Stripe in Japan | Hacker News Reader

Stripe in Japan

stripe.com

129 pointssamber96 comments

I evaluated stripe for a French company here in Europe, having heard lots of good things about them, and I have to say that while the integration was top notch, they were vastly inferior to local bank competitors in two areas : no support whatsoever for 3D secure (once you've started using it, you never want to go back), and way higher pricing. National banks (CIC, Caisse d'Epargne) both offered % way, way lower than stripe (under 0.5% per transaction, stripe being almost 3* that for European card and 6* that for non European card).

Even including the small monthly fee and the harder / higher cost integration, it made no sense to go with them.

Was a bit surprised, mostly by the good terms that could be obtained in locally national banks once you sit with someone. Company I was representing wasn't very large (12 employees). I wonder what others here have experienced? Is it a special scenario that never happens, is it usual?

> 3D secure

As a customer, I hate 3D secure. When I get that shit thrown at me, I often just head over to Amazon and buy the same item there. Even if it is more expensive.

Reasons:

The 3D Secure form always looks so unprofessional it makes me shiver.

It often is loaded in an iframe so it could come from god knows where.

Often it plain out does not work. It aborts the transaction with "Transaction aborted" or something like that with no further info. So I sit there thinking "Uhm.. what now? Is my password wrong or what?".

Why would I input even more of my data into your damn form? The more data I give you, the easier you can mess with me. Now my CC card number and verification number is not enough anymore. Now you want my 3D "secure" password. What do you want next?

I've used it via "verified by visa" with two banks in two countries.

In both cases, there is a custom phrase that I provide the bank, which is then provided on the 3D-secure page where i enter the sms OTP.

Honestly so long as they show me the phrase I gave them, I couldn't give two shits if it looks like it was designed in 2002, at least that keeps it consistent with the rest of their online banking page styles.

Here in Sweden, 3D secure is effectively synonymous with two-factor auth.

It's insane that, at this point, the banks don't just outright block any payment recipient that doesn't use it.

I can only talk from my experience, but with 3 different (french) banks it has been decent looking (paypal level), clear instructions and errors, let me retry 2 or 3 times if I type the wrong code.

The only issue is that I agree it shouldn't be allowed in iframes. The vast majority of ecommerce here uses it nowaday, except for sum under 20€ usually.

Most banks in Germany seems to have switched to text messages or generator apps for the 3D Secure code. A lot better experience and protects against simple phishing.

That's why there is Apple Pay on the Web. I bought a new iPhone so that I could use it instead of 3DS.

> no support whatsoever for 3D secure

This has always confused me about Stripe. They have integrations with various market-specific systems for many markets, but they don't have something that both vendors and consumers expect in the EU.

They apparently are working on it [1]. I asked to join the private beta a few months ago, but haven't been invited so far.

[1]: https://support.stripe.com/questions/does-stripe-support-3d-...

(I work at Stripe.) My apologies, if you email me at lachy@stripe.com I can invite you.

3D secure is a funny beast.

We've seen conversion rates with 3D secure for certain products drop up to 40%.

You need to tradeoff fraud/dispute stuff vs usability/conversions.

We're talking physical goods, right? I don't see why you would ever use 3D secure for digital "stuff".

Because it moves the onus of dealing with the fraud on the bank, not the seller.

Let's say you sell a premium account on SuperSite, giving for 10€ one month of free movie streaming. Now you get a good deal with Publisher, which gives you access to their movies catalog. Suddenly you get users registering, subscribing, watching the movie they want, then cancelling through their bank, by doing a chargeback, claiming fraud or that you didn't deliver the product. Sometimes, it was even a stolen card, and the user doing the chargeback is honest.

Without 3D Secure, you're out of your money until the issue is resolved, which can take up to 60 days. With 3D Secure, you keep the money, only after 60 days, if you have been found to be the one in the wrong, do you give back the money. And if it's a stolen card, since it passed 3D Secure it still isn't your problem in a lot of case.

That is the incentive they used to get merchants to deploy it quickly and in just a few years it moved from nowhere to everywhere in France and throughout the EU.

Reduce the employee count from 12 to 1, who isn't even a real employee because the company has no revenue yet, and suddenly Stripe proposition is much more interesting: it allows you to focus on your product, and finding product-market fit, instead of sitting with someone in a bank. Even when that someone is kind, competent and helpful (as has been my experience with several French banks, special mention to the Banque Populaire de Lorraine), even with exactly zero revenues yet. At such an early stage the ease of integration is overall much more important than the smaller transaction fee.

Oh I agree, but I think Stripe and Braintree have pretty much acquired the minds of people in that situation. Where they need to grow I believe is the next stage, the one I was in, "ok so we actually have an actual company that people want to pay for stuff, now we need to monetize on the internet", and in that area they're not that good.

Its funny but I helped a company setup their MSP from tech point of view (integration) and being in high risk business, 3 years later they got dropped by 4 major MSPs in USA and only one that stays with them is.. Bank of America Merchants.

Not only that, but with high risk their rates used to be 6-8% fee; with BOA its 1.7%.

My take is that BOA is so huge that they don't pay as much attention to chargebacks as other players. Of course eventually you might get kicked out if you misbehave, but on the other hand with EMS they went through 3 months of application process (and over 30 changes to their website to satisfy compliance department), and then got dropped at the first chargeback after processing 500 transactions. EMS explanation - you can't have more than 0.00% chargebacks on your account, which, unless you don't sell online at all, is impossible.

As of stripe, I never looked at them seriously enough, cause I was turned off by their false advertisement: happy woman that says "all my funds are at my bank account overnight, no questions ask". If you ever processed a dollar in USA, you know how far from truth that is -- in fact, process more than 5% of your monthly average with most MSPs and your funds will be on hold for few days for "manual review". That's a standard procedure and google's search for "stripe holds my funds" clearly shows this behavior. Stripe knows this but with their ads they target naive or non-experienced sellers.

Stripe is a good option for developers, but they are very expensive. They lowered their prices two times this year in France (2.9%+30c -> 1.8%+25c -> 1.4%+25c), but that's not enough to compete with local alternatives for medium to large businesses. It's very common to get "Interchange+" pricing in France, where the actual costs of processing are passed onto the merchant, plus a more transparent gateway fee (like a few cents).

The fact they lack some critical features for cheap and reliable card payments (3DS, Carte Bancaire network + transparent pricing) is a no-no for more traditional businesses.

Hi Artemis2, if you process more than €30,000 per month, we can offer volume discounting [0]. Separately, we have support for 3DS in private beta.

[0] Including interchange plus!

Depends on your needs - Stripe is about convenience IMO and works best for small shops. I've heard from people in the payments industry that Stripe's actual payment tech is sub-par and dated - cannot compete with the Braintree/Adyens of the world. If you require complexity then choose a more established vendor.

If you do sufficient volume, I would assume you can negotiate the price per transaction way down.

(I work at Stripe.) We are supporting 3D-Secure in private beta—if you'd like access, please email me support@stripe.com (https://support.stripe.com/questions/does-stripe-support-3d-...)

For those curious, a paper detailing some known issues with 3D Secure's security: http://www.cl.cam.ac.uk/~rja14/Papers/fc10vbvsecurecode.pdf

Doing an IT integration with a French bank? No thanks. Aren't they still using SOAP?

As far as 3D, that 'service' is a pain. A consumer has to call their bank to 'enable' the service and do silly things like wait for pin codes in the mail to activate their cell phones and just various "security" theater. France has the highest rate of credit card fraud rate in Europe so even with all of that bureaucracy, it still has a huge problem.

In terms of in person credit payments, Sum Up (sumup.fr) is the very best. Low fees, no forced connection to a specific bank. I use them for a small hotel business we have in the Luberon.

I think it's a big feature to not have to work with French banks on anything. Their processes are stuck in the early 1990s: almost everything security related is done by mail, enabling things like international bank transfers online takes an inordinate amount of paperwork. Then they charge you a fee to actually have a debit card. For our business card, we're paying something around €15 per month per card.

Also Stripe supports Bitcoin and Apple Pay (both web and mobile.)

I admit I have strong loyalty to Stripe, they make all-based options look like fax machines by comparison. I'd rather my dev team be spending time of features that increase sales rather than wasting time on rusty bank integrations. Other benefits of Stripe include the fact that PCI (or the French equivalent is covered -- my own systems don't have to worry much about it, so there is a lower cost of ownership in terms of infrastructure requirements.) Finally, if you're an enterprise at scale, Stripe offers volume discounts.

Everyone obviously has variables in terms of business model so Stripe might not be the best option for some businesses, but in many cases, they are a huge win.

Almost everything you just said regarding French banks procedures, 3d secure and fees is incorrect. Either your experience dates from a long, long, LONG time ago, or you're making things up.

For reference, virtually 100% of card owner in France can pay using 3d secure and they don't need any mail for that. The most common form of verification is a sms on your registered cellphone number.

I haven't had to deal with soap, nor send any postal mail, for any part of our dealings. Including for fraud resolutions.

And possibly your biggest mistake, from the merchant point of view whether or not 3d secure reduce the amount of fraud or not is irrelevant. If the payment is made using it, then the fraud is purely the bank's problem, whereas without it's yours and you're out of your money until the fraud is resolved.

My own experience of 3D Secure in the UK is that my bank flashes up a page and then it works automatically. With a friend's card, he has a password he enters. It works fine.

We (at MakeLeaps) integrated Stripe as an option in our SaaS product for small businesses in Japan pretty much as soon as it became available in beta. Our users can send Japanese invoices and have them paid through Stripe. We just flipped on multi-currency support when they launched it in beta and it was done in a day.

They've been rolling out features to close the gap in functionality with the US product and working really closely with us. Daniel and their team has been great to work with and having local support staff is really important in this market. So yeah, we're fans.

Compared to how difficult it can be for our customers to get up and running with other payment providers and how quickly they can get paid out, Stripe has the potential to be a big influence on the payments space in Japan.

BTW, if you know anyone running a business in Japan and want a bilingual back-office that is easily integrated with Stripe, just look us up!

Quick stats about credit card usage in Japan for people interested.

In Tokyo, most shops and restaurants accept credit card. In other cities (including Kyoto and Osaka), only about 30% of restaurants or smaller shops accept credit card. Chain store and department store usually accept credit cards, it's just the small mom and pop shop that are taking some time. The situation is improving fast though.

Online, I have a friend managing an ecommerce there with about 400 million dollar sales per year. Right now, 40% of the orders are cash on delivery. It was 60% of the orders three years ago.

Credit card is hard to get for foreigners (like usual) and for young people without stable jobs (banks tend to be rather risk averse).

I'm happy that Stripe is in Japan because the existing credit card providers are mostly incompetent and have really stupid apis.

When will it be 2 day settlement in the EU like it is in the US. I don't get how competitors can do it and yet stripe still holds off.

Can't you request them to do that anyway? That said, I still don't understand why this is so relevant to a business?

Getting your money later means that your you are effectively giving out a free loan to whoever is holding your money. For you that's an opportunity cost because you can't reinvest the money for some period of time.

If your expenses have to be paid before you get your money this can also be a cash flow issue (or make a cash flow issue worse), when a peak in demand leaves you very profitable but unable to pay your bills because you're waiting for your money to arrive.

what's a settlement? the vendor receiving the payment?

Yes.

In credit card world it goes auth, capture, settlement. Auth happens within those few seconds when you slide your card. Capture tends to happen at the end of the business day when the "final" total is known and charged against your card. Settlement is when everything has cleared and merchants get their money.

I am very interested in how the whole system works together. Any chance you happen know of any books or guides on the subject?

"Payment Systems in the US" by Carol Coye Benson and Scott Loftesness

Isn't Japan mostly cash-based? Seems like an interesting location to expand to.

Japan is mostly cash-based for face-to-face transactions.

Online, users are extremely comfortable paying electronically. You have to remember that paying via mobile was a thing here several years before the rest of the world, so people have had longer to acclimatize.

As a reference point, Japan spent around $8B via mobile phones in 2006 (i.e. before the iphone launched).

Best i recall a large part about this was that the carriers had their own banks that could issue credit cards that was linked to the phone.

They may well have done for legal reasons, but the point for consumers was that you could find a product in a web page and hit purchase, and the cost would just show up as a line item in your phone bill, without any signups or credit card numbers.

Similar deal with NFC payments. They launched here in 2004, and were fairly widespread by the time smartphones arrived. It used to be very common for people to move "up" to a smartphone and then be surprised to find out how many features they'd given up.

Don't they also have a system similar to the French "net pay" (or whatever the name) where you can pay and have it billed on your next carrier bill? Here even Google play supports it, and while not the major payment system it does remove all friction from online payment.

I'd probably agree with that assessment, but I'd also agree that Japanese consumers will charge over $50 billion in online CC payments this year. "Third largest economy in the world" is all sorts of interesting.

I don't even have a credit card (I live in Japan). Stuff I buy online I pay at the convenience store or on delivery in cash, everything else I pay in cash or using my commuter pass (RFID).

You may live like this but this is uncommon. They are issuing cards very aggressively recently. Most of my friends have a credit card and they use it often.

Cash-based for consumer payments (especially in the countryside). Business-level payments and cities have much more extensive credit card support, and it's only continuing to become a more common payment method.

Yes it's mostly cash and there are many places (like restaurants) where they ONLY accept cash, too. So you always need to have some cash on you.

I am afraid that isn't true. At least not in big cities. Almost all shops and chain restaurants accept all suite of cards. Credit ones, prepaid, debit ones rarely because they don't issue them often. People are changing.

Most of it here is cards(credit and preload), my wife and her family very rarely use cash.

On the other hand I prefer to, difficult to find d out what's wrong when the stop workers speak Japanese and I don't haha

Interestingly, I've noticed Square is quite popular here now. On my last visit it was much more difficult to pay for food with credit cards.

> ANA (the largest airline in Japan)

Just nitpicking here but for marketing-wise, I think this is a rather unwise wording.

ANA is one of the two biggest airline companies in Japan, but they only became so in 2014, and it's fairly questionable if they can stay that way forever. The two companies are fiercely competing. By stating one of them "the largest" you're giving people an impression that you are being too pushy or not careful enough. I dunno in the US, but this is bad for potential customers in Japan who would expect certain prudence from financial companies. And apparently they just translated this into Japanese straightforward, which they shouldn't if they really care about marketing in Japan. Hope they learn these subtleties soon.

ANA is the largest airline in Japan though.

I've always thought of it as playing second fiddle to JAL. That's changed after JAL had to go through a lot of restructuring, but it's mostly been these two companies. There could be some numbers out there stating that ANA is the largest, but I'd guess there wouldn't be much of a margin.

2015 revenue from air transportation:

    ANA - 1,484,600 million yen
    JAL - 1,205,200 million yen

That's pretty clear lead, and it's increasing year by year.

[1] https://www.ana.co.jp/group/investors/irdata/annual/pdf/16f/...

[2] https://www.jal.com/en/investor/library/finance/pdf/fy2015q4...

When is the rest of EU coming up? Same regulations everywhere I can't understand the hold up.

Braintree doesn't ignore the EU like Stripe. Use Braintree.

I am using Braintree but the more options the better.

While I agree in general, for the moment the fact is that Stripe doesn't care about our business, while others do. I am emphasizing this because Stripe seems to get a lot of goodwill here on HN, in spite of them basically ignoring large parts of the world. If you point that out, people will jump to excuses and explanations (laws are complicated, etc) — which is fine, but facts are facts: as it is now, Stripe doesn't want my business.

You are right about that and even if stripe opens for business here tomorrow it doesn't mean we will switch away from Braintree. Another common issue raised on HN is that Braintree is owned by PayPal which at least to me means absolutely nothing since I never had an issue with either companies.

You misspelled Paymill, which is in fact an exact and shameless clone of Stripe.

Braintree is similar, but it evolved from an pre-Stripe type of an older convoluted platform. They still had tiered pricing just a couple of years ago. It is also owned by PayPal, so that alone can be a factor for some people to sidestep it.

Yes, there is also Paymill. And frankly, I don't care if something is a "shameless clone". I do care about whether I can do business. Ever since Stripe was created, it did not want my business, and to this day I cannot use Stripe.

Which is why I use Braintree and tell people to use Braintree or Paymill.

How does Stripe ignore the EU? It's available in quite a lot of countries here. Perhaps you mean 'ignore my specific country in the EU.'

I am glad it is available in your specific country in the EU :-)

I clearly said 'rest of EU'

There's not though. Each EU member state is a sovereign country and they each have their own laws regarding things like trans border payments. There's not even a single currency.

Estonia, Greece and Cyprus use the Euro, but unlike the other EU Euro countries aren't available on Stripe.

I haven't worked in finance, but as I understand it, the regulations are supposed to allow cross border businesses to operate. That's why the City of London banks area worried about leaving the EU and losing that right. The Eurozone especially has regulations to remove barriers to cross border payments.

https://www.paymill.com/ says it works for all of the EU except Cyprus. Perhaps an oversight?

This might be of interest: https://en.wikipedia.org/wiki/Single_Euro_Payments_Area

The EU makes it easier for more businesses to operate across borders, but banks and payment companies are still highly regulated on a per-country basis, with few real standards for having regulators talk to each other.

The main downside of not being in the EU is that it'd be harder for the banks' clients to move money to the EU, likely trigger additional taxes, etc.

There's a conspiracy theory that they're actively not rolling out to Estonia because the e-residency feature makes for a possible interesting competitor to Stripe Atlas.

I am not an expert on this topic but... The central banks of eurozone countries are governed directly by the European central bank. They are not controlled by each member state's government. Eurozone also means they all use a single currency and are all members of the single European market. There are no different laws for cross border payments.

So I guess there must be another reason we don't know about.

No expert either, but there is definitely domestic regulations in place. Besides, the eurozone is only a subset of EU. The UK has its own currency, for example.

So why isn't the Eurozone supported?

Exactly Eurozone should have been supported in one go.

Might be an off thought, but maybe a disproportionate fraud comes from the area

The wealthier EU countries are active or in beta. They're all cheaper than the US (1.4% rather than 2.9% fees), fraud is lower in the EU.

They were forced by the EU, they capped the fees

Where did you hear about this?

EU Regulation 2015/751 (http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:O...)

Consumer Debit Interchange: 0.2% Consumer Credit Interchange: 0.3%

If they didn't lower their rates, they would've been pretty unattractive for a lot of customers. (And still their rates remain quite high if you are mainly selling B2C)

I live in Cyprus which is a very small market so I won't refer to it, but knowing I can get much better rates than stripe's in Greece for example is an indication that fraud is low in the region.

Well done on the Japan launch.

Any plans to add South Africa soon?

It would be great to have Stripe on African soil.

YES PLEASE! ive beeeen waiting for stripe to come to South Africa, alot of other developers i know too are terribly frustrated of the unstable payment gateways we have down here. Stripe would be a much needed breath of fresh air.

I'm in the process of evaluating payment gateways for a Saas app that's currently using Stripe in the US, but needs to move to South Africa in the next few months. The closest I've come to something similar to Stripe is 2Checkout, but the lack proper of support for subscriptions (trial periods, product id's) is very dissapointing.

Yea, im considering using PayU while waiting for Stripe. Just really dislike the fact that they use soap services

PayU(http://payu.co.za)

PayU subscriptions:http://help.payu.co.za/pages/viewpage.action?pageId=8553425

Local newish payment processor that looks quite slick: http://www.peachpayments.com/

Haven't tried them, though.

Yes, I need you in South Africa as well!

So happy about this, I've been on the stripe beta here for a while, and the support has been amazing. Keep up the good work!

Does this mean Stripe Japan users can now accept USD, or is it still only JPY?

This does mean that Stripe users in Japan can charge in USD, or our other supported currencies. You put the currency in the API call based on whatever logic you want; we charge the user's CC in the specified currency; we credit your bank account JPY at the appropriate rate. (I work at Stripe, in Japan.)

As is typical for Stripe, this involved an ungodly amount of offline work to enable an extra query parameter that most of our customers will never have to think deeply about the implementation of.

Great news!

Just a reminder:

In Europe the main competitor is Adyen, which is basically the exact same thing, with a lower commission.

There is a truckload of marketing and news about Stripe, but really, it's nothing we didn't already have on our side of the Atlantic ;)

Congrats! Great to see the growth.

A feature that would make Stripe even more awesome would be the possibility to withdraw $USD to $USD bank accounts located in Europe without the need of losing 2% or more on conversion fees (or lower those fees!).

Looking forward to Stripe's availability in Malaysia!

Damn, patio11 got busy. Launching stuff in a whole new country for Stripe.

The Japan team was very, very busy for the last several months preparing for launch specifically and the last year getting the groundwork in place for servicing Japanese businesses. I literally arrived back in Japan the day before launch, got my business cards, and just had to do some minor translation and utility salarymanning.

Good God does this mean I can actually buy something from Japanese online shops without being hassled by international payment problems?

Great!

I like the Mt Fuji graphic.

Isn't this way too steep to be Mt Fuji?

Interesting! Japan hasn't had many startups come in for a while.

Next stop, Korea?

Reply on news.ycombinator.com