Hey HN readers,
I would like to know which payment platform are you currently using if you're selling products / SaaS subscriptions / eBooks / anything which can be bought online.
PayPal actually starts at 2.9% + $0.30 and charges a variety of add-on fees which you didn't include in your assessment: $30 per month if you want to design and host your own checkout pages, 1% cross-border surcharge if you want to accept payments from another country, 3.5% transaction fee when your customers pay with American Express, $0.30 per uncaptured authorization, a fixed fee portion of the original transaction fee when you issue a refund ($0.30 for domestic payments).
They do offer volume discounts, which is why you're at a 2.2% rate, and Stripe also offers volume discounts to businesses on track to do $1MM per year.
I'm not sure what your current processor and merchant account provider are, but we often do similar assessments against their add-on fees and come out to be less expensive.
A new venture is a lot more likely to reach PayPal's threshold for discounted fees ($3,000/month) than Stripe's ($83,333/month). There is no additional fee for American Express cards with Website Payments Standard.
The only fixed fee my current merchant provider charges is $5/month, and I pay a $99/year fee to a PCI scanning service. The merchant account space isn't resting on its laurels with startups like yours moving in; there's dozens that have moved to simpler pricing and eliminated bullshit fees to remain competitive.
Anyone accepting mostly domestic transactions with a monthly volume between a few thousand and $80,000 is probably going to save at least $30/month by choosing PayPal over Stripe, so the monthly charge isn't really a barrier even for their Pro service. Unless they go through one of your partner integrations like Shopify where you seem willing to offer the discounted rates without a minimum volume. I've set up a few people on that, it's a good deal for little shops.
Cost isn't the only factor. I'd be more than happy to pay 30 dollars more for not having to deal with PayPal antics. Stripe's API is a charm, fast and easy integration, and customer support is excellent. Not to mention documentation. PayPal OTOH, I've read too many horror stories about revoked accounts, disputed charges not to mention the pain of integrating the IPN. Lastly, there's the ugly paypal button. Not exactly professional looking, if you ask me.
I am launching my first book at the end of this month and I will be using Gumroad for payments. They offer the most simple, responsive, and beautiful experience for accepting payment. They take 5% + 25¢ per transaction.
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[ 2.7 ms ] story [ 35.9 ms ] threadPayPal actually starts at 2.9% + $0.30 and charges a variety of add-on fees which you didn't include in your assessment: $30 per month if you want to design and host your own checkout pages, 1% cross-border surcharge if you want to accept payments from another country, 3.5% transaction fee when your customers pay with American Express, $0.30 per uncaptured authorization, a fixed fee portion of the original transaction fee when you issue a refund ($0.30 for domestic payments).
They do offer volume discounts, which is why you're at a 2.2% rate, and Stripe also offers volume discounts to businesses on track to do $1MM per year.
I'm not sure what your current processor and merchant account provider are, but we often do similar assessments against their add-on fees and come out to be less expensive.
The only fixed fee my current merchant provider charges is $5/month, and I pay a $99/year fee to a PCI scanning service. The merchant account space isn't resting on its laurels with startups like yours moving in; there's dozens that have moved to simpler pricing and eliminated bullshit fees to remain competitive.
Anyone accepting mostly domestic transactions with a monthly volume between a few thousand and $80,000 is probably going to save at least $30/month by choosing PayPal over Stripe, so the monthly charge isn't really a barrier even for their Pro service. Unless they go through one of your partner integrations like Shopify where you seem willing to offer the discounted rates without a minimum volume. I've set up a few people on that, it's a good deal for little shops.
Stripe is a blessinq!
PS : did you read Authority from Nathan Barry ?