Samwers Clone Stripe
paymill.de
paymill.de
It took eBay something like 4 years to go to Germany, by which time there was a local clone there that proved to be uncatchable. The expensive result was that eBay had to buy the clone (Alando) for 43 million dollars to become relevant.
Kickstarter is still US-only. Stripe as well. So are countless others.
We're not talking about products that you need an huge infrastructure in the country. This is mostly about translation, and not explicitly prohibiting things.
The expenses seem miniscule to the possible upside. So why do all those fancy startups hold themselves back?
Again, you sound like a very optimistic person. :)
In reality, contracts make forever to set up, and it's better not to talk about APIs from commercial banks. Whenever monitory transactions are involved, you will have to confirm to a huge amount of regulations and conditions to meet which you will have to get involved with even more bureaucracy.
Coming from India, I am sad to say that I have got a fairly grim perspective about these things.
Translating the site to the target country takes longer than establishing another currency.
The US has something called PCI compliant and I would assume that every other country has something similar but with a different subset of rules.
(a lot of the relevant standards are now international in nature)
[1] http://en.wikipedia.org/wiki/Payment_Card_Industry_Data_Secu...
The post also mentions being a CA beta tester.
Hell, every listed company in the world would be global.
I think there was an article on HN where someone was talking about how these kinds of startups (the ones with difficult regulatory barriers) are the only ones that you should consider cloning in other countries for this very reason.
With the millions of dollars these companies get from investors you'd think they could hire local knowledge to figure it out for them.
And the original HN comment thread: http://news.ycombinator.com/item?id=4091462
Interestingly enough the first startup the author suggests should be cloned is Stripe.
BTW, obviously all startups handle money in some way, but for these 3 it's a bit more complicated, as they're providing financial services to third-parties. (Ebay+Kickstarter to sellers/buyers, Stripe to sellers.)
You have a small team, often located in the valley or major US city, that expects to spend years working on developing their business model, product and infrastructure. Even if they are fabulously funded all efforts seem to be US centric because there's no way you can split so few people across so many countries when you're still developing the foundations of your business.
Instead of the typical startup organization that all but guarantees that you will expand too slowly to other markets, startups should look into more flexible forms of organization that allows them to set up partnering organizations in other markets. Imagine if your startup from day 0 has co-founders that are solely responsible for offshore markets development, pr and marketing. These co-founders would be an interface between your business and a specific country or region that actively engages with his market so that customers knows what is happening and what your startup's plans are for their market.
What you pay in equity and title you get back in a vibrant presence and a highly skilled and competent person that can guide you through each country's customs, laws and regulations, and bureaucracy.
That said, it is an interesting idea, I know of at least one startup founder that's trying to do just that.
Ultimately it is a question of persuasion, to rally up interest and support for your cause and we've been doing this as long as we've been walking upright.
to address the point more generally, the IFC (private investment arm of the World Bank) does a report ranking the ease of doing business across countries: http://www.doingbusiness.org/rankings
Oh, and pretty much what everyone else mentioned... It's extremely difficult for any newly establish company to estimate how much red-tape (translate -> money) they will need to go through in order to trade in another country.
But the VZ owner, Holtzbrinck, did not want to sell at this time. Obviously a huuuuge mistake in hindsight. Only after that refusal FB started to sue VZ.
Groupon already has a presence in the UK, its international expansion particularly in europe was helped via an acquistion of another Samwer Brothers company MyCityDeal.de which became Groupon.co.uk, Groupon.de etc.
The reason Groupon is only growing 31% in Europe compared to in North America's growth of 66% is for several reasons including the fact that their deals are more expensive compared to their North American offers (this is confirmed by both Apple & Groupon in both of their earnings calls), the merchants aren't getting the same value from Groupon in Europe as North America which is because of the underlying fact they want higher prices AND finally because half the stuff that Groupon does in North America doesn't even exist/is in its early stages here; Deal personalization = early stages, Groupon's mobile offerings = not as advanced/early stages, its deal bank (searchable, unused Groupon deals) is at the same stage as well.
> the merchants aren't getting the same value
Groupon (much to the OP's point) is like every mindless American out there who thinks that you can simply copy and paste an American business model into any part of the world. The world does not simply work this way, but we (Americans) are brought up to think so.
The reason the merchants aren't getting the same value is because of what I explained above, that merchants aren't willing to give the same level of discount as their North American counterparts so people aren't redeeming as many deals, due to the discount not being as significant meaning the European market is only growing at 31%.
I'm actually from England, and Groupon actually made a smart acquisition from the Samwer Brothers of the MyCityDeal.de brand, even though it has received a lot of complaints (some of them were before the acquistion, and because the advertising laws across Europe all vary) however, Groupon has cleaned up these issues and openly admits to them which is why its outselling LivingSocial in the UK by 14 to 1[2].
Simiarly, whenever a company does any M&A it calculates the costs associated to expanding to the UK on its own, and the ROI from building its brand from scratch as opposed to purchasing a company outright and folding it into its brand. Whenever the costs benefits from an acquisition outweighs the decision to start from scratch, a company will always try and complete the M&A. Always.
[1] http://investor.groupon.com/eventdetail.cfm?eventid=116788
[2] http://techcrunch.com/2011/08/30/groupon-uk-is-outselling-li...
Edit: Actually, Marc Samwer was head of international operations until earlier this year: http://gigaom.com/europe/marc-samwer-out-as-groupons-interna...
Kickstarter's payment needs are pretty different from other crowdfunding sites, as the credit card is authed right away... but not charged until the project is funded AND the deadline is reached (up to 60 days). There are very few payment vendors that will hold a conditional credit card charge like that, and certainly not any that will hold off on charging the card for 60 days.
Amazon Payments recently announced that they are going to stop "boarding fresh crowdfunding accounts at this time," and also kicked book crowdfunder unglue.it off their payments platform. Amazon's explanation was that, "we have regulatory obligations as a licensed money services business for how we operate."
http://www.techdirt.com/articles/20120809/09213019977/amazon...
In order to expand beyond the US, Kickstarter needs to either wait for a major payments provider to support their unique payment requirements... or to build up their own international payments provider. It's hard enough building a startup; building a second payments startup is a huge additional endeavour.
In short: payments is often much harder than it seems. It's not just a matter of translation and miniscule expenses... there is real engineering work required to tap into international payments and understand how payments work on a country-by-country basis.
Do you have a reference for this? I'm under the impression they only charge the cards once the funding goal is reached. Amex in particular only allows pre-authorizations to last up to a week.
1. If the project has met or exceeded its funding goal, all backers’ credit cards are instantly charged and funds go directly to the project creator.
2. If the project has not met its funding goal, all pledges are immediately canceled. And that’s it.
Amazon Payments is the only processor that currently supports these requirements, and currently Amazon Payments does not support non-US recipients — meaning that you need a US bank account and address to launch a project on Kickstarter. >>
Note I didn't say regulators are motivated to not change te world. Many individuals performing regulation are well-intentioned and want to improve society, but their primary objective is to keep risk levels low.
On an individual level, startup founders have huge financial upside if their plans succeed. The regulator won't even see a bonus for that. No-one's going to say "well done on letting those guys launch here, here's a bonus for your efforts". The main financial incentive for the regulator is a safe retirement plan, and that only happens if nothing hits the fan.
"Startups are motivated to change the world. Regulators are motivated to keep the world stable."
0. You're obviously speaking mostly about startups that primarily interface with moving money or physical goods. Regulations and infrastructure in these areas are not insignificant operations. US startups working outside these areas (e.g. Facebook, Zynga, Stack Overflow) don't stop at US borders.
- Each market has its own customs, language, and tone. Marketing into a new country cannot be an afterthought, or it will not be successful.
- Language is a big deal. If you translate your website into German, you create the expectation that your customers will be able to email you questions in German and get help in German. You don't have resources for this unless it is a necessary step on the path to success. Even Stripe's $20mm isn't enough for this: remember that they are competing against very big, rich, public companies like eBay and Amazon.
- There is competition at home, in a very large, familiar, homogeneous market. If you are based in the USA and lose the American market, you will likely fail. (In fact, someone could become a competitor by starting the US-only version of your service to take advantage of your distraction.) So you need to win there first. Startups by definition have not won any markets yet.
- Non-US markets in industrialized countries are in general not all that big individually compared to the US market. Germany is like 20% the size of the US market; the UK about 12%, and Australia 10%. So it's really hard to get any major additional scale in one country, even after you jump through all the hoops to launch there and service their customers.
- US states are big economically. A startup trying to scale can probably get more mileage out of a big marketing push in a single state than by launching internationally. One sample choice: launch in the Netherlands (~15 hour flight from CA, different language, customs, regulations) or make a big push in Florida (~5 hour flight from CA, you're likely already in compliance with all their laws, your website is already in their language, your support staff speaks their language, etc.). Florida's economy is about the same size as the Netherlands'. Texas (~3h flight from CA, 4 metro areas over 2m people) has an economy and population roughly the size of Australia.
Startups need every advantage they can get to not take the default startup path (failure). The bottom line is that launching outside the US is not a barrier to ultimate success (your eBay example), but does introduce risks. So it's not often going to be a priority.
- Being a market leader in your home market is much more important (and usually cost effective) than growing internationally. Stripe still has a huge way to go in terms of 'crossing the chasm' in the US, moving out of SV bubble and in to the main-stream.
- Geographical acquisitions when expanding globally aren't necessarily a negative. Although they feel dirty, a lot of the time they can be a win/win for both players (quick foothold in the market, market leading position, entry certainty, local hires etc).
US startups needs to heed this advice. The minute you plugin that IP-to-geolocation technology, remember it is a guide, not a rule and it definitely does not translate to a language preference.
What puts me off Paymill is that I have no way of choosing a language preference. If I could select English I'd be there like a shot.
Google translate only goes so far...
They all have JS and REST-APIs and a lot more:
In bad circumstances you don't want to lose all your payment infrastructure e.g. if paymill or stripe go out of business/have issues. That's why dealing with 2 parties may look odd but in the end it is worth the effort.
If you have problems paying the 50-100$ monthly fee, then your business is the problem. Not your payment partner.
(WireCard is a profitable, public credit-card processing bank, the chances that they go out of business is much lower than VC driven payment startups. See http://www.wirecard.com/investor-relations/ for details. They do CC-payments for Deutsche Telekom and Lufthansa. >11 Billion Euro/year)
Why should a scrappy startup pay an extra 50-100$ when it doesn't have to?
Why should a scrappy startup deal with the horrible paperwork of payment gateways on top of the horrible integration, when it doesn't have to?
You make no sense.
Although Recurly could be technically used in Europe, it generates invalid invoices (at least here in Spain).
We are switching away from it, and personally, I do not recommend it anymore.
The specific issue with Recurly that we had is that they silently changed their platform to perform VIES validation on all VAT numbers. While this makes sense for transactions with entities from outside of the merchant's country, validating VAT numbers for German-to-German or Spanish-to-Spanish transactions is silly. Not only do such transactions always get charged VAT, but it's possible that a given string is a valid VAT number and yet is not present in VIES. Since you will pay (and therefore charge the customer) VAT for same-country transactions anyway, you don't care if the number that the customer provided is valid according to VIES.
This change has cost us a little wave of support tickets and an ugly workaround, in preparation for moving off Recurly.
I firmly believe that a company that gets online recurring payments right in Europe will become a money-printing machine in no time.
1. Recurly is right to add VIES validation for out of country transactions.
2. They shall not implement this feature for in country transactions.
???
German customers who buy in a german webshop have to pay VAT and then claim it back later in their tax return, because the german tax authorities don't allow that exemption beforehand.
After hearing additional requirements from dmarinoc and a few other merchants located in Spain, we have since implemented a solution for merchants using VAT.
Diego - I'll follow up with you directly about the changes :)
Rachel - Recurly Support
EDIT: The biggest payment variant I was thinking of is direct debit (German: Lastschrift), which is highly convenient. However, wiring the money before getting the goods is also surprisingly popular here. Many people just don't have credit cards. (I do, but I also use some US services like Github which only allow credit card payments.)
The only payment method that works with recurring and more or less "final/instant" transactions is credit card.
So there is no alternative for SaaS or in-app-payments to credit cards (or some direct debit risk mitigation business like paypal)
This sounds highly doubtful. Care to explain?
There is no validation except some nummerical tests. You can enter the number of some charity or your landlord when doing an order at e.g. Amazon.
To deal with that risk, every bank account holder has the right to chargeback transactions without giving a reason. That's why banks typically keep a lot of the money you invoice for a grace period of approx 6-8 weeks. And companies like Otto have their own credit check companies…
tl;dr if you instantly deliver items or services, direct debit is not safe.
That is... simply not true. Or perhaps I am misunderstanding what you are saying. There isn't a bank in the EU that will allow you to make a transfer from an account that's not yours (authenticated by whatever means - card readers, digipass, RSA keychain gadgets that display a new number sequence every minute, etc.).
Safe payment methods are advance payment (since there's no reason to allow someone to charge back an order they've explicitely placed at their bank) and cash on delivery (though that's expensive). Which is why some large merchants (eg. Neckermann) restrict payment options to these two for the first transaction.
Thank you for your time.
That's the rates _from_ Germany to any EU country. So I wouldn't pay for a wire to France, but I don't know what a French person would pay to wire to me. The regulations only say that EU wires need to have the same price as national wires.
This is how you pay: the bank earn the interest rate for those two days.
Besides, transfers within my country (Denmark) to other banks arrives next day. If you pay for the transfer, you can get the money transferred immediately. So next day = free, same day = pay.
For free transfers I don't get interest rate for the day when the money leave my account. The recipient don't get interest rate for the day he receives the money. So even if the transfer only takes a few hours (If I pay just after midnight, he'll have the money at 6am), the bank earns interest rate for 2 days.
Banks transfer huge amount of money so the interest rate adds up for them.
In Germany, your ATM card is basically always a direct debit card that gets accepted anywhere (causes the shops lower fees than credit cards), so that takes care of one part of the Visa/MasterCard angle, and for online transactions direct debit rules the game, taking care of the other half. Services like paypal use direct debit a lot in the background.
(So the only "missing" part is credit card debt, usually you can't accrue that much debt on your direct debit account)
Within the Eurozone, however, it's quite nice.
Those foreign currency fees can be a bit tricky, even for credit cards. I've got two MasterCards, one of them adds a 1% fee if it isn't in Euro, the other doesn't (well, I got it exactly for that reason).
In the case of my (free and completely standard) account that’s exactly zero Euro for every wire transfer. (You cannot transfer more than €50,000 and, as I already said, only Euro.)
Wire transfers are a very common way to pay for stuff in Germany and it’s very easy to get accounts that have free wire transfers. I would even speculate that most banks offer free wire transfers (I would at least be surprised if a bank told me that I have to pay for wire transfers) but I can’t be sure about that.
You are not using wire transfer companies in Germany, you just tell your bank the amount, name, account number (IBAN if it’s going outside of Germany), bank name and number (SWIFT-BIC if it’s going outside of Germany) and purpose of the wire transfer and you are all set.
We have the same direct-debit system in Norway, called BankAxept, which is managed by a consortium of banks; banks typically issue cards with both Visa and BankAxept built in. However, BankAxept does not work with online payments.
A new system, BankAxess, has been launched for online payments, but it has not been widely implemented yet, so most online stores offer payment by Visa/Mastercard. Visa/MC's fees are somewhat exuberant, so most stores also offer COD and payment by wire transfer as alternative options.
Direct debits as a seller: You file the direct debit with your bank. This can normally be done online through a web interface or various APIs (e.g. HBCI). The transaction is then processed through the Eurozone's TARGET2 system, i.e. the amount is withdrawn from the buyer's bank account and credited to the seller's bank account. This works in the entire Eurozone and is supposed to not take longer than a day. In practice, some countries take longer. E.g. I've seen payments between Germany and Italy take 3 days, but between Germany and France or within Germany it always takes 1 day.
Also: Why would I use a payment service of the biggest copy cat company in the country? To deliver them my revenue numbers on a silver plate so they can decide if they should "enter my market"?
They don't even openly publish the upcoming fees and just want you to "vendor lock-in" (or dig around to find the transaction fees somewhere hidden on their site). really sad :(
But this comment is down voted while it conveys a valid point. Please take a step back and try to take view this from a European (non UK) standpoint.
Are we reading the same thing?
As an European I can tell you that no one is going to wait years for a valley startup to establish itself in Europe when there are sufficiently good alternatives right here and now.
What I'd like to know is which consumers are supported, and what's the experience like, e.g. for American consumers paying through this.
The APIs are REST. You don't need a client library.
Approve.io Ogone Zuora Recurly Stripe gocardless.com (Royal Bank of Scotland) blinkpay/blinksale (no funding) Buck (fka Billing Revolution) Gumroad Dwolla Braintree ZenCash WePay Bango Clover PayOne (fka PaymentOne) Isis (verizon, At&t, etc.) Fee Fighters' Samurai Bump Pay BeamIt LEaf Dynamics Corduro Paydici Jumio Paymetric MiCash HelloWallet iZettle Card.io PayLeap BluSynergy PayTap Payleven TraxPay MineralTree CurrencyCloud Square LevelUp ZipMark Paymill
+ WireCard.com as gateway/acquirer. Works for all EU countries.
When I moved (back) to Europe 8 years ago, I used my web skills to help make some extra money on the side (I'm an English language teacher because I love it, but it doesn't pay for holidays and toys :) and there is so much more to developing multilingual sites. Think more along the lines of multicultural.
That color on your call to action? That's our color for cowardice. Ед завыл бела два won't fit on that button. (sorry to any Russians here, I just typed out randomly on the keyboard, but it illustrates the point) most of our customers like to go to the post office to pay for products; oh, and our country's POs are still based on old communist operational principles.
This is without all the different regulatory matters involved. Try iterating quickly when a country's national bank has to vet all the founders to issue the proper licenses... International expansion can mean a lot more than just translation.
[edit] formatting
Branding and the first-mover advantage are very important.
http://www.launchbit.com/Edit: Never mind, googling "rocket internet samwer" shows a lot of connections. Still surprised there is nothing on the Rocket Internet pages.
German/European startups: fail. None of them were interested to get into this space. They all want to become the next payment / mobile solution and all had no interest about serving the biggest platform- web.
Stripe: fail. I know how startups work. I know that expanding is not easy. But they have raised $20 Million. You could pay a local team of 10 a year, and would have not even spent 5% of your funding. There is just no excuse. German developers wanted stripe BADLY.
German / European banks: total fail. They completely lack of any vision, and are busy enough staying alive.
I'd love to be able to use Stripe and I hope that the introduction of Paymill brings Stripe support to the UK more swiftly. If not, I can use Paymill.
Somebody knows what would take to clone a startup like these? Besides money?
Glad to see it starting to happen in Europe!
Have been around for a while too
They contribute nothing new, only cut into the potential profitability of web innovators
I'm in South Africa. I can't even begin to imagine how long it'll take Stripe to get here.
(btw, didn't downvote you)