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Billing with Stripe

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Re: Billing with Stripe

#21

Post by fastspring »

diolpah wrote: post #20
damoncali wrote: post #10

Earlier quoted context omitted.

Does this fact cause you any concern over stripe's decision to serve small companies for whom 130 dollars is a significant amount over large customers who will be turned off by their percentage fees? My main resistance to switching to stripe is that I can't figure out how they are going to make any money. I'd like the extra 130 dollars each month, too, but will it last?

What exactly do you mean by "large customers"? We run several million dollars worth of credit card transactions per year( through cybersource and authorize.net right now ), and we pay at or near the wholesale interchange rate. Even so, our accounting department still can't fully untangle the mess of foreign transfer and conversion fees, float-related costs, gateway fees, amex vs visa discount rate differentials, pci…

Generally you end up paying 3.5-4% assuming you accept foreign credit card transactions, Amex, corporate cards, rewards cards, etc. There's a misconception that it's around 2%, but if you do these types of transactions and look closely at your statements, 3.5-4% is the normal range, including a few chargebacks.

Re: Billing with Stripe

#22

Post by fastspring »

Missing various elements that most SaaS companies need or will need; API-based vs. UI with complete functionality; lots of development work still necessary to have the type of e-commerce subscription management infrastructure that a serious company needs. Cant work with non-US clients. A comparison between SaaSy.com and other services which illustrates some of the missing global subscription e-commerce functionality: http://bit.ly/nSKT7J

Re: Billing with Stripe

#23

Post by dustineichler »

I love Railscasts, but this seems a little premature even by Rbates standards or popularity. Generally, Railscasts revolve around industry standards. I'm not saying Stripe won't be, it probably will... but man, this is some front running.

Re: Billing with Stripe

#24

Post by pitdesi »

diolpah wrote: post #20
damoncali wrote: post #10

Earlier quoted context omitted.

Does this fact cause you any concern over stripe's decision to serve small companies for whom 130 dollars is a significant amount over large customers who will be turned off by their percentage fees? My main resistance to switching to stripe is that I can't figure out how they are going to make any money. I'd like the extra 130 dollars each month, too, but will it last?

What exactly do you mean by "large customers"? We run several million dollars worth of credit card transactions per year( through cybersource and authorize.net right now ), and we pay at or near the wholesale interchange rate. Even so, our accounting department still can't fully untangle the mess of foreign transfer and conversion fees, float-related costs, gateway fees, amex vs visa discount rate differentials, pci…

If you are indeed close to interchange, you shouldn't have an issue with many of those things (aside from Amex). Cybersource and Authorize.net are a source of your problems - they do their best to lock you in to terrible pricing and tack on hefty fees all over the place.

Foreign fees really should be quite close to your other fees. You take a hit on the fact that they are "foreign" but they actually fall under a lower interchange category, so it comes out a wash for the most part. There should be no float-related costs, gateway fees are standard for auth.net, most reasonable places won't charge you PCI fees if you fill out the simple questionnaire, etc. With a decently-priced interchange plus merchant account and gateway, you should come out much cheaper.

Disclosure: I'm with FeeFighters (http://feefighters.com). We have a bundled merchant account/gateway (http://samurai.feefighters.com) that is a bit different from Stripe, priced at 2.3% + $0.30, but has a monthly fee of $25 and AmEx is separate (2.9%+$0.15).

Re: Billing with Stripe

#29

Post by damoncali »

diolpah wrote: post #20
damoncali wrote: post #10

Earlier quoted context omitted.

Does this fact cause you any concern over stripe's decision to serve small companies for whom 130 dollars is a significant amount over large customers who will be turned off by their percentage fees? My main resistance to switching to stripe is that I can't figure out how they are going to make any money. I'd like the extra 130 dollars each month, too, but will it last?

What exactly do you mean by "large customers"? We run several million dollars worth of credit card transactions per year( through cybersource and authorize.net right now ), and we pay at or near the wholesale interchange rate. Even so, our accounting department still can't fully untangle the mess of foreign transfer and conversion fees, float-related costs, gateway fees, amex vs visa discount rate differentials, pci…

Very good point. I can't untangle mine and I am way, way smaller than your company.

Re: Billing with Stripe

#30

Post by damoncali »

aculver wrote: post #13
damoncali wrote: post #10

Earlier quoted context omitted.

Does this fact cause you any concern over stripe's decision to serve small companies for whom 130 dollars is a significant amount over large customers who will be turned off by their percentage fees? My main resistance to switching to stripe is that I can't figure out how they are going to make any money. I'd like the extra 130 dollars each month, too, but will it last?

Not concerned at all. One of the team members there mentioned in an earlier thread that some big customers are already using it. Furthermore, the pricing model is very similar to what Square did in the point-of-service credit card space, and they're doing a massive amount of business now. I think the vast number of folks that they'll attract will far outweigh that recurring $130 security blanket. For the better part…

You may be right - as I said, I'm tempted. I am somewhat concerned that they will have a "Chargify moment" when support costs become a driver. But I hope that's not the case - Stripe looks amazing.
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