An open letter to Stripe: please come to Europe | Hacker News Reader

An open letter to Stripe: please come to Europe

blog.handcraft.com

292 pointsprimigenus94 comments

Many people may not realise this, but Europe is the largest economy in the world according to the IMF, who know a thing or two about this stuff.

Since I saw Stripe last week, I've been wondering why no one in Europe has managed to put something similar together. We have the technical expertise and the world largest economy, so what's stopping us?

Sadly, it turns out that Europe is so fragmented and disparate when it comes to banking practices that the benefits of working in the worlds largest economy are completely obliterated by the difficulties of working with all the countries involved, many of which are so fundamentally corrupt (I'm looking at you Italy) that any sane legislation is unlikely to go through.

Stripe may well cobble together solutions for individual countries like Germany, France and the UK, where there's enough money flowing around to warrant it, but the return on investment quickly starts to diminish as you tackle the smaller countries, which is not really a great incentive for Stripe to "pull their finger out". I'm not saying they wont (they've already said they will), I'm saying the incentives aren't all that great. And they're even worse for anyone wanting to implement a homegrown solution because we don't have competitive advantage of the US economy to start from.

It would be nice if everyone in Europe had the Euro, and everyone in Europe also had the same banking practices, but if you rank that possibility on a scale of 1 to 10, the scale explodes.

One alternative I can see happening however is for some savvy EU state to make it ridiculously easy to open up business accounts, with multiple currencies that anyone in Europe (if not the world) can open and run their business through, with the easy transfer of cash from country to country. Other than bureaucracy, I don't see what's stopping them.

In fact, the commercial banks could well be eliminated from the equation. The value of the digital economy is important to any countries future growth that the central banks could plausibly take the initiative here.

It's a bit dubious to say "Europe is the largest economy in the world", because it's not really a single economy, more a collection of economies of varying sizes, with different currencies, laws and banking systems.

You also have to be careful of what you mean by 'Europe', because there's the European Union, the European Economic Area, Europe the continent, Europe as used in the UK (which often means 'all those other foreign countries but not us' :) etc.

The GDP of the European Union is about 16 trillion dollars; the United States is about $14 trillion: http://en.wikipedia.org/wiki/G-20_major_economies. What's a couple of trillion bucks between friends? ;-)

Who cares? Canada and Mexico account for a trillion each as well. The point is, European Union is not one country.

Indeed. The post's third paragraph explains very nicely why it cannot be considered a single economy.

Stripe may well cobble together solutions for individual countries like Germany, France and the UK, where there's enough money flowing around to warrant it

For germany I feel confident to claim that any projections you could make about ROI should more than warrant it.

Our payment-landscape consists of a crippled paypal and an array of absolutely atrocious gateways (wirecard, ogone, adyen, moneybookers etc.), all of which are firmly stuck in the 1990s in each and every regard.

Whoever moves first with a sane payment-solution will enter the world's 4th largest economy with effectively zero competition.

For germany I feel confident to claim that any projections you could make about ROI should more than warrant it.

I have a suspicion that Americans tend to underestimate Germany, thinking of Europe as something that might be comparable to the US, and Germany as only a small part of that.

In reality, Germany has 80 million people - similar to California, Texas, and New York state put together, and is as you say the world's fourth largest economy.

They also much prefer German over English, so it might well be a good investment for many startups to have a German English student translating their site.

    It would be nice if everyone in Europe had the Euro, 
    and everyone in Europe also had the same banking 
    practices, but if you rank that possibility on a 
    scale of 1 to 10, the scale explodes.

Even just supporting the Euro zone will already be good progress, as it covers most of the wealth in Europe.

Well the Euro brings it's own headaches. Just look at Greece.

Also, the Euro currently has some notable big European countries excluded: UK, Switzerland, Norway, Sweden and Denmark. These countries alone had a combined GDP of almost $4trillion in 2010:

http://www.wolframalpha.com/input/?i=gdp+uk+%2B+gdp+switzerl...

And that doesn't even account for eastern European countries.

just look at Greece

What does this mean? We're talking about end user credit card purchases over the web, not the sovereign bond market!

The post I was responding to said:

"Even just supporting the Euro zone will already be good progress, as it covers most of the wealth in Europe."

The point I was making was that even if Stripe supported the Eurozone countries, that could have it's own problems too. That probably wasn't too clear. The Euro could well slide massively in value versus the dollar which could impact Stripe's expansion to Europe, as there is huge uncertainty about the Euro here at the moment. I mean would you look forward to expanding to a region whose currency could actually collapse?

The US almost defaulted when it almost failed to raise the debt ceiling. Should people stop serving the US market because of that?

I used to work in Payments at Amazon and I don't think people have an appreciation for how complicated and expensive payments in Europe can be. Credit Card penetration in certain countries (Germany and Switzerland for example) is really low and to get competitive rates you'll need a processor in the UK, France, and Germany. Then, when you have a problem, I challenge you to get technical support from a French bank after 5pm and, while you're at it, make sure you have someone on your team that speaks French.

At least it's better than Japan though.

How does it compare to Japan?

Some things are better left unsaid.

No, really I'd rather hear. We're about to launch a product in Japan and all the advice I've been given from folks in Japan so far is that my standard credit card payment processing will be fine for our target user base. So, seeing a comment like the one in the parent post definitely caught my attention. If I'm going to be missing the mark, I'd rather find out now.

Credit card penetration is really low so your other options are bank transfers and CVS (paying at a convenience store). COD is actually quite popular but I can't imagine any SaaS could implement that effectively.

I don't have any experience with direct bank transfer systems in Japan. I believe that a lot of Japanese Banks now offer NetBanking as a payment option for CVS payments but I'm not sure how widespread the use is. I'm also not sure what is culturally common in Japan for billing recurring online services.

Perhaps someone on HN who lives in Japan could comment.

Not sure who you're using as a gateway but I do have memories of being on the line with technical support and a Japanese translator.

Best of luck to you!

I have paid through bank transfers a lot in Japan. Instead of just needing a name and an account number, additionally you need to know name of receiving bank and the branch of that bank the recipient uses.

Looking at the last two payments I made, it seems reference codes are not used. How the businesses know which order a payment relates to is a bit mysterious to me. I suppose someone looks at the accounts and tries to match by sender name and date.

As far as I know, Eurozone businesses and individuals can have their bank account anywhere in the Eurozone. Paypal and Stripe may only have offices in Luxembourg to serve all EUR countries. That's the upside of a unified market. The UK and other non-EUR countries have renounced to it.

You don't even have to be in the eurozone, I know UK companies which have euro accounts with international banks such as HSBC, which sit alongside their sterling accounts. The same goes for dollars, and probably other major currencies as well.

Patrick from Stripe here. We know how important that is. I personally grew up in Europe (Ireland), and 5 of the 10 people at Stripe grew up outside of the US. It sucks that we're US-only right now.

We're actually working on supporting Europe right now. It's pretty complex, and won't happen overnight -- but it's one of our very highest priorities.

If you'd like to be notified when Stripe is available wherever you live, you can leave your name at https://stripe.com/help/global. We'll also announce news at twitter.com/stripe.

Anyone that has tried it knows just how hard it is for pan-european payments across the 'single-market'. For some reason since we've been able to define common european legislation for the curvature of bananas(1), but not for stuff like payment transactions.

But this is what makes your offering from being a nice friendly API and "payments that don't suck" (which are largely just nice-to-haves) to something that is completely compelling and truly-enabling and revenue generating (e.g. opens up new markets)

The competitive landscape in Europe is also from the previous era. Anyone that had integrated with something like RBS Worldpay will which looks like it was hacked together in a bit of Perl(2) in 2000 and never changed.

Footnotes: (1) Commission Regulation (EC) rule 2257/94 states bananas must be "free from malformation or abnormal curvature

(2) I have nothing (that major!) against Perl, but it kinda summarises the kinda person and era that it was written in.

Hi Patrick. Please take a look at the possibility to also support Brazil. There is a huge market here and the current solutions (Pagseguro and Pagamento Digital are the biggest atm) are far from good enough. A simple solution like Stripe would be awesome.

This is a difficult problem in Europe and fair play if you can get it done. I have some friends who built the software behind Sentenial which does DD processing in Ireland & Europe. Their CEO & CTO was scared away from adding in CC processing into the mix because of all the complexity. Not that this should necessarily scare you, just go into this with your eyes wide open. If nothing else, this is a bureaucratic minefield.

As a fellow Paddy, I salute you. Looking forward to the service being available in Ireland.

It's not like Stripe don't want to come to Europe. In fact, they tried to start here:

  Actually, the first bank we ever talked to about @Stripe was Irish.
  They did everything short of laugh.

https://twitter.com/#!/patrickc/status/119849024600801280

Ireland's banks are run by clowns, makes a change for them to be doing the laughing.

Now they are all owned by the state. So you have government beurocracy to deal with now. Smart Economy, schmart economy.

Only because the private owners were so bad at running a business that they bankrupted them, though. It will be quite a trick to see if the state can run them even more badly. Quite possible, but the bar was set high.

No, this just means it was a bad place to start :). We will definitely come to Europe.

Guys, they're working on it. It's not something where if enough people write letters, they will magically be able to set up shop in Europe. Accepting payments in multiple countries is hard, and all the pain you had to go through to get your payments to set up, they're having to go through and more. So you don't need to remind them every forty-five minutes that you want them to come to Europe/Africa/Asia/wherever.

Yes we do, because companies set their priorities based on feedback. If we all kept silent they would (justly) assume that there isn't much demand for a solid CC provider for Europe, Canada, India, etc and act accordingly.

This only applies if the company has not already set the thing in question as a priority. After they have already announced that "yes, we are planning to do this, it's something that is very important to us, but it's going to take a while," you don't need to keep pestering them about it.

It's amazing that in 2011, launching a simple and elegant payment processor is enough to pretty much disrupt the industry. I'm really hoping Stripe can make it to the UK - I'd be incredibly happy to give them my percentage.

Damn! i was in the middle of writing my "An open letter to Stripe: please come to Asia" post.

Looking forward to a post titled "An open letter to Stripe: please come to Africa" in some other blog any minute now. :)

Seriously, this is a hair on fire problem for non-US entrepreneurs.

Please become BFFs with HSBC since they are present EVERYWHERE.

They're working on it:

  http://news.ycombinator.com/item?id=3056105
  http://news.ycombinator.com/item?id=3053971

I suspect it's more of a legal/business challenge than a technical one.

When I was working on Gucci.com, Europe was always the biggest problem for payments, each region has different tax law, different payment gateways, shipping laws. Big opportunity to tie Europe together but I don't think its something a startup can do, more intercountry commerce laws need to be made to make it easier.

I dont know why the author thinks the situation is any better in the UK. Its pretty bad here too. A common requirement of getting a merchant account is to have £50,000 sitting in an account doing NOTHING, "just in case". UK online payment processors aren't much better.

Because when we looked for payment processors that supported Europe, most of them only supported the UK, not mainland Europe. So I assumed it would therefore be easier to get set up if you're in the UK. I'm not saying it's easy in the UK, just that it's probably significantly more troublesome elsewhere.

It is better in the UK (than Ireland). At least you have PayPal's Website Payments Pro which many subscription services/code/widgets can use. Ok, it's not ideal but it's doable.

In Poland (Europe) there are plenty of Stripe-like services for several years now. They mostly integrate all online payments (online wire transfers, credit cards) but also offline, where you can pay in your local shop, post office or traditional bank transfer. Virtually all banks in the Polish marked are handled. Almost no e-shop will handle payments themselves, especially that integration modules to most of e-commerce software are provided. Therefore I wonder how can it be so different in other parts of Europe?

Some samples: - http://dotpay.pl/index.php?content=&newlang=en - http://serwis.platnosci.pl/home,462.html - http://www.przelewy24.pl/en - http://www.payu.pl/ - ... and many more

Define "Stripe-like". The point here is a developer-friendly, full-stack service with a simple payment setup (2.9%+30c is a great start). It feels... modern. The websites you link to feel similar to every other service we trudged through trying to find something good. Sure, they might work. But are they how you'd design them yourself?

OK, I might not understand what is so special about Stripe. But as for cost they charge for transactions, for typical payment channels 2.8% + ~10c (0.30 PLN), but may vary on some payment channels. There might be a minor activation cost of about $3.

These services are to Stripe what a paper checkbook is to instant wire transfers. Yes, it's all kind-of about accepting money. But to point out just a few of the differences:

1) none of the existing services store credit card numbers, which means you have to run your customers through their horrible redirects and web forms every time they want to purchase something,

2) none allow subscription charging (see also (1) above for the reason why),

3) did I mention the horrible web forms, silly redirects, abysmal failure handling and overall user unfriendliness? Did I mention that they display ADVERTISEMENTS on their payment pages? I'm not kidding.

4) there is no developer API to speak of. You just redirect your customers to their horrible sites, cross your fingers and pray. Some of them might pay, some of them might even come back.

If Stripe were to become available in Poland, I'd switch in an instant.

OK, I see the point now.

It's sad that we live in 2011 and still have to use something like PayPal to do "easy" payment processing. Unless you process a reasonable amount of transactions, forget simple payments. Stripe, where art thou :(

Considering this, I don't understand why bitcoin does not get more followers.

Because people don't use it. There's no point asking your customers to pay you in something that they don't have, that they don't know how to get, and that they don't understand.

And once the "no chargeback" thing stings a few mundane non-techies, they won't use it any more.

(tries to) Solves a different problem

Immediate and no-cost solution to transfer funds. how is that different ?

Because most people don't regard bitcoin as funds. That perception could change of course, or work for a different non traditional currency. The traditional thing to do is to have guaranteed convertibility until it takes off - I remember a story about Hong Kong having a jet full of dollars in cash to guarantee convertibility when the Hong Kong dollar was fixed against the US dollar, though I cant find any evidence that this is true...

How is that different from "let potential consumers of my service/app pay me"? Do you have to ask?

Unless of course you have an app that can survive of the (relative) tiny amount of people who use Bitcoin. You might, but you'd have to admit that you're an outlier :)

Does the 'average person' even know Bitcoin exists? Could you explain it to them in a way that doesnt't make it sound super-dodgy? That's why.

To someone that want to understand it : "It's a currency that is entirely electronic and works thanks to crypto-magic that experts agree is solid. It has the advantage of not being controlled by any central bank and has a guaranteed scarcity."

To someone that just wants to use it : "it charges transfers from and to dollars but unlike paypal charges zero for transactions."

You're assuming that the phrase "crypto-magic" is reassuring instead of off-putting. 'The general public' and 'readers of HN' are basically non-overlapping sets.

My mom has a credit card. Would she use Bitcoins? Not in a million years.

"military-grade encryption" works in the same way.

When you use terms like "experts agree is solid" and imply that its very safe with crypto, you, I and other techies will know about the cryptography behind it. However mundanes will think that third is a very reliable system, i.e. something that they can rely on.

When they get stung by a scam on eBay, try to get their money back, and are told there are no chargebacks, that BitCoin is the same as putting some banknotes in an envelope, and that there's no way for the police to track down where the money went (paper envelopes aren't even that bad), that their money is gone with absolutely no recourse, when this happens, they will not think BitCoin is in anyway reliable.

At the moment you can only sign up with a US address. As a stop-gap solution could they enable European addresses but with the caveat that you'd only be able to take payments in USD? This would be fine for me.

I imagine that converting between currencies is by far the smallest part of the problem. Much more important are complying with the various regulatory regimes that exist for credit card transactions in different countries.

Open letter to non-Americans: Build your own Stripes.

"Many of us at Stripe are from outside the United States, and we understand just how broken the international payments landscape is."

https://stripe.com/faq

So non-Americans are in fact building Stripe itself. Plus America is a single, relatively homogeneous market, whereas the EU and Asia are far more fractured, complicating things massively. So it's much easier to launch in America first.

You get my point though, don't you? It's not about Stripe or the specific problem of payments. It's about solving our own problems, instead of waiting for some American startups to do it for us. Fractured and complicated things are opportunities, not just problems.

" Fractured and complicated things are opportunities, not just problems."

Maybe, but when you are talking about dealing with different currencies, banking regulations, languages, laws, cultures etc. it's mainly just problematic.

From pg's essay on "Why startups condense in America":

8. America Has a Large Domestic Market.

What sustains a startup in the beginning is the prospect of getting their initial product out. The successful ones therefore make the first version as simple as possible. In the US they usually begin by making something just for the local market.

This works in America, because the local market is 300 million people. It wouldn't work so well in Sweden. In a small country, a startup has a harder task: they have to sell internationally from the start.

The EU was designed partly to simulate a single, large domestic market. The problem is that the inhabitants still speak many different languages. So a software startup in Sweden is still at a disadvantage relative to one in the US, because they have to deal with internationalization from the beginning. It's significant that the most famous recent startup in Europe, Skype, worked on a problem that was intrinsically international.

However, for better or worse it looks as if Europe will in a few decades speak a single language. When I was a student in Italy in 1990, few Italians spoke English. Now all educated people seem to be expected to-- and Europeans do not like to seem uneducated. This is presumably a taboo subject, but if present trends continue, French and German will eventually go the way of Irish and Luxembourgish: they'll be spoken in homes and by eccentric nationalists.

http://www.paulgraham.com/america.html

So a payments company like Stripe (or any other type of company really) could be commercially viable in the US by capturing a certain percentage of the market there. But to achieve the same level of success in Europe, that same startup would have to gain a foothold in multiple countries. So expansion takes more time and is more complex and difficult.

"Where there's muck, there's brass."

Exactly my thoughts. Lack of Stripe (or equivalent) in someone's country could be an opportunity, not an obstacle.

Please come to Asia too. Start with Hong Kong/Tokyo/Singapore and then go from there.

Not fair, in Indonesia we have more people than those countries combined. But I guess if they do cover Singapore, then for me it's just a matter of opening a branch there no?

If one looks at the latest FB and Google surveys one will find that one of the biggest untapped markets is India. Unfortunately, all these startups that really want to grow big aren't seeing the big picture - and I don't mean just the ones that have started recently. There are many that have been around for a really long time and haven't even tried capturing the upcoming markets.

Two points would have to be covered for me (and others I know) to be interested:

- handle VAT like Recurly does it (http://docs.recurly.com/advanced/value-added-tax/)

- sign Safe Harbor (http://export.gov/safeharbor/)

HK++, HSBC++. We're a HK company with HSBC/Hang Seng. HSBC is pretty much everywhere. I'm sure they would love your business...

Just a lone voice in the wind, but on the other side of the Earth Australia is in desperate need of rescue too!

And while you're at it.. New Zealand please!

If your non US based, you may be interested in Simplified Ecommerce.

We cover the entire payments stack- gateway, vault, PCI compliance, recurring subscription management and Affiliate Marketing. http://SimplifiedEcommerce.com

Anyone tried this? Customer testimonials on the website would be very helpful...

Hi Rahul,

I definitely agree with getting better technology here… but have you seen gocardless.com?

They seem to have a much better (read effective/innovative solution).

Let me know what you think in comparison to stripe.

Rayhan

It's pretty hard to form an opinion from a website with absolutely zero information on it.

Sorry, you are right - their system essentially cuts out the need for credit cards and therefore merchants can take payments over the web without the massive servicing costs traditionally charged for propping up bloated credit card processing.

The system basically taps into the interbank transfer system.

From what I have seen, they respond well to all the security concerns too.

What about Canada ? Should be much easier...

What are the current options in Canada ? I'm moving to Vancouver next month (coming from Belgium) and wonder how the tech/startup looks like there...

Well Beanstream is in Vancouver for one (http://www.beanstream.com/)

Yes, I would love this in Canada too!

Problem in the EU is that there are a lot of different payment systems, in the Netherlands we have iDeal for example which works great, but is only usable here. Dutch people also almost never pay with creditcard

Yep, same here in Germany. Most people use "Bankeinzug" which is pretty similar to credit card, but you actually don't use a card but just your account number.

The EU payment thread some days ago http://news.ycombinator.com/item?id=3056714 mentioned Adyen. They seem to support all the country-specific stuff. Does anyone know if you need some minimum revenue? Because I don't see a signup form on their page, only a sales e-mail address.

Maybe I'm missing something, but the fees seem way too high for this to be a viable option for anything of scale. Even PayPal's fees are lower, and I get credit card fees of only 2.15% + $0.25 from a company offering a similar service. Yes, Stripe is beautifully designed and simple to use, but since I'm already setup somewhere else with significantly lower fees, I don't see the appeal. Are they specifically targeting small developers?

I want Stripe for my startup. Paypal has caused huge problems for us, as we sell in 24 hour periods we get an influx in sales and our Paypal is constantly locked for a few days meaning we can't pay any merchants and it all becomes a lot of work for something which doesn't have too. There's a whole list of other reasons but Stripe seems much better. We're a UK startup though.

FastSpring and SaaSy work with developers as well and support payments in Euros, Pounds, USD, AUD, CAD, and Yen, have order pages that are translated into 18 languages, and handle global tax management for desktop and SaaS developers.

Forget Europe. Come to Latin America. It's mostly e-commerce virgin.

And by Latin America I meant Mexico.

I am slowly waiting for Stripe to become a ubiquitous global CC processor. :) Don't let me down! (Australia here)

I really hope Stripe can make it happen in Europe, we are really crying out for a full stack service!

And India too.

love this! now this is an awesome product/market validation.

Come to India. Please.

Stripe is really awesome. I started using it yesterday on i.crowdfunded.it and I have never had such an easy time w/ CC processing etc...

DEar fellow European, please help spread bitcoin's adoption.

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