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Comment by ttcbj | Hacker News Reader

Exactly. I signed up with stripe maybe 5 years ago. At that time, I was trying to find a processor, and came close to signing with a bank. The bank wanted me to sign a long-term agreement, the agreement had disadvantageous and confusing terms with unclear costs, and it was more expensive than stripe at baseline. The sales process was really sleezy: I only discovered all those terms because I read the contract carefully before signing.

Before that I used two other processors, both of which had a confusing mix of monthly and per-transaction fees.

If you are a very, very large business, maybe you can do better than stripe. But if you are small or even medium size, I am skeptical there is a better deal out there.

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Even a small business can easily do better than A (when it comes to fees). The only time stripe would be a good deal is if you are processing almost exclusively high end corporate cards like Amex or corporate purchasing cards.

Stripe and others like them is also the best rate if you are processing very small annual amounts. Because every merchant account has around $10 in monthly fees, minimum. If you are not paying a monthly fee, either your processor is paying it, assuming that they will make enough on the spread to make up for it, or they are running your processing under their own merchant account and taking on the risk. Which is likely what stripe does until an account is large enough to warrant moving it under its own merchant account.

Here is an example of a relatively expensive rate for processing with a merchant account (2% plus 10 cents per transaction, with a 10 monthly fee) versus Stripe. Note how the breakeven for getting a merchant account is when you start processing more than $428 a month(assuming an average transaction is $15).

https://www.desmos.com/calculator/zuzn1lhfdg

My experience in the U.S., admittedly as a very small size merchant, is that 2% +10 cents is considerably better than I can get with a bank.

Banks have 2nd tier offerings for credit and debit processing that don't focus on gaining customers with low rates. There are a handful of platforms, First Data, Tsys, Elavon, Worldpay/Mercury & Heartland, and everyone who sells merchant services is selling you access to one of those platforms.

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