HN Explorer

Ash HN: Best Micropayment Processor?

35 points by ginkoutest ↗ HN
I want to work on a project that allows for easily sharing paywalled links for the price of $1. It seems Stripe will take 30 cents (plus transaction fees) on every dollar processed, and PayPal will take 49 cents, for credit card payments. Are there any cheaper alternatives out there?

I considered a workaround to use the Venmo API because it seems they only charge 3% for credit card processing. But are there any significant cons I should be aware of before building a SaaS on top of Venmo to facilitate high volumes of $1 payments?

34 comments

[ 8.0 ms ] story [ 94.8 ms ] thread
DamonHD
Debit cards should be cheaper than credit.
m_km
Both PayPal and Stripe have a separate ‘micro transactions’ pricing that they will enable upon your request. Instead of 2.9%+$0.30, they will charge you 5%+$0.05.
toast0
No experience with Stripe, but PayPal's micropayment pricing isn't available for as many countries as their normal credit card pricing, and it's not guaranteed that they'll enable it if you ask.
ksec
OH wow. Thank You I didn't know that. So basically 10% for $1 transaction. If my calculation is correct the breaking point is $12. So anything under $12, assuming the country supports it.
leesalminen
This is going to be unpopular here, but Bitcoin’s layer 2 Lightning Network is pretty ideal for micropayments.

Strike (strike.me) is a Venmo-like app that lets users connect their bank account and then hold a USD balance. The only difference is that users can use their USD to send Bitcoin to the other end. They’re not exposed to bitcoin’s price volatility.

On nostr, users are sending micro tips to other each other fairly successfully. The UX isn’t great right now, but I recommend trying it out- it is a functioning version of social micro payments.

colesantiago
Crypto, Bitcoin and the rest of it cannot (and can never be) a solution to micropayments at all.

It encourages people to lose their money due to extreme volatility and nobody uses it for anything other than speculative trading which also encourages people to lose money.

str3wer
stablecoins.
colesantiago
Stablecoins are not stable at all.

tokens like LUNA went to 0 and USDC, USDT and others depegged which isn't really convincing as a micropayments alternative, in fact it is extremely dangerous.

sneak
Stablecoins are more stable than BTC and ETH, so they have quite a bit more utility than one might think, given your comment.
colesantiago
Nope, what are they backed by? Nothing other than 'attestations' and 'trust me bro'.

Tether is a fraudulent ponzi, USDC is not stable and is backed by meaningless attestations, Luna is, well gone all the way to the floor.

Even if we take USDC on ETH there exists the uncontrollable volatile gas fee tax which is pointless for micropayments.

'Stablecoins' (or 'stabletokens' are inherently fraudulent and dead on arrival and is only used to pump the price of BTC in the which is the case for Tether.

https://www.bloomberg.com/news/features/2021-10-07/crypto-my...

sneak
What is USD “backed by”? It’s not gold and it’s not any USG promise to pay.

Stablecoins don’t need to be backed by anything to be stable. I agree with most of what you say, but that doesn’t actually refute my point that stablecoins are, in fact, more stable than most cryptocurrencies. They are more than stable enough to use for a payment aggregation layer for a few days.

I even agree with you about Tether being a fraud; I still use USDT every day (with that knowledge) because it is, well, stable. One day it won’t be, but most days, it is.

colesantiago
At least we know it was backed by _something_, fiat is the worst system except all the others.

Yet USD is legal tender for US taxes and there is a shared interest in using USD rather than some risky unknown potemkin token like 'stablecoins', which nobody accepts or wants.

And you cannot pay US taxes with your stablecoins, so there's that.

> Stablecoins don’t need to be backed by anything to be stable...

So then we will get a LUNA situation of being backed by 'algorithms' then everyone is screwed when the token inevitably goes to zero.

Recommended Reading:

https://www.stephendiehl.com/blog/stablecoins.html

sneak
> rather than some risky unknown potemkin token like 'stablecoins', which nobody accepts or wants.

I know many, many people in many countries who accept stablecoins as cash-equivalent. I think perhaps you underestimate the market.

ffgjgf1
Stable coins are pegged to $ so they need to be backed by it (or other assets denominated in $) pretty much be definition
redavni
The USD is backed by US Military, The Secret Service, ~165 million highly educated wage earners, a long tradition of capitalism, and millions of accountants making things more complicated than they need to be. Long term trends towards socialism and marxism are serious threats to dollar valuation though.
sneak
We have very different definitions of “backed”, then, and are probably talking at cross purposes.
loveparade
Very little gas fees on L2 and it's settled to Ethereum. Tether is a scam, but USDC is pretty well backed and regulated.
carlosjobim
The OP is talking about micro-payments. You wouldn't need to load your life savings into Bitcoin or any other crypto to have some money for micro-transactions.
Roguelazer
The usual solution is to just do a stored value system; give people a wallet in your system that they can top off in $20 increments, then the actual microtransactions are just a database write.
vortegne
But that is also a terrible system for a user. I try to avoid any app that does this.
seydor
curious do you find other systems? Because as OP says it s still not feasible to do microtransactions on the web
ecesena
In theory I agree, meaning I'm the same way.

In practice I don't believe it's true though, as there are very popular (outside the US) payments systems like Satispay the are exactly like that.

andrewmcwatters
I’m going to echo here what Roguelazer has already mentioned and add to it the business benefit: you will eventually not want people only making $1 payments.

A $10 account credit is probably the minimum you should consider in today’s environment. That’s plenty, and it’s not too much for low usage accounts.

kccqzy
If you are making an app, have you simply considered Apple and Google's in-app purchases for these transactions? You can totally just charge $1. Apple and Google will then take exactly 30% (which is 30 cents). There are programs where you can reduce that to 15%.
brudgers
To a first approximation your experience is why micropayments have never taken hold…

They seem as much like a great idea here in 2023 as they did in 1994 when I first read about the idea. I had just started using the internet.

Micropayments are infeasible because financial infrastructure has non-trivial costs. The costs are non-trivial because there the highest incentives to steal money and thus systems need hardened surfaces.

At $0.30/transaction the cost of 10,000,000 automated attacks per hour/day/week becomes real money.

And at $0.30/transaction there seems to be enough money to provide enough resources to make the system robust enough.

Anyway, charging more is an easy way to make the business viable if it is going to be viable…and if you can’t provide $10 of value it probably isn’t.

Good luck.

supertrope
Indeed. Even stored value systems that cannot be directly cashed out suffer fraud. E.g. Toll-free phone numbers suffer traffic pumping fraud. Fraudsters robocall and try to keep each call going as long as possible as they get a cut of the per minute revenue. Bitcoin ushered in the direct monetization of stolen CPU time without having to first use it for spam, DDoS, etc.
fnomnom
whatever happened to flattr?
[deleted]
(comment deleted)
fragmede
Are you referring to the Venmo API at https://venmo.com/docs/overview/ which has the following warning? If you've managed to buy a business' account to use that API, go for it, but otherwise that seems a bit of a development dead end.

> Our Venmo Developer and Payouts APIs have been retired, and we are no longer able to provide access to businesses who may want to start using it. To find out more about how you can use Venmo as a payment method in your checkout experience, visit https://venmo.com/business/accept-venmo-in-stores.

> For existing businesses who were granted access to the Developer or Payouts API in the past (generally prior to 2016), you will retain access to these APIs and may use them.

Edit: https://techcrunch.com/2016/02/26/how-not-to-run-a-platform

How are you getting access to the Venmo API?

[deleted]
(comment deleted)
[deleted]
(comment deleted)
maia_g
Paddle has a special pricing for selling products under $10, just 10% - so your $1 fee will end up being $0.10 - it's upon request so you have to ask, but I was making zero sales and they still enabled it for my account.