Hacker News Reader

Comment by axg11 | Hacker News Reader

Three interesting implications from this press release:

- Stripe as the first user of the SDK vs Square: For any small business starting this spring, I can't think of a reason why they wouldn't use and iPhone+Stripe to start off. Zero hardware cost (assuming they have an iPhone), no need to wait for hardware delivery.

- NFC will be coming to the iPad.

- The ability to keep the same hardware but switch payment network lowers switching cost for small businesses. Payment platforms will have to differentiate on ecosystem as well as cost.

View on HN

Presumably companies like Square and Clover are selling their own POS hardware and probably are less than happy that every iPad and iPhone running latest OS with NFC is now a competitor to their hardware. Stripe does not make hardware (as far as I’m aware) so this initial partnership makes sense.

I'd imagine for these companies the hardware is a necessity to get customers into their payment processing business, could even be a loss leader rather then a profit centre. If a lot more people now have a potential POS device in their pocket it could expand their markets quite a bit, although other payment processors who formerly didn't want to or couldn't make hardware may now become competitors

Stripe does have a physical terminal too (https://stripe.com/terminal) but I've never seen it at a merchant.

Huh, I did not know that, I’ve also never seen one out in the wild.

You probably have. They're completely non-desccript and unbranded, unlike most other POS solutions, so you're likely to not remember it.

I just recently noticed some- Jimmy John's uses the stripe Verifone reader and Toast tablets use the BBPOS Chipper (but this may not be thru stripe). These readers are "stripe-compatible," but not exclusively for stripe.

2018: "Square become Stripe, while Stripe becomes Square"

Stripe's bread and butter is payment backends, while Square was the point-of-sales system

https://news.ycombinator.com/item?id=18007454

No software company wants to sell hardware outside of Apple. They only do so when forced to support their services. Software scales with a marginal cost of $0 and is much less messy.

Before smart phones and generic hardware was a thing, I worked at a company that wrote software for field services (“sending people places to do things”) we had to resell and maintain custom ruggedized windows mobile devices, mobile satellite receivers (cell phone data wasn’t reliable), etc. We were glad to transition to generic smart phones. At later jobs, when I worked in the same space, we used generic Samsung Android tablets.

Microsoft doesn’t even really care if you buy an XBox, it’s a loss leader. They would be more than happy if you bought their subscription gaming service and ran it on someone else’s hardware.

> No software company wants to sell hardware outside of Apple.

You're right, but it's a strategic mistake. Hardware comes with more loyalty and brand awareness. How many consumers are aware of Square (cute little hardware squircle) vs Stripe? That brand awareness allowed Square to launch Cash App.

I think this extends to the rest of big tech too. Amazon and Facebook would do well to learn from this. Amazon and Facebook's most favourably viewed products are all hardware (Alexa, Kindle, Oculus)

Amazon doesn’t care if you buy a no margin Alexa device. They will gladly license Alexa to all comers. Kindle is available everywhere. People are “loyal” to Kindle not because of the device that relatively few buy, but because their whole library is tied to the Kindle app that runs everywhere.

No software company wants Apple to be anywhere near their business either. Apple greedily takes 30% and owns your customers.

Apple is bad for business. When they come to your industry, be afraid.

Let’s be real, the only companies paying Apple 30% are the pay to win games selling loot boxes. That’s where most of the profit in the App Store comes from. It came out during the Epic trial.

Software companies like MS, Adobe and most of the streaming services don’t even allow you to pay for access through the App Store.

Anyone selling physical good if they are using any sort of Apple payment, they are using Apple Pay and paying standard credit card processing fees like Uber.

As far as Tap to Pay, they are charging the standard merchant amount that all other payment facilitators charge.

As far as “owning your customer”, I don’t want every Tom, Dick and Harry to have my personal information. I use “Hide My Email” whenever possible. Owning your customer also means jumping through hoops to cancel (see NYT).

Apple paid out over $60 billion to developers last year: https://techcrunch.com/2022/01/10/apple-paid-out-around-60-b....

Yes, Apple is huge multinational company that pays a little taxes as it can legally get away with; however, as of 2017, it was the largest tax payer in the world: https://www.apple.com/newsroom/2017/11/the-facts-about-apple...

Stripe’s fees are pretty high though so that is certainly one reason small businesses may avoid it. Sounds like Apple is adding more processors soon though so it will be interesting to see how the space places out.

A small business is low volume, hence going to have a hard time getting good rates. And they're also constrainted on resources, so the extra effort to get a few points off may cost more than those points (as written above – they're low volume. The cash value for a bp is much lower for them than for a high volume business)

No doubt, you can get ~2% processing and no flat fee even with low volume but what you get isn't as polished as Stripe and takes some more development work to integrate/use.

I imagine this is going to built on top of the existing Apple Pay infrastructure which means any payment provider that works with Apple Pay will probably (eventually) work with this. There are a good number of places that work with Apple Pay.

There are established people in this space with very easy to setup solutions, like Zettle (PayPal) for example - who also offer connected receipt printers, barcode scanners, tablet/phone terminals and integrations with ecommerce, accounting and so on. The only real advantage I can see Apple having is if they charged a lower transaction fee, but it's going through Stripe, so no - 2.9 % + 30c versus 1.75 %. I don't think waiting for hardware is a major factor - you can get a terminal shipped next day if you want.

I mention Zettle because it's hugely popular in the UK. A lot of market traders use them, which has probably saved a lot of businesses that would traditionally be cash-only. COVID has helped to encourage cashless purchasing too. Europe generally has always been pretty ahead with contactless payments (Zettle was a Swedish fintech before PayPal bought them).

Stripe might lower their rates for Tap to Pay. I also think you underestimate the friction of getting extra hardware for a small business and the advantage of using hardware you already have (iPhone).

This is also going allow trivially easy bitcoin payments at some point: https://9to5mac.com/2021/12/28/comment-tim-cook-said-apple-i...

I believe SQ most basic card reader is free, so hardware cost is not really a competitive advantage here.

Wait until small businesses discover that Stripe keeps the full 3-4% fee even when issuing refunds. This makes Stripe unsuitable for many types of small business, like clothing or electronics stores where customers are accustomed to be able to purchase items with the intention of returning all or a portion of the order. Square does NOT charge this fee, which makes it a much better option.

Reply on news.ycombinator.com