.com/volume-pricing/ http://blog.balancedpayments.com/volume-pricing/ * https://stripe.com/us/pricing https://stripe.com/us/pricing * https://www.braintreepayments.com/faq https://www.braintreepayments.com/faq control-f pricing TL;DR: Everyone has 2.9% + 30¢ on their page, Stripe mentions to email them for a discount if you're doing over $1MM/year.
- throwaway85723 13y ago
  Uh...no. In fact, 1.9% is probably way less than their costs (ie, unsustainable).
  - zende 13y ago
    It's not.
  - deleted 13y ago
    [deleted]
- dangrossman 13y ago
  PayPal's volume pricing has always been public as well: $0 - $3,000/month 2.9% + $0.30 $3,000 - $10,000 2.5% + $0.30 $10,000 - $100,000 2.2% + $0.30 $100,000+ 1.9% or less, requires calling sales Nonprofits automatically get 2.2% with no minimum volume, and in-person transaction with a PayPal Here dongle on your phone/tablet automatically get 2.7% flat with no minimum volume. https://www.paypal.com/webapps/mpp/merchant-fees https://www.paypal.com/webapps/mpp/merchant-fees
mcorrand 13y ago
I'm sorry if this is stated somewhere but I have not seen it anywhere. How are these thresholds calculated? Is this per store/merchant account or for the whole marketplace?
- jareau 13y ago
  (I'm a Balanced employee) We calculate these fees per marketplace. Usually a single marketplace has many merchants associated with it.
  - mcorrand 13y ago
    Thank you! This is pretty nice then, I think when I first stumbled upon the pricing page a while ago, these reduced rates were already public. At the time I just assumed it was counted by store and got back to work. I still chose Balanced for the native marketplace support and general "openness" feel I get from the company.
harrisreynolds 13y ago
Cool. So this is essentially per marketplace? I've just launched simplegym.co that uses Balanced for handling payments. We currently are only doing around $10K/month in payments, but I believe it could grow into the discounted volume over the next few months.
- jareau 13y ago
  Thanks for using Balanced. Yes, this is per marketplace. We'd love to give you a discount. Our discounts are applied quarterly, so if you get to $100K+ by April 1, we'd be happy to drop your rate to 2.7% + 30¢ More here: https://www.balancedpayments.com/pricing https://www.balancedpayments.com/pricing
johnnyg 13y ago
Does this flat rate include AMEX transactions?
- jareau 13y ago
  yes.
abalone 13y ago
And to further the transparency, Visa & Mastercard also publish their interchange fees, which is the main cost for a processor like Balanced. Here's Visa's: http://usa.visa.com/download/merchants/visa-usa-interchange-reimbursement-fees-april2013.pdf http://usa.visa.com/download/merchants/visa-usa-interchange-... For online the fee program is usually "e-Commerce Basic". So here's Balanced's interchange costs, for Visa: Major debit cards[1]: 0.05% + $0.21 Unregulated debit cards (small banks): 1.65% + $0.15 Non-rewards credit cards: 1.8% + $0.10 Rewards credit cards: 1.95% + $0.10 Visa Signature Preferred (highest-end Visa cards): 2.4% + $0.10 Mastercard is usually similar. AmEx is usually more expensive. ----------- [1] This 0.05%/$0.21 rate is super interesting to note. The Durbin amendment was recently passed and regulates most debit card interchange down to practically nothing. This basically just happened and is potentially a huge profit center for processors who haven't updated their fees to reflect it. My guess is processors are right now all looking at each other and waiting to see who breaks rank.. but for the moment, merchants are not necessarily seeing the benefit. Processors are.
- jareau 13y ago
  This is really good insight abalone. Thanks for sharing.
- deleted 13y ago
  [deleted]
- dangrossman 13y ago
  This is one of the advantages to having a real merchant account instead of using a 3rd-party processor like Balanced/PayPal/Stripe. I pay interchange + 0.04% for all cards, so when someone pays me with debit, I'm charged 0.09% and not 2.9%. Several thousand dollars a month of my subscription payments are from debit/check cards; it adds up.
- zende 13y ago
  This is dead on. Here's a few other things to keep in mind: 1. A Durbin Regulated Debit Card include any bank that has over $10B in deposits. That's most debits cards by volume. 2. We've been lucky in being able to negotiate with our processing banks (also called acquiring bank) to receive very favorable rates to pass on those savings. You have to factor in this cost in addition to the interchange defined by the card brands. 3. Amex is more expensive than most other cards, but Amex is also the only card brand that will negotiate on their interchange based on volume and other factors. abalone: thanks for writing this up. It's a more detailed answer to https://news.ycombinator.com/item?id=7033534 https://news.ycombinator.com/item?id=7033534
deleted 13y ago
[deleted]
TomBeckman 13y ago
I've been dealing with credit card merchant accounts for our company for many years. The lack of transparency in the industry made it impossible to know if I was getting the best rates possible. Then I found http://www.cardfellow.com http://www.cardfellow.com where major providers compete for your business. All bids are cost plus based, so you can do a real comparison of the bids. Rates are locked in for life. You can keep the gateway that you're currently using. I ended up with a different division of the same provider I was using, but at a much lower rate. This reduced my net merchant account cost by 3 percentage points. Give it a try. There's no cost. And I have no connection to CardFellow other than that of a very happy customer.
MyNameIsMK 13y ago
I am really trying to integrate balanced into my software but I am just getting stuck. A few video tutorials or a live workshop/meetup/hack day would really help!
- zende 13y ago
  MyNameIsMK: We'd be happy to help. We're online right now for chat on #balanced on irc.freenode.net, which you can join online by going to http://webchat.freenode.net/?channels=balanced&uio=MTE9OTIaf http://webchat.freenode.net/?channels=balanced&uio=MTE9OTIaf You can also email us at support@balancedpayments.com
  - jareau 13y ago
    live workshop/meetup/hack day would be really fun!

85 points by zende 13y ago

This is actually one of the very few things that has bothered me about Stripe – they don't make their volume pricing public (Amazon does, now Balanced does). We've had to email when we hit larger sums to get pricing reduced. Edit: although to be fair, I asked them about this, and they said their processing costs vary user to user, so they don't have a simple matrix (rather, they apply discounts based on the costs associated with an account). That's probably the best possible answer short of a pricing matrix...

pc 13y ago
Right; we've gone back-and-forth on how best to implement our volume pricing. The upside of a clear pricing matrix is that it's clear. The downside is that it's conservative -- we can (and do) give lower pricing than what we could commit to in a matrix like this to many users. Perhaps we should release a matrix of what we do on average (or a set of minimum discounts) or something. (As ever, feel free to drop me a line to discuss -- patrick@stripe.com.)
- zende 13y ago
  +1 for openness
  - https403 13y ago
    how about pricing for debit cards?
    - jareau 13y ago
      (I'm a Balanced employee) Sorry if this isn't clear. We don't have separate pricing for credit vs. debit cards. These rates are blended for all card types.
- cperciva 13y ago
  we can (and do) give lower pricing than what we could commit to in a matrix like this to many users. Can you elaborate on this? What factors influence what rates you can (and do) give? Chargeback rate? Mix of card types? Type of product or service being sold? Perhaps we should release a matrix of what we do on average I think that would be great -- even better if it's combined with a list of situations which would result in the rates being higher or lower than the norm.
  - cristinacordova 13y ago
    (I work at Stripe) The biggest factor in processor costs is actually the card mix, and not the volume that a business generates. To give you some sense, international, AmEx and corporate rewards cards tend to be much more expensive to process. Debit cards, on the other hand, tend to be fairly inexpensive to process for (although, despite the costs mentioned elsewhere in the thread, not all debit cards qualify for Durbin debit rates). Balanced's pricing matrix only takes one factor (volume) into account. So, for example, if a business accepts a high percentage of debit cards, we can offer a significantly lower rate than the prices in Balanced's matrix.
    - zende 13y ago
      What happens if a customer's card mix changes?
      - cristinacordova 13y ago
        Generally, we hold to the offered rate even in the case that the card mix changes and becomes more expensive. In the case that the card mix becomes less expensive, we'll decrease the rate as our costs have changed and we can offer a better price. Our pricing is always based on the costs of the transactions, rather than volume alone. There are downsides to focusing rates and adjusting them on volume alone. With the Balanced pricing matrix, if a merchant has a mediocre Q3 in volume, their pricing could increase for the highest volume quarter (Q4), even if Balanced's effective cost per transaction hasn't changed at all.
- dnfriedman 13y ago
  That makes sense – the main thing that bothered me actually is that I didn't (and still don't) know when to ask for discounts. Even if you said discounts vary, but we'll look automatically look at what we can offer when you hit the following sums... that would be great.
  - jareau 13y ago
    We had the same issue with our banking partners. Their pricing schemes are very opaque and we didn't know when we should approach them. We, and you, have better things to do than polling a bank/payments provider asking for discounts. The not knowing is part of the problem.
    - colechristensen 13y ago
      It probably can't hurt (or take more than 15 minutes) to periodically shoot an email and ask.
      - jareau 13y ago
        True. But we just love the experience of getting emails from AWS telling us we're paying too much and what we can do to bring costs down. Balanced is striving toward that level of transparency and customer focus.

rasengan 13y ago

Bravo to transparency. Isn't this expensive though?

mcorrand 13y ago
It's the same pricing as all their competitors if I recall correctly.
steveklabnik 13y ago
Balanced employee here. You can compare yourself: * http://blog.balancedpayments.com/volume-pricing/ http://blog.balancedpayments.com/volume-pricing/ * https://stripe.com/us/pricing https://stripe.com/us/pricing * https://www.braintreepayments.com/faq https://www.braintreepayments.com/faq control-f pricing TL;DR: Everyone has 2.9% + 30¢ on their page, Stripe mentions to email them for a discount if you're doing over $1MM/year.
throwaway85723 13y ago
Uh...no. In fact, 1.9% is probably way less than their costs (ie, unsustainable).
- zende 13y ago
  It's not.
- deleted 13y ago
  [deleted]
dangrossman 13y ago
PayPal's volume pricing has always been public as well: $0 - $3,000/month 2.9% + $0.30 $3,000 - $10,000 2.5% + $0.30 $10,000 - $100,000 2.2% + $0.30 $100,000+ 1.9% or less, requires calling sales Nonprofits automatically get 2.2% with no minimum volume, and in-person transaction with a PayPal Here dongle on your phone/tablet automatically get 2.7% flat with no minimum volume. https://www.paypal.com/webapps/mpp/merchant-fees https://www.paypal.com/webapps/mpp/merchant-fees

mcorrand 13y ago

I'm sorry if this is stated somewhere but I have not seen it anywhere. How are these thresholds calculated? Is this per store/merchant account or for the whole marketplace?

jareau 13y ago
(I'm a Balanced employee) We calculate these fees per marketplace. Usually a single marketplace has many merchants associated with it.
- mcorrand 13y ago
  Thank you! This is pretty nice then, I think when I first stumbled upon the pricing page a while ago, these reduced rates were already public. At the time I just assumed it was counted by store and got back to work. I still chose Balanced for the native marketplace support and general "openness" feel I get from the company.

harrisreynolds 13y ago

Cool. So this is essentially per marketplace? I've just launched simplegym.co that uses Balanced for handling payments. We currently are only doing around $10K/month in payments, but I believe it could grow into the discounted volume over the next few months.

jareau 13y ago
Thanks for using Balanced. Yes, this is per marketplace. We'd love to give you a discount. Our discounts are applied quarterly, so if you get to $100K+ by April 1, we'd be happy to drop your rate to 2.7% + 30¢ More here: https://www.balancedpayments.com/pricing https://www.balancedpayments.com/pricing

johnnyg 13y ago

Does this flat rate include AMEX transactions?

jareau 13y ago
yes.

abalone 13y ago

And to further the transparency, Visa & Mastercard also publish their interchange fees, which is the main cost for a processor like Balanced. Here's Visa's: http://usa.visa.com/download/merchants/visa-usa-interchange-reimbursement-fees-april2013.pdf http://usa.visa.com/download/merchants/visa-usa-interchange-... For online the fee program is usually "e-Commerce Basic". So here's Balanced's interchange costs, for Visa: Major debit cards[1]: 0.05% + $0.21 Unregulated debit cards (small banks): 1.65% + $0.15 Non-rewards credit cards: 1.8% + $0.10 Rewards credit cards: 1.95% + $0.10 Visa Signature Preferred (highest-end Visa cards): 2.4% + $0.10 Mastercard is usually similar. AmEx is usually more expensive. ----------- [1] This 0.05%/$0.21 rate is super interesting to note. The Durbin amendment was recently passed and regulates most debit card interchange down to practically nothing. This basically just happened and is potentially a huge profit center for processors who haven't updated their fees to reflect it. My guess is processors are right now all looking at each other and waiting to see who breaks rank.. but for the moment, merchants are not necessarily seeing the benefit. Processors are.

jareau 13y ago
This is really good insight abalone. Thanks for sharing.
deleted 13y ago
[deleted]
dangrossman 13y ago
This is one of the advantages to having a real merchant account instead of using a 3rd-party processor like Balanced/PayPal/Stripe. I pay interchange + 0.04% for all cards, so when someone pays me with debit, I'm charged 0.09% and not 2.9%. Several thousand dollars a month of my subscription payments are from debit/check cards; it adds up.
zende 13y ago
This is dead on. Here's a few other things to keep in mind: 1. A Durbin Regulated Debit Card include any bank that has over $10B in deposits. That's most debits cards by volume. 2. We've been lucky in being able to negotiate with our processing banks (also called acquiring bank) to receive very favorable rates to pass on those savings. You have to factor in this cost in addition to the interchange defined by the card brands. 3. Amex is more expensive than most other cards, but Amex is also the only card brand that will negotiate on their interchange based on volume and other factors. abalone: thanks for writing this up. It's a more detailed answer to https://news.ycombinator.com/item?id=7033534 https://news.ycombinator.com/item?id=7033534

deleted 13y ago

[deleted]

TomBeckman 13y ago

I've been dealing with credit card merchant accounts for our company for many years. The lack of transparency in the industry made it impossible to know if I was getting the best rates possible. Then I found http://www.cardfellow.com http://www.cardfellow.com where major providers compete for your business. All bids are cost plus based, so you can do a real comparison of the bids. Rates are locked in for life. You can keep the gateway that you're currently using. I ended up with a different division of the same provider I was using, but at a much lower rate. This reduced my net merchant account cost by 3 percentage points. Give it a try. There's no cost. And I have no connection to CardFellow other than that of a very happy customer.

MyNameIsMK 13y ago

I am really trying to integrate balanced into my software but I am just getting stuck. A few video tutorials or a live workshop/meetup/hack day would really help!

zende 13y ago
MyNameIsMK: We'd be happy to help. We're online right now for chat on #balanced on irc.freenode.net, which you can join online by going to http://webchat.freenode.net/?channels=balanced&uio=MTE9OTIaf http://webchat.freenode.net/?channels=balanced&uio=MTE9OTIaf You can also email us at support@balancedpayments.com
- jareau 13y ago
  live workshop/meetup/hack day would be really fun!