Show HN: Accept Payments with fees up-to 70% lower than Stripe | Hacker News Reader

Show HN: Accept Payments with fees up-to 70% lower than Stripe

24 pointsyousseflotfi32 comments

Hello HN,

I'm Youssef, a 26-year-old CEO of LeetPay. I created LeetPay after recognizing the financial strain that transaction fees can have on businesses, big or small in the United States. Just as the saying goes, "Necessity is the mother of invention", so began the journey of LeetPay.

LeetPay facilitates direct payments from your client’s bank to yours, effectively bypassing the traditional card payment systems. The idea behind LeetPay was to simplify payment processing while minimizing associated costs. Our service operates at a flat 1% fee per transaction, a solution that could potentially save you thousands of dollars each year. Which is much lower than credit card payment providers.

While LeetPay is a general solution for payment processing, we've particularly honed in on a niche that we feel has been underserved - B2B SaaS companies. In this business model, where recurring payments form the backbone of revenue, the persistent drain of transaction fees can significantly impact the bottom line over time. The high volume of transactions that these companies handle presents an excellent opportunity for them to benefit from our flat 1% fee system. By using LeetPay, these companies can preserve more of their earnings and reinvest them back into growing their business.

The beauty of this system is in its simplicity and security. Your customers authorize the payment directly through their bank - as straightforward as using a credit card, but more secure due to the direct bank authentication. To ensure seamless adoption, we've developed a user-friendly API that easily integrates into your existing workflows and website. What's more, we currently support 92% of US banks, making our solution widely accessible. For your peace of mind, we also prioritize transaction protection and offer robust security measures.

I am aware that there's always room for improvement. LeetPay is not perfect, but it's been a labor of love. As a fellow builder, I understand the value of feedback and constant iteration. I would genuinely appreciate any insights or suggestions you might have.

You can check out our website at www.leetpay.me

Thank you for taking the time to read about LeetPay.

I am excited to hear your thoughts and feedback.

Thank you HN :) ,

Youssef

> Unlike card information which can easily be stolen or misplaced, LeetPay transactions are processed by the Consumer's US Bank via the US Government's ACH (Automated Clearing House) rails.

if i understand correctly this provides... the least amount of privacy possible? with card numbers i have virtual cards that aren't linked to my identity, but with direct bank transfers, everyone gets our full legal name and everything, which is absolutely blasphemous

(granted, our full legal name is easily discoverable from our username, but random sellers don't necessarily know that)

Thanks for your feedback!

I concur that privacy could indeed be a concern. However, accessing your bank information is required to execute a payment. Importantly, we don't retain any information or details pertaining to the payer's account. This information is solely accessed to initiate payment and nothing else. Our aim is to maintain utmost transparency, and we provide you with exact details about the information we access at the time of payment!

the seller gets all my bank details when they receive the payment - it doesn't matter how many details you don't store yourself

Nope they don’t! Because the payment is not straight to their bank! It goes to their leetpay Balance!

You switched accounts :)

It's completely normal to pay for a lot of things with direct bank transfers in Europe. Nobody bats an eye unless they want to keep their identity a secret for some specific recipients for some specific reason. Then they look for other, more anynomous methods of payment. For most people it happens practically never.

i mean, the united states does still have zelle which is basically also a direct bank transfer that reveals your full name, but i only really use it for buying cryptocurrency, and transfers to actual friends who know me personally already

Youssef, thank you for bravely posting. I think you have done an amazing job and almost certainly should ignore my feedback.

I would not be interested in lowering fees - as someone who sends but does not collect payments - because of the risk of fraud and the unknown risk of fraud.

Because I don’t carry the cost (your customers do), I would not be interested in doing something that appears to reduce my protections. I think bank transfers, by virtue of being debits from my account instead of essential a PO, are much higher risk on me and my card.

I would almost always use cc instead of a bank transfer for this reason. Unless I knew a company that I bought from was paying crazy fees after I had established a relationship. If my sales POC from $vendor asked me personally to save them some cash, I might consider it.

Grain of salt, but it sounds like you are trying to serve a two sided marketplace and have put all of your focus on one side - because who wouldn’t like to save on the extortionate cc fee?

Yet you need to convince the customer to put their info in. Why would they? What can you offer me to take that risk?

Thanks for your feedback!

Let me clarify a few things. It may seem counterintuitive, but we don't need your credit card information to process a payment. You'll be redirected to your bank's app to complete the payment, which is more secure than simply inputting your credit card details. This might seem counterintuitive at first because anyone with your card details could make a payment. However, with 'pay by bank,' you'll be asked to authenticate the transaction using FaceID or whatever method you use with your banking app.

From the merchant's perspective, statistically, you're more protected from credit risk because an ACH transfer is more likely to go through than a card payment.

As for market positioning, we ideally want to partner with businesses that operate in a B2B model. We only facilitate payments from end users to merchants - it's a one-way flow. But to be honest, we're still figuring it out!

Not the prior poster, but it seems like you’re missing his point? From my perspective, I’m far, far more uncomfortable about authenticating through my bank than providing a credit card number - that feels like I’m potentially granting a bad actor carte blanche to the keys to the kingdom, whereas I can always dispute a fraudulent CC charge.

Alright, I understand! The difference between providing credit card information to the merchant is as follows:

Credit Card: When a merchant has your credit card information, they essentially have carte blanche. They can initiate payments and so forth.

Pay by Bank: The merchant has no information about your bank. They can only send payment requests through LeetPay. We then initiate the payment when you authenticate with your bank and accept the merchant’s request. There’s no carte blanche here!

To be more direct, I am willing to give out my cc number because that isn’t my money. Not immediately. I rarely would give access to my bank account, security protections notwithstanding, because then money isn’t buffered by credit card anti fraud and customer friendly policies.

What I’m saying is as a customer, I perceive receiving a great deal of value by having it on a credit account that I pay later and not a debit account that I pay immediately.

ok. We don’t support this options rn. I understand that end users might prefer to have different funding options. But for now it’s either your checking or savings.

That's the crux of my feedback - you need to find a way for customers to perceive this as the superior option to credit cards. There are some hard facts and you will be fighting uphill against reward points + all the PR that credit card companies have created over the past 50+ years - chargeback ability, increased warranties, arbiter of charges.

Because the customer sees only the benefits of a credit card and the (perceived) increased risk of doing it through their checking account. You will need end customers to want to use their banking info in order to be successful.

I am actively considering your suggestions. Initially, it might be challenging to go beyond cards in terms of benefits, as you mentioned. Innovation will be crucial in addressing this, as it was also a point raised by the majority of the people I spoke with.

As for market positioning, we ideally want to partner with businesses that operate in a B2B model.

That's not the vibe I got — and, even if so, why would they want to use this?

Also, the name of the service sounds like something cryptobros or gamers would use; it does not sound professional whatsoever.

I would have thought you need to be low margin to care about this, or exhausted all opportunities for growth and cost savings.

And even then it is risky to lose a customer by refusing or not offering credit card options.

If you offer both CC and transfer it’ll be like $9.99/user-month for CC and $9.81 if you pay by transfer so it is not too sexy a saving for the customer.

I like what you are doing but I wonder how you get a foothold on it. The “using CC but hate the fees” niche must be small because they are already using bank payments if they need to. For example an employee or freelancer or company that does large yearly payments.

Thanks for your feedback!

The idea isn't to completely abandon cards right away. You could add LeetPay as a 'pay by bank' option to your regular checkout flow. As a business, your end user would then have an additional option.

Essentially, everyone I've spoken with has expressed a desire to save on fees (value prop is clear), but they've also grown accustomed to a particular way of accepting payments, mainly through cards, and it works well for them. The feedback I've gathered suggests that businesses using subscription models might be a better fit for LeetPay, as it's much easier to debit customers on a monthly basis.

I agree, it's a hard sell to use 'pay by bank' for a single payment transaction. Perhaps focusing on subscriptions could be the way forward for it. In this case the saving is much more clear per customer.

Your website doesn't inspire confidence for me (I'll be the first to admit that I'm a design snob).

One of the major perks of Stripe is its documentation. If you want to position yourself as an alternative, you're gonna need comprehensive docs.

Good luck, payments systems doesn't seem easy at ALL! Kudos for tackling this and giving folks an alternative to Stripe.

Thanks for your feedback, appreciate the advice.

Design may not be my forte, lol! However, I plan to make improvements to the website and documentation over the weekend.

First, though, I need to ascertain whether it's something people would be interested in using.

The LinkedIn icon takes you to facebook.com... not the most assuring. This whole operation seems sketchy at first glance, especially when considering this is a financial product.

My bank application, Zelle, has fees for me (customer). My credit card does not - in fact it gives me a few percent back.

As a customer I am strongly incentivized to use my credit card.

Thank you for your feedback!

Would you be more interested if on each transaction you collect rewards and this rewards could give you some advantages (like discounts for instance)?

Promised discounts with a lot of caveats would hold no appeal. But a blanket “1% cash back” would get my attention, yes.

Thank you very much for attempting to bring wonderful system of direct payments, used in Europe for more than a decade at this point, to US market.

How do you handle disputes or chargebacks?

I don't think there can be disputes or chargebacks, just like with any other direct bank payment method. Disputes are a service offered by CC companies to keep customers using their cards. Otherwise disputes are handled by a court of law.

Thanks for your feedback!

We're still figuring that out. It's a challenging topic to tackle at our small scale.

Essentially, for a merchant, the idea would be to guarantee a certain amount when initiating a transaction. From our side, the best we can do is to implement a decision layer that could assess the likelihood of that event occurring. But overall, it’s a very good point!

up to 70% lower than stripe but no card payments and can only process US customers?

Yes pretty much!

is it only available in the US?

Yes only US!

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