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Comment by dtech | Hacker News Reader

As an European, my biggest wish for most SaaS vendors is an alternative to credit cards payments. SEPA Direct Debit or normal bank transfer after the invoice would be a godsend.

Credit cards are much more uncommon in Europe (people use debit cards, business get invoices paid through direct debit), and using credit cards for ongoing operational expenses is unheard of. This has caused a lot of friction with the accounting department of the companies I've tried to introduce some SaaS.

Usually, the solution is that one specific member of staff gets a personal corporate credit card and has to do tedious declarations and administration.

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As a SaaS vendor with customers in the EU, bank transfers have been a huge pain for us. We have to log into the bank website to confirm we’ve received an amount. Then we have to match it up with an invoice, mark it as paid, etc.

Conversely, with a debit/credit card that’s all automated. No manual labor involved.

Could we automate international bank transfers? Probably. But customers end up using a debit/credit card because it’s the only option offered.

We recently rolled out ACH bank transfer payments (US only) and offered an amazon gift card for anyone who wanted to switch. <5% of our customer base utilized this option.

European accounting and/or invoicing software can automatically read in your bank statements, detect paid invoices and mark them as paid, no manual work!

Choose a bank with API. My bank has it and it is easy to automate this process.

Any recommendations?

Czech Fio banka is the one I use, http://fio.cz Allows you to create read only or full access tokens.

After PSD 2 directive comes into effect (expected 2019?) all European banks will have to have an API.

Actually we’ve been prepping for 2018 launch.

Who is we? :)

The world is small... I always liked Fio, they had documented API and you could do whatever you wanted even in ages, when other banks insisted on using their software.

Soon or later all banks in Europe because of psd2.

You might also want to check out figo and fidor.

GoCardless (YC S11) allow you to accept direct debit payments across Europe:

https://gocardless.com/

This is not available for businesses based in the USA[1]. Also, the maximum amount for a single transaction is €5,000, which is inadequate for many (most?) B2B SaaS products.

[1] https://gocardless.com/faq/merchants/international-payments/

[2] https://gocardless.com/faq/merchants/

edit: link #2

Even in the US, I can't pay a $5000 invoice on a credit card. That's over the threshold where either they accept a purchase order, or we can't use them at all.

You may want to look into the SEPA direct debit system. It lets you send a file to your bank to request transfers and they send you back a file with the results.

You have to register for a debitor identifier and ask your customers for permission to debit their accounts first but overall it works well and can be automated. It's the standard way to do direct debits in Europe.

Direct debit doesn't work with all companies, it certainly would not work with ours. It gives too much control to outside parties.

Within SEPA direct debit, you can reverse a charge if it was unwarranted.

In my experience, it's a lot more common and accepted than credit card business payments in Europe.

> have been a huge pain for us

Opportunity, business idea seekers!

This! In a world where very startup tries to deal with "sexy" problems like ML, AI, blockchain / distributed ledger, ... there is a lot that can be done to just ease the problems real enterprises have. This is for sure one of them - payment processor which takes CC and SEPA, with proper API and automations.

Stripe offers SEPA

well blockchains are about payments

Stripe offers SEPA in Europe, but I believe it’s still in Beta. We integrated it, but after having some trouble with the equivalent of chargebacks, we measured customer adoption compared to credit cards and PayPal in Europe and didn’t see a big shift. We pulled it out. We’re a B2C though so it could work for B2B more reliably I imagine.

after having some trouble with the equivalent of chargebacks

Would you share more details about this, if you can?

I'd also be interested to know more about this - I would have thought such behaviour would be comparatively rare for B2C.

Gah, sorry, just ignore me, I mixed up B2B and B2C!

not sure if it fits easily into a HN comment, so feel free to drop me an email. Things might have changed or improved since.

Generally, it's way too easy to reverse a SEPA payment for a customer (up to 8 weeks if I recall after purchase). It led to some, admittedly rare, cases where we can issue a refund to a customer and then they'll reverse the payment as well. So we ended up with negative revenue to the same amount of what we charged, which can be up to 190 EUR. So we'd actually refund 190 EUR and then lose another 190 EUR + Stripe chargeback fees on top. Ouch. There was little or nothing we could do about it apart from begging the customer to transfer the money back to us...

On top of that, there were chargeback fees even if the bank, rather than the customer, reversed the charge. This happens not too infrequently (IIRC around 5% of transactions). If this was a credit card transaction, the bank would simply decline the charge. With SEPA it's not as simple... The charge gets through, supposedly, and then bounces with a chargeback fee...

Thanks for the insights. Ironically, we've been looking at accepting SEPA for European customers primarily because card payments haven't been great for us in terms of reliability. We've never had a problem with UK customers paying by their version of Direct Debit, where there is also an automatic right to reverse a payment, and certainly not with banks reversing charges without customer intervention, so it's good to know this is something we'd need to watch out for with SEPA.

As far as I know, Stripe SEPA is only available in EUR currency[0], so this nearly excludes the UK completely. At least for us, all SEPA payments were outside the UK. Probably 95% from Germany and Austria, and the rest from a few other EU countries. Not a huge sample size, but we've been running with SEPA for a few months. We did an A/B test for a a few weeks as well, and basically observed no hit in total revenue when we offered SEPA or without it (only cards and PayPal), so that was the main reason we pulled out the plug. Not just the chargebacks.

Another thing I should mention is the async nature of the whole thing. Unlike cards that get authorized/declined instantly, we're talking days or weeks with SEPA. For a monthly subscription, this eats into the first month easily.

Again, we're talking about private individuals here (B2C), typically students in our cases, and as I mentioned predominately from Germany, so YMMV a lot with other customer types or countries.

[0] https://stripe.com/docs/sources/sepa-debit#create-source

Thanks again. These are all interesting data points. There are certainly a lot of similarities between what you're describing and what we were envisaging setting up. The lack of increased revenue when SEPA was available is particularly worrying, as we know in our case that from time to time we get requests from customers who don't use credit cards, and we were hoping SEPA might be a more accessible alternative for that part of our market.

feel free to drop me an email and I'd be happy to answer any questions if you have (see my profile)

I think it depends on the country. Here in Denmark, everybody has a credit card – actually a "Visa/Dankort" – where our own type of card (Dankort) is combined with a regular Visa CC. However, those under 18 either have a Visa Electron or MasterCard, which are debit.

I was mostly talking about business customers though. Do all businesses have company credit cards for operational expenses in Denmark?

Interesting that people in Denmark use a credit card, although Wikipedia seems to imply it implies as a debit card inside Denmark? [1] I know debit is definitly more common in the Netherlands, Belgium and Germany.

[1] https://en.wikipedia.org/wiki/Dankort

I rarely had problems with customers using a credit card. Had to be sub $10k/month otherwise we did an invoice. Invoice weren't difficult, just required a little more effort.

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