Inside Stripe | Hacker News Reader

Inside Stripe

fastcompany.com

281 pointspx75 comments

Stripe has been amazing for us. We've even gotten emails from them (most recently Saikat!) about how we were accidentally hitting their API twice. They helped us find a bug. No other company I've integrated with us paid that close attention to such matters. We've changed our internal usage of Stripe many times (from doing lots of recurring work with various plans and invoice item adding) to just doing simple charges and it's worked great every time.

We're quite proud of our Stripe-powered CC form on Picplum! http://dl.dropbox.com/u/186198/Screenshots/t26p.png

I have always attributed PayPal's problems to having to perform fraud prevention on a massive scale. That's where I understand most of the initial difficulty comes from in getting a PayPal account setup: they have to weed out scams and money laundering. Same with the horror stories I read: most of those people have circumstances that would also preclude them from a standard merchant account.

So is Stripe doing fraud prevention differently? Put another way, are they an entirely different animal from PayPal and Google Checkout, or are they betting that they can do a better job at what PayPal and Google Checkout already do?

You are absolutely correct. That's one of PayPal's main weaknesses. I am not sure how Stripe is dealing with it; though they probably have to go through a similar screening process, which isn't foolproof.

I am a co-founder of a nascent third party payments aggregator (TPPA) called PayGuard (currently in stealth mode - Beta version is being built), and our system inherently includes automatic fraud prevention; so we not only save money by eliminating the screening process, but we also save by virtually eliminating all 'dispute resolution'-leading scenarios.

As far as a comparison for Stripe, they seem to be similar to Braintree, but geared more towards early stage online merchants. The following link may answer some of your other questions:

http://www.quora.com/What-are-the-advantages-of-using-Stripe...

our system inherently includes automatic fraud prevention

If you're willing to share more, I'm listening. PayPal has "automatic fraud prevention" in the sense that, if you do something that deviates from what they expect, they suspend your account. I assume you mean something different.

Also, I followed the Quora question to this related one: http://www.quora.com/How-are-Square-and-Stripe-able-to-accep... I'm still confused about one thing, though. I understand that PayPal is both an aggregator and the merchant of record. It sounds like Braintree is not and aggregator and not the merchant of record. But this poster claims that Stripe is an aggregator, but not the merchant of record, and I don't understand what that means.

No we won't freeze, close, or withdraw money from people's accounts. Once it's open, it's open. Once the money is cleared, it doesn't go back. This is an ironclad promise we can make to users because of the unique way we process payments. Right now the model for peer-to-peer transactions is that after one party gets paid the other waits for his merchandise or services to be delivered (eWork projects). We solved this problem by creating a system that will give equal distribution of control to both parties during the entire process, disincentivising fraud on both sides. The system is specifically designed for people who outsource projects, freelance workers, and cross border peer-to-peer e-commerce. It would simulate the benefits of a face-to-face interaction by solving the problems created by the distance and time usually involved in these types of exchanges.

Is "we" PayGuard? And are you saying you won't "freeze, close or withdraw", or that you can't? One is a promise. The other is a fact. See Colin Percival's post on the distinction: http://www.daemonology.net/blog/2012-01-19-playing-chicken-w...

It's also not clear to me how what you describe prevents scams and money laundering. Note that in the case of money laundering, it's the same party on both sides of the transaction.

You are absolutely correct, it is a promise. But it is also a guarantee. There are regulations regarding money laundering that we will have to comply with of course. Users are required to fill out certain forms if the the amount of a transaction exceed 3,000 for individuals and 20,000 for businesses. And these are not just "per transaction", it is per month. As with scams our system is specifically designed to prevent users from falling into the trap scam sellers or buyers. Of course it will never be absolutely fool-proof, but it does significantly reduce the incentive for fraudulent activities on both sides. Unfortunately, I cannot give out too much detail on how we do it. We are launching our beta system sometime around March and you will be more than welcome to try it out as a beta tester.

It's probably too soon to tell what's going on.

They are still relatively young and it will take a few more years for the vectors of PayPal's fraud troubles to target them.

I think right now Stripe is primarily know in the HN-type circles, not the eBay-type circles. Hence the good times they are experiencing.

I love Stripe and it's been awesome to use, but must repeat a question I asked in another thread. I wonder if that level of simplicity is sustainable for them going forward. The reason other payment providers have paperwork and approval processes is because of liability and the reality that there are unscrupulous merchants out there. Is Stripe assuming an increased liability because of the ease at which anybody can just sign up?

We think a lot about risk, and actually do more verification than traditional merchant-account providers. We just don't make you do busywork like mailing us a voided check or a utility bill.

We certainly believe that the approach is sustainable, and the data so far strongly supports this.

Awesome, glad to hear it! Thanks for the disrupting the space, I know I'm not the only one who appreciates it.

Stripe has been fantastic for us at http://mailgun.net

Aside from solving the problem of dealing with recurring payments, they bring some unexpected benefits to the table. Their reporting (and the overall dashboard design) is so good that we canceled our original plans for building our own reporting completely - we just link directly to Stripe reports and customer pages from our own backoffice admin portal.

Agreed. Stripe is working wonders for us at: http://www.mobiledevhq.com

We tried to integrate with PayPal's recurring APIs for three weeks, scrapped it when we found Stripe, and had it completely ready to go in 24hrs.

Not to mention their customer support is absolutely fantastic. I get responses within seconds in their Campfire chat room and hours if I send an email, anytime of day.

We were lucky in that Stripe was made available right as we were starting http://www.ginzametrics.com. We never had to deal with the painful issues that we've seen other companies go through with their billing systems.

Their dashboard has also come a long way so that many of the back office management things I thought I was going to have to build have been taken care of. You can create / manage plans, customers and more. It's hard to believe nobody has solved this problem until now but I'm glad that somebody finally did.

What is it about Stripe that is taking Google and Paypal a long time to imitate? Article mentioned api took tons iterations and stringent auditing, but the api is now known and auditing established companies should be relatively faster. It seems unlikely that the first mover advantage will allow enough time for Stripe to make a dent in the market. Flying under the radar longer might be better, but congrats to the team for all the accomplishments.

I wish it worked in Canada... Any other Canadians out there wishing the same thing?

100%! I understand the ridiculous amount of red tape that is probably slowing them down, but not having a paypal alternative is brutal. Wepay is also not available in Canada last I looked.

You should look into Moneris (RBC+BMO venture). Sane API, good support, decent fee structure.

http://www.moneris.com/

Do you have a page you can point to where they do the drop-in .js, or something as simple as the curl call that Stripe offers an example of?

Man I wish we had Stripe here in Canada.

Moneris is a huge pain and hassle for a small tech business.

Really, why? My experience is the exact opposite. I run two startups in Toronto, both use Moneris, no problems. I had cards processing within a day or two.

How can a badly put together website full of stock photos tell me they do anything different from their competitors?

We're working on this right now.

Do you have a timeframe for when it will be ready?

Oh god please do. There is a serious lack of innovation in Canada. Anything that can smooth the path is a boost.

And Please Please look at Australia as well

101% Yes. I'm always gutted when I read "currently only available in the USA".

Yes. I wish both Square and Stripe worked in Canada. I've had a Square Reader for a year and haven't been able to use it but, I know it's tough getting everything sorted out with banking institutions and merchants.

Stripe looks so awesome that it's got me thinking about charging for things that I might not have bothered charging for in the past. I think that's one of the unseen benefits. I'm looking forward to using Stripe.

A lot of people doesn't notice this, but when all you have to do to start charging people is include a couple lines of Javascript then the game totally changes. Imagine being able to charge (or just put a donation button) on all those weekend projects you see advertised in HN!

I think that as soon as they start expanding outside the US the market for web applications will radically change.

Been very pleased working with Stripe for one of my projects. It just feels like it was very carefully thought out. Hope they continue to make strides in the developer community.

We're loving it over at http://coursebookapp.com. We've been happily humming along for a few months, PayPal-free.

Please come to Australia!

I can't confirm or deny I'm working on a direct competitor.

Am I serious? Or joking, just to light a fire under you?

Please hurry! :)

Seconded! The Australian market is ripe for a company like Stripe. People are just now getting happy with buying things online, so hurry!

Can someone explain how stripe/square can get around the merchant account requirement?

As far as I understand it, Stripe IS your merchant account. They are similar to a Paypal type service. Does that help?

If I'm not mistaken they provide the merchant account implicitly.

They are a third party payments aggregator (TPPA), just like PayPal when it started. They make it possible for merchants to accept credit card and bank transfers without the need to setup a merchant account with a bank or card association. The aggregator provides the means for facilitating payment from the consumer. The merchant is paid by the aggregator.

Stripe is great, simple and awesome support. Once I got past the super simple first charge, I had some technical questions. I jumped into their support chat and had my question answered, plus some helpful php links.

If only they would come to Europe (or any European alternative would rise and stand up against Paypal).

They're an amazing and promising startup and I do hope they succeed soon in expanding across the ocean.

We're working on doing exactly this.

I would love to know expected timeframe. Being in Europe and not part of EU (yet), handling payments is a major pain. Waiting for years to be able to complete charge on my own site instead of redirecting to a payment processing company. All that easy analytics and A/B testing opportunities....

Here's how my startup ended up using Stripe: After being told by Paypal I couldnt use Paypal at all (due to my business model being a violation of their Acceptable Use Policy) and then more recently Braintree telling me I could only process low number transactions (less than $250), Im happy to say that http://www.sponsorist.com now processes payments with Stripe.

I just finished using these guys for a product I'm launching next week. Great service and great support. Highly recommended.

Seems like a great service. Thanks for the article.

How does Stripe line up in terms of services compared to GoCardless which was up here the other day: https://gocardless.com/

Differences in the agreement / metrics / UI / API? Seems like the 1.9% fee difference could add up.

This comes up again and again, unfortunately. Its Apples and Oranges - and I get the feeling GoCardless don't say this clearly enough:

GoCardless does not process credit card transactions. They process bank debits (= low fees, different system), and are UK only.

Stripe does process credit card transactions, and doesn't do bank debit.

Hehe the desk shown there is exactly the same setup at http://stripe.com/jobs page. And yet none of the other workstations come with $1500 Herman Miller Embodys...

I can also identify a pair of grados in the far right. Aging SR60s if I had to guess...

The 'phones ont the desk behind the Embody appear to be Sennheiser HD 202.

http://www.sennheiser.com/sennheiser/home_en.nsf/root/privat...

They're actually just Bose QC15s.

Nice.

(I was looking at the ones in the Fast Co. photo.)

A lot of sweet bikes too!

Great product! Looking forward to trying it out very soon. Anyone know the ergo keyboard being used?

Kinesis Advantage - http://www.kinesis-ergo.com/

Great keyboard ... have 3 of them. Really wish they would make a Bluetooth one.

On the same topic, does anyone know the display arms they're using in that last picture? The mechanical thing holding up the Apple LCD Displays.

Ergotron: http://www.ergotron.com/

Can any of the Stripe team comment on when you'll be launching support for UK businesses ?

Sorry, we can't give a timeline. I wish we could.

I wish you could too! What's stopping you right now?

There's undoubtably tons of red tape for them to navigate whenever they enter a new territory. See the linked article for the hassle they had in the States.

They also tried setting up in Ireland originally but some Irish banker pretty much laughed them out of the room by the sound of things when they had a meeting. Is there any wonder why the US is a more fertile environment for entrepreneurship?

Given what Irish bankers did to the country, I wouldn't give much credence to their opinion. Unfortunately they still pull the strings and have incredible political clout. I'm not even Irish (though I lived there a few years) and it makes me sick thinking what the banks did, and then to foist it off onto the Irish taxpayers. Ireland's loss is the US' gain!

This is completely off topic for the business model, but how do you like the orange Embody chair in the last picture? It looks like the fabric is getting dyed from jeans, but other than that, how is the actual chair?

I absolutely love mine. Love it. Had one for about 2 years and it fits like no other chair I've tried. Only problem is that I have to remember to keep a towel on it when I'm not here because one of our cats loves it. That's unnecessary hassle for what is essentially a work tool, but if I didn't the seat would be clawed up within months.

AS businesses scale, is it fair to assume they would want to start accepting and storing credit card information - basically the costs would be much lower? If so how do they meet security requirements/compliance?

We're using Stripe and it's been awesome right from day-1.

Stripe has been awesome for us at CloudContacts!

Micropayments support would be wonderful

I think it's essential for their success too. I can't use them without micropayment support.

I'll second this notion. Even if there is a way to collect micropayments, but not process them until they are large enough to process efficiently with the current credit card framework.

It's reasonably easy to do this with Stripe today, there's no reason you have to send a "charge" their way until it's accumulated enough to be worthwhile.

does anyone know if there is a way to transfer credit cards from Stripe to another 3rd party if they raise their rates? (I'm worried about this being a "low introductory offer")

Or do you have to solicit credit card info from all your customers again?

From their FAQ:

>Tell me about data portability. >That's not a question. We feel pretty strongly about data portability. We'll try to keep you with us by offering a better product than all of our competitors, but we won't keep you by locking you in. If you want to leave us for somebody else, we'll help you migrate your credit card data in a secure and PCI-compliant way. We're programmers at heart, and we strongly believe in open systems and a level playing field.

let me answer my own question: see https://stripe.com/help/faq and "Tell me about data portability."

Such a great service.

If you read about the early founding of PayPal you will find one of the big issues they faced was fraud. I hope they give that angle enough thought otherwise they are going to start leaking cash like the Costa Concordia took on water.

On reading the article you would note in the second paragraph that two of the backers are Paypal cofounders. That would lead us to expect Stripe do have a big clue about the fraud issues.

It will only be later that we'll find out what happens behind the scenes. For example Paypal works wonderfully right up until they decide to hold your funds while they investigate. Stripe will probably end up doing something similar and also have similar collateral damage (false positives).

The Stripe FAQ includes a chargeback section which would cover the other likely scenario - people claiming not to have received the item/never made the transaction/it wasn't what they ordered etc.

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