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Thanks for jumping in here so quick. I'm sure it'll be a tough thread, but something about this response rubs me the wrong way. It doesn't seem like it's really addressing the change (eg. why is it worth _existing_ customers to be paying an extra 0.5%? The fact that Stripe added features for new customers doesn't really impact those of us who have been with you for 5-10 years). Additionally, I don't recall getting an email about the price increase.

I genuinely don't even know: am I going to be seeing this price increase? Would have liked getting an email about something like this, rather than finding out on HN, and now having to dig into things to figure out if I'm actually affected (which I presume I am).

To give you a comparison: if my bank or credit card company increased their rate, I'd expect to be (and am) notified of that.

My two cents :)

I don't think this is a pricing increase? It's just their pricing for Stripe Billing. It's been 0.5% since at least 2018 which is when I started using it. I'm not sure why this has suddenly exploded on HN.

IIRC, Stripe used to have a "subscriptions" API at no extra cost. A few years ago, when they launched Billing (with the 0.5% fee), they moved everyone over to that but grandfathered in the old pricing. Now they're making everyone pay for it.

They've been chipping away at the grandfathered accounts this year.

What bothered me the most was earlier this year when they stopped refunding fees when issuing refunds. They rolled out a feature during the early days of the pandemic, and in the same week they started charging older accounts for refunds https://news.ycombinator.com/item?id=22371330

Is there anyone left that refunds fees? Paypal stopped last year and AFAIK all of the other processors also keep the fee.

Amazon payments apparently does: https://pay.amazon.com/help/201212280

> If a refund takes place, you will also be refunded the following transaction fees:

> - The domestic processing fee (for example, the 2.9% fee)

> - The cross-border processing fee (for example, the 3.9% fee)

> Note that the Authorization fee and Disputed chargeback fee are non-refundable.

So it looks like Amazon Payments holds onto the 30 cents but refunds the variable part. It's obviously not zero, but for a $100 domestic charge Amazon's 30 cents is much less than the $29.30 that Stripe pockets.

> $29.30

God I hope the decimal is just in the wrong place there

It is, but as they also added the extra 0, it indicates they were actually out by a factor of 10 in their math, it wasn't just a typo.

> but for a $100 domestic charge Amazon's 30 cents is much less than the $29.30 that Stripe pockets

Is this true?

No, it'd be $3.20. 2.9% + $0.30/transaction.

$2.90 + $0.30, you mean?

Braintree only takes the $0.30 and refunds the percentage.

I think it's because Stripe has for a long time branded themselves as being priced simply. Reading that there is a price increase, I think, warrants a noticeable reaction, since it could mean a new 0.5% cost for every business relying on them.

That can be a lot of money for some people, and in general, I'm a bit disappointed that I found out about the Billing product increase through HN. I would have expected to get an email from Stripe, maybe a month ago, saying "Hey: our rates are going up on 12 November"

The changes would absolutley not go into effect today—they would start next year, January 15, 2021.

Thanks for the clarification on the date of prices going up

Careful. They might want to develop one more dashboard - showing you structure of the fees and their changes. Brace yourself for another 0.5% fee to pay for it

Yes, you'll be emailed—if you were on the old Subscriptions pricing and are using Billing now, the emails are going out now (most have already been sent). Email me at edwin@stripe.com and we can also check.

And to be crystal clear, the emails should be done sending today. The changes—which will take effect on January 15—only apply to businesses that have had at least $1M in lifetime billing volume (or will cross that threshold this year). All others can continue to have Billing for free.

If this million dollar threshold had been made clearer, I imagine a decent chunk of the people who are upset by this change would have reacted differently.

Cool thanks

We think charging a separate fee for our Billing product is fair, given comparable products in the market (say, Recurly or Chargebee) charge something similar.

Copying what other people in the market are doing is the antithesis of what made Stripe so important when it first launched.

Processing margins are thin and they have a valuation ($36B) to justify, so they have to grow product margins where they can ("going upmarket"). Market realities/constraints.

That only works if you have a number greater than zero to multiply your margin by, though. Stripe is already relatively expensive among the payment processing options we have available. In the early years, that premium was justified for us because Stripe was also much easier to set up than anyone else at the time. But that was nearly a decade ago. Today, there is far more competition from other payment processors, while the experience of using Stripe as a merchant is far worse. I'm assuming that they've simply decided to focus their business on the larger merchants who are obviously worth much more to them individually, but those merchants surely have negotiated rates below headline and won't be paying an extra 0.5% for this either, so it's a puzzling move.

Well, if you start comparing yourselves to chargebee, they have a far more complex product - and really impressive traction in terms of new features being released regularly - combined with a really super support. I have not even seen a single company that deliver on the same level as chargebee does.

I've had to run a number of price changes (mostly increases) over the years. In case the folks with pitchforks are unclear, your mistake was not clearly communicating to your customers. Every impacted customer should have received an email that explained the change, how much their bill would increase, and a timeline for the increase that would give them a few months of runway make other plans.

However you sugarcoat this, it's essentially shifting long term wealth away from your customers and into your pocket. People aren't stupid.

Hopefully this triggers more competition.

Recurly and Chargebee both provide helpful things like multi-currency support, which AFAIK Stripe Billing does not.

At least this was true last time I looked into this.

The economies of scale that Stripe is now benefitting from doesn't make your reasoning sit with me very well.

How about: they're increasing the price to X because that's what they want to charge. They think price X will help maximize the long-term value of the company.

Sure, they can say that and be honest instead of trying to marinate us with these gymnastics; it's insulting too that they believe we can be manipulated like this.

I think the war on nonsensical marketing speak has long since been lost

What’s the manipulation? I’m not being a wiseass, I genuinely can’t see it.

Yeah I mean, maybe being larger as a financial institution has some costs also. Primarily that it sucks. I interviewed at a hedge fund that had to submit (something) to (some regulatory body, don’t remember) because it was too systemically important. But they required dedicated staff to handle the regulatory burden. Given how tightly staffed that place was it was actually a meaningful portion of headcount measured as a percentage.

Maybe some of those economies of scale are only 80% realized if you’re a financial institution. And rightfully so.

Don’t have a horse in the game here re: Stripe, just hoping the damn kids will go on someone else’s lawn.

AWS doesn't charge anything for elastic beanstalk beyond the standard price for resources, even though of course competing products like heroku charge a lot more. I'm not arguing about fairness, I'm sure that's not a concern for AWS either, but if you have a basic product with solid margins, doesn't it make sense to account something you build on top of that product as marketing or documentation, rather then as a distinct product that has to pay for itself?

Awesome, I setup subscriptions using Stripe for a website a few months ago for the first time and was so turned off by how convoluted the process was I was actually thinking about emailing Stripe to suggest they take a hard look at the process and how to make it easier. Glad to see that was already underway, great work!

> Payments is a low-margin business and our customers are (quite reasonably) very price sensitive.

Thanks for tackling a low margin business!

I always look at people like they have two heads when they pitch something like that.

At the end of the day, you're using electricity to send around a bunch of 1's and 0's. The amount of electricity used doesn't change much whether it represents $10 or $100,000...so why do you need a percentage of the total?

I understand existing banking structures already work on the percentage model (so there's probably downstream percentage-based charges Stripe must pay), but why can't this entire banking structure be disrupted to transfer that value back to society?

Cost-based pricing rarely makes sense for software products, as almost all products are just “sending around a bunch of 1’s and 0’s”. If that were the case, almost all software would cost just pennies a month.

I’m not a fan of Stripe’s price increase for recurring plans either, and I think they could’ve communicated it better, but their pricing is far from unreasonable given the amount of research and engineering effort they put into the product that I don’t have to do myself.

The majority of most business' costs do not primarily scale with electricity usage.

It can be, but one of the big guys will buy you and raise the price of your product.

To clarify, is "Stripe Subscriptions" a subset-of/component-of/deprecated-into "Stripe Billing"?

Correct — Subscriptions was the really old one. Two years ago Billing was rolled out as Stripe's separate product for recurring charges and invoice management (https://stripe.com/billing).

Thanks, appreciated. I notice that the post title has been updated to clarify that as well (wasn't me, but glad someone did!).

Mod thread on title change here: https://news.ycombinator.com/item?id=25073970