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Cheap Recurring Payments with Stripe and AWS Lambda

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Re: Cheap Recurring Payments with Stripe and AWS Lambda

#101

Post by WhiteOwlLion »

pc86 wrote: post #58
pbowyer wrote: post #18

Earlier quoted context omitted.

Is that for offline processing in a lowest risk industry? Curious as never seen a client get such a rate. Esp once acquirer fees for online payments are factored in (UK experience only)

I've never seen rates that low for recurring payments. Swiped cards in a brick-and-mortar, sure. The kind that batch nightly. But not for a SaaS where someone types in a card and you keep charging it for the next 36 months.

Recurring payments is a minimal risk after the first payment processed. If you're going to set up recurring, having an ACH transfer from bank account is going to be cheapest, or debit card paid via ACH.

Re: Cheap Recurring Payments with Stripe and AWS Lambda

#102

Post by pyre »

debaserab2 wrote: post #79
imron wrote: post #49

Earlier quoted context omitted.

If you're doing less than a hundred thousand a year in revenue, you will likely save in development costs what you would pay in fees (3% x $100,000 = $3,000 = ~week of development costs). Depending on which Stripe features you make use of and would have to re-implement yourself it may even make Stripe more affordable up to a couple of hundred thousand in revenue. That makes it very attractive for side projects or boo…

If anything I think your estimation underscores the point that it quickly becomes worth the investment to shop for a cheaper payment option. It always surprises me how quickly people are willing to adopt stripe without even making this calculation on their own and considering competitors. I suspect since they are YC funded they give discounts to other YC companies which makes it a more viable option and helps foster…

The positive sentiment is because they are a credit card processor that has a good API and supporting libraries. For some payment processors you are stuck with "here is our Java Middleware and this is the only thing you are allowed to use."

Re: Cheap Recurring Payments with Stripe and AWS Lambda

#103

Post by pyre »

slice_of_life wrote: post #51
kawsper wrote: post #37

Earlier quoted context omitted.

Currently it is legal for companies in the EU to ask the customer to pay the processing fees, some call it surcharging. EU seems to want to get rid of this practice, I wonder if it becomes a company expense, that we will see companies caring more about the processing fees.

I must say that I'm genuinely surprised by this phenomenon. One would think that it is a business' business to figure out how much to charge a customer. A willing customer will pay, an unwilling one won't. How is it a question of legality?

It's a question of "do you charge 3% more for credit card payments to cover the charges from the credit card companies, but leave off that fee for non-credit card payments?"

Most credit card companies _don't_ want you to do that because charging more to pay with a credit card makes using your credit card a less enticing idea. IIRC, this stuff is usually handled in your contract with the credit card processor.

The last company that I worked for that used a credit card processor other than Stripe, the rules were something like:

* 2-3% of the transaction is the processor's keep

* You are allowed to charge a surcharge, but _only_ if it's a flat fee. You cannot add a 2-3% fee to cover the credit card charges, nor can you have some sort of "flat-fee schedule" where the flat-fee changes based on the amount being charged (e.g. charges of $1 - $100 get a $0.50 fee, but charges $100+ get a $5 fee). You can only do something like $0.50 fee to all charges.

* You cannot charge a different price for products when they are purchased via credit card.

Re: Cheap Recurring Payments with Stripe and AWS Lambda

#104

Post by tuna-piano »

oliwarner wrote: post #15

~3%, dirt cheap?! Why are so many of you so happy to throw so much cash away to process money? I know Stripe is lovely to integrate but as a business you have to shop around. In the UK (and EU) card processing is much cheaper. Stripe is closer to 2% but if you shop around, you'll find somebody who'll offer you 0.8-0.9%, give you free terminals and no monthly contract fees. Edit for those asking: Worldpay and Handepay…

If you're a low volume business, then the difference of 1% probably isn't worth much headache. I can't comment on how easy those services are to integrate, but I've personally found Stripe super easy.

Even if a business is doing $500k of charges a year, I'd guess it's probably not worth the time to save $5k a year... there are usually more impactful uses of time. And when businesses get to high volumes, where integration costs become much smaller as a percent of revenue, then Stripe will give you a better deal.

Re: Cheap Recurring Payments with Stripe and AWS Lambda

#105

Post by debaserab2 »

pyre wrote: post #102
debaserab2 wrote: post #79

Earlier quoted context omitted.

If anything I think your estimation underscores the point that it quickly becomes worth the investment to shop for a cheaper payment option. It always surprises me how quickly people are willing to adopt stripe without even making this calculation on their own and considering competitors. I suspect since they are YC funded they give discounts to other YC companies which makes it a more viable option and helps foster…

The positive sentiment is because they are a credit card processor that has a good API and supporting libraries. For some payment processors you are stuck with "here is our Java Middleware and this is the only thing you are allowed to use."

Yeah, I understand that's the root of it, but I've never understood how that positive sentiment remains so dominant when you start digging under the hood and realize that you're paying a percentage of your revenue for what amounts to a slick API or integrations. You don't need to be a financial genius to understand how little that adds up. It's always surprised me given the Hacker News crowd tends to like to dig into the details on most things.

Re: Cheap Recurring Payments with Stripe and AWS Lambda

#106

Post by slice_of_life »

pyre wrote: post #103
slice_of_life wrote: post #51

Earlier quoted context omitted.

I must say that I'm genuinely surprised by this phenomenon. One would think that it is a business' business to figure out how much to charge a customer. A willing customer will pay, an unwilling one won't. How is it a question of legality?

It's a question of "do you charge 3% more for credit card payments to cover the charges from the credit card companies, but leave off that fee for non-credit card payments?" Most credit card companies _don't_ want you to do that because charging more to pay with a credit card makes using your credit card a less enticing idea. IIRC, this stuff is usually handled in your contract with the credit card processor. The las…

>Most credit card companies _don't_ want you to do that because charging more to pay with a credit card makes using your credit card a less enticing idea.

This is obviously good for the card companies and to a degree the digital payments landscape as a whole.

I do however see how it can be a problem for small merchants who can't negotiate for better rates with MAPs due to lack of volume. A 2 - 3% fee is quite significant seeing as though many retailers will have a 7-12% net margin. For a merchant not to be able to push the cost to a customer even if it is just part of it would be difficult for a business to sustain. There are other costs that merchants are dealing with such as cost of packaging and as such, a 2-3% fee is no mean feat.

Re: Cheap Recurring Payments with Stripe and AWS Lambda

#107

Post by loader »

stevekemp wrote: post #100

Remember that if you use stripe subscriptions you absolutely must setup a webhook, or otherwise examine your logs every month. Why? If a customer is subscribed to a "plan", and their payment fails it is retried three days later, then five days later, then eight days later, and if all three payments fail they're quietly unsubscribed without any notification being sent to you! I have a toy project which has paying cust…

Both webhooks and looking at your subscription settings are important. Here's some documentation on how to do both.

https://stripe.com/docs/webhooks

https://stripe.com/docs/subscriptions/lifecycle

The webhooks are important because stripe doesn't email you about failed payments you need to do that on your own.

And the default for a 3 time failed subscription over a 15 day period is to remove the subscription which you can easily change to keeping it but labeling it unpaid among other things.

Re: Cheap Recurring Payments with Stripe and AWS Lambda

#108

Post by olegkikin »

stevekemp wrote: post #100

Remember that if you use stripe subscriptions you absolutely must setup a webhook, or otherwise examine your logs every month. Why? If a customer is subscribed to a "plan", and their payment fails it is retried three days later, then five days later, then eight days later, and if all three payments fail they're quietly unsubscribed without any notification being sent to you! I have a toy project which has paying cust…

Out of curiosity, did any of these customers return?

Re: Cheap Recurring Payments with Stripe and AWS Lambda

#109

Post by bigtunacan »

I've seen several comments on here about how high a percentage is being charged by credit card processors and this is something I've wondered about for a while. There are some sites where I feel like I must be missing something.

As an example; https://www.sendmoneytoschool.com.

The site is used to pay online with a credit card for your children's school lunch and it typically charges a $1.50 "convenience fee". It is my understanding that they are not charging schools for the use of this service (I may be mistaken); at Stripe or PayPals fee rates this service would be losing money. Every $100 would incur at least a $2.00 fee. Here a low cost processor like Worldpay and Handepay would allow for a profit; albeit a very small one.

Re: Cheap Recurring Payments with Stripe and AWS Lambda

#110

Post by kromem »

oliwarner wrote: post #15

~3%, dirt cheap?! Why are so many of you so happy to throw so much cash away to process money? I know Stripe is lovely to integrate but as a business you have to shop around. In the UK (and EU) card processing is much cheaper. Stripe is closer to 2% but if you shop around, you'll find somebody who'll offer you 0.8-0.9%, give you free terminals and no monthly contract fees. Edit for those asking: Worldpay and Handepay…

If you are processing card present transactions, you shouldn't use Stripe, which is priced for online transaction fees.

I highly suggest reading up on interchange fees for various cards before taking a swipe at Stripe.

2.9% + $0.30 is absolutely rediculous to pay to transfer money, but blame the card companies. You simply can't get cheaper flat pricing on card transactions. Even online debit interchange fees are rediculous.

So if you do want cheaper, you need to try and find a provider that charges based on the underlying interchange fee. And then once you do so, you need to account for the variable rates in your accounting (can be a pain depending on your situation, especially if you don't know the interchange until the customer enters their card number), and even then, you're probably saving at max 1%, but likely a good bit lower on average.

You could always opt with ACH, but the more reliable way of authorizing ACH these days is using a service like Plaid that has the user log into their Bank on your site. Which is super sketch if it's the first time I'm purchasing on your site. I really wish Dwolla was able to upturn the industry ($0.25 flat fee for transfers was brilliant), but who wanted to sign up for yet another account to purchase stuff...

Payments suck.

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