Hacker News Reader

Comment by cardine | Hacker News Reader

I have a feeling that ACH payments are mostly only going to be widely adapted in instances where the purchase price is very large (5 figure+ transactions) where you have a dedicated account rep. I think it'll be quite a while before users are comfortable entering in their bank account login info to buy a $30 product.

View on HN

And where the purchase price is large, those customers don't want some 3rd party interface to send the ACH...they typically already know how to send an ACH. They just want your account+routing so they can do it.

In short, this solution from Stripe fills a niche, but it's a very narrow one.

>In short, this solution from Stripe fills a niche, but it's a very narrow one.

Not too sure about that. Klarna in Europe has a similar system called SOFORT in a lot of countries processing millions of transactions [0]. According to a german article, they processed 2.4 billion euros in 2013 [1]

iDEAL using a similar system (officially provided by banks though) is the most popular payment method in the Netherlands [2].

There is probably a big market for bank transfers with instant confirmation for the merchant. I agree with you though that it is a niche in the US, because credit cards are so common. Expansion in the EU would've probably allowed them to access a bigger potential market.

[0]: https://www.sofort.com/eng-GB/press-releases-sofort-gmbh/pre...

[1]: https://translate.google.de/translate?hl=de&sl=auto&tl=en&u=...

[2]: https://en.wikipedia.org/wiki/IDEAL

The European payments landscape is much, much different:

1. Because they make less money on cards and card networks are controlled by pushy American corporations, European banks actively campaign against the use of cards online. So instead of feeling confident in Zero Fraud Liability as they are here, consumers in Europe are scared of getting hacked.

2. In some countries, banks don't even print the card number on the card, so you can't use them online if you want to.

3. Cards do not have rewards, so there's much less incentive to use them, even if they could.

4. As a result, consumers are accustomed to using "bank buttons" which let them log into their bank site to push a payment.

5. But that becomes really complex when you have more than 6 banks in a market, so solutions like SOFORT simplify by creating a centralized bank button.

In short, Americans value rewards and convenience whereas Europeans value security. There have been several ACH-based online payment efforts in the US (eBillMe, Mazooma, Noca, etc.) and all have failed.

I would also argue that ACH process $40T a year, while all credit and debit card networks move a collective ~$7T.

What portion of the $40T do you suppose, though, is the type of transaction that would move to something like Stripe?

At least in the U.S, Stripe's opportunity is moving more of that $7T to ACH, not moving existing ACH to their platform.

ACH for B2B is a significant chunk of that money, so is payroll. It's also admittedly misleading because the card networks use ACH significantly to settle money from Bank A to Bank B (i.e. on "the backend").

This is poignantly addressed by @PC's comment addressing whether or not this would be available with Stripe Checkout.

ACH, for now, is generally terrible in retail situations. NO one wants to wait an additional 2-3 days (to all for funds to clear) to see their shipment be sent from Amazon. There are some niche use cases where it may work for pay-ins, for example online custom wood shops—where there's a built in delay to build the product—or other services where physical products don't need to change hands.

Reply on news.ycombinator.com