Stripe raises $600M at nearly $36B valuation

I'm very happy with Stripe and for their success, but I plan on switching all my payments to go through PayPal again. I did some math and PayPal offers a better deal for Canadian businesses after Stripe bumps me off of their grandfathered conversion fees in a couple months.

I love the slick interface, but it's simply not worth the thousands per year I'll be saving with the switch.

For me the main selling point for any payment processor is the minimization of fees. Sure, the API's are nice, but I already use a payment gateway for that.

I'm a few clicks away from saving thousands. Am I missing anything?

If you're doing enough business they'll usually cut your fees if you ask (according to a friend who did just that).

Are you planning to go through PayPal directly or Braintree?

One thing I notice is, I get much less fraudulent payments through PayPal, and when I do get them it's handled automatically (and most of the time they end up being not fraud because PayPal investigated it and released the funds). 100% hands free, $0 in fees.

With Stripe, not only do I get more fraudulent payments but you need to pay $15 as a dispute fee through Stripe when you lose the case and pretty much all fraud causes through Stripe will be lost (because it's actual fraud). It also takes like 20 minutes to fill out the forms, create fax-compatible sized screenshots and a lot of other boilerplate information if you plan to contest the dispute.

It's a shame Stripe doesn't offer the Radar service (helps detect and prevent fraud) with custom rules as part of their normal service. You can only get it if you pay insurance fees, which are added fees on top of the normal amount.

Combine that with the new Stripe SCA compatible APIs and sketchy docs and yeah I'm in the same boat as you. Stripe is no longer an immediate "of course I'm going to use Stripe" decision. Braintree is looking pretty good at this point.

Watch out for PayPal freezing funds at their discretion, for long periods of time.

https://www.google.com/search?q=paypal+freeze+funds&oq=paypa...

I've worked for FreshBooks and three other invoicing or payment related companies, and I have lots of friends that work at Shopify or run online stores.

Billing through PayPal is playing with fire. They can and do freeze accounts and it can take months to get the issue resolved. It will probably be fine, of course, but I've seen it happen and personally, if I were in a high margin business, I'd stick to Stripe. Especially if you run a company where other people make money on your platform like an Etsy or similar.

Stripe should be able to add those features, their team is really strong.

If you do anything through PayPal do not keep any funds in your PayPal account. The company is well known for seizing funds in their customers account with no recourse.

Stripe not allowing to withdraw onto USD accounts not located in the US is an absolutely MASSIVE gripe with the service.

We operate internally in USD - we sell in USD, we pay in USD, so we end up being shafted with not one, but two pointless FX conversions. And that's without going into minor stuff like the headaches with refunds done at rates, extra accounting overheads, etc.

No, you're not. I was very happy with Stripe for a few years. As my business grew and I looked at where I could cut costs, I asked around and Braintree's model was going to save me 1% per transaction. At my volume that was going to add up to thousands of dollars in savings a month over Stripe. I went back to Stripe to see if they'd be willing to match Braintree's pricing, because I was happy with them over the years and it would have made things much easier to not have to switch to a new payment processor. But they only offered about 75% of the savings so I switched anyway. Turns out the APIs are roughly the same anyway for the basic functionality that I need, I'm not an advanced user. I estimate the switch has already saved me about $75k.

PayPal owes me $200.

I got a letter from the state comptroller saying that paypal had been trying to reach me and my money was about to revert to the state and call this number to get it.

So I called the number, and they ask me, "Do you want it in a check or in your paypal account?" Well that account has been frozen for years so I say, "Send me the check."

That was a few years ago now and I'm still waiting.

Fuck PayPal.

It’s a business decision, not a talent issue.

Is this country-specific perhaps? I'm in Canada and it's no problem for me to withdraw USD to a Canadian-based USD account.

Would you mind sharing your percentage of fraud with the two services? (I assume you are using Braintree.)

Honestly, you are the first person to make a good case on using PayPal over Stripe. Especially with the arbitrary horror stories I hear about PayPal all the time.

> It's a shame Stripe doesn't offer the Radar service (helps detect and prevent fraud) with custom rules as part of their normal service. You can only get it if you pay insurance fees, which are added fees on top of the normal amount.

I agree. This should be standard.

> Combine that with the new Stripe SCA compatible APIs and sketchy docs

Would you please describe what is sketchy? Their docs seem pretty good... but I am now just hearing about SCA.

https://stripe.com/guides/strong-customer-authentication

This is at larger volumes right? Base level of both seems to be 2.9% + 30 cents

Right up to when your account gets frozen PayPal looks fantastic.

Did you try to recover the money through the state? Most states have a site through comptroller/treasury/etc. where you can start a claim process.

(Assuming that paypal reported the uncollected money correctly.)

I use Stripe and PayPal currently but on the next platform I'm currently building I'm strongly (and very seriously) considering Braintree.

With PayPal, the fraud experience has been nothing short of amazing. Out of many many thousands of transactions, I've only had about 3 or 4 transactions get flagged as high risk by PayPal. What this means is PayPal will hold the funds, review the transaction and then either give you the funds if it's legit or do something else if it's not legit.

I've had 0 cases on PayPal where fraud / disputes actually took place. Of those 3-4 transactions, they were all released. None of this required any intervention by me. I just got notified by email from PayPal when a high risk transaction occurred. 100% of the funds were put back into my account a few days later (short of the normal 2.9% + 30c fees).

On Stripe, I've also had many many thousands of transactions. I've had a number of fraud transactions in the process which ended up as disputes. Stripe sends out an email letting you know, but then it's now on you to decide if you want to contest the dispute. This dispute typically happens when someone who got their credit card stolen sees an unknown charge in their records.

Now you need to fill out like 8 form fields and supply screenshots and server logs of proof that someone was accessing the material they've stolen (I sell digital courses so there's no physical item). The screenshots need to be sized perfectly to be displayed in portrait mode on a sheet of paper that gets faxed over to the person reviewing it from the bank, otherwise it'll be unreadable from their perspective and you'll auto-lose the case.

Stripe doesn't let you see a real preview of these screenshots and they even alter the uploaded image size in your preview which makes it hard to preview what it will look like from the reviewer's POV even though that's the only thing that matters.

After doing that, it takes about 2-3 months to get a resolution. You get charged a $15 bank dispute fee (on top of the full amount of the product of course) which is non-refundable unless you happen to win the dispute, but if someone got their card stolen then you're not going to win the case. You also don't get any information from Stripe about the review, other than you won or lost. Stripe says it's because banks don't give them any info beyond that. Fine, that's ok, but yeah the overall experience is very very bad.

Then on top of that, Stripe sells a Radar service that you need to pay extra on top of for each transaction to get better tools to help prevent fraud before it takes place. They choose not to give it to everyone because I guess they profit from dispute fees and fraudulent transactions.

The kick in the teeth is that the data Stripe uses to train their Radar / anti-fraud service is data provided by business owners who have trusted Stripe with their business. Now they are selling that data back to us in the form of insurance fees on each transaction (the Radar service you need to pay for).

I haven't personally used Braintree yet but from what I read in their docs, you get that type of anti-fraud service baked into the normal 2.9% + 30c (don't quote me on that, but it very much reads that way on their site).

Whatever PayPal is doing (and in turn Braintree since it's a PayPal service), they're doing a fantastic job at combating fraud and disputes, especially compared to Stripe.

> Would you please describe what is sketchy? Their docs seem pretty good... but I am now just hearing about SCA.

Their docs are typically good, but the SCA / Payment Intents docs are not really at the same standards as the rest of their documentation yet.

Come back in a few weeks when you've implemented it.

What's interesting is I run a podcast about running web apps in production and I've had a bunch of folks come on the show who use Stripe to accept payments.

All of them have said the experience with implementing SCA with Stripe was pretty rough. These are seasoned developers running successful platforms too.

They've all done it in the last couple of months as well.

Hi Nick -- I'd love to have us dig in more here to understand this better. Could you email me? patrick@stripe.com.

[In brief, chargebacks/disputes work differently for PayPal payments as compared to credit card payments... I suspect that much of this is mostly a PayPal vs credit card difference. But I want to understand the details.]

No. My consulting rate starts at $200 per hour so it's just not worth it.

THX-1138, eh?

I talk shit about it (and will continue to do so until the Sun grows cold or PayPal goes under, whichever comes first) because it's the only way to get them back for robbing me. The actual $200 mean almost nothing to them either, so I just rub my muddy boots on their couch from time to time.

"Fuck yo' couch Eddie Murphy" (head's up the n-word is in there: https://www.youtube.com/watch?v=JcJkhSUSnek )

I agree with the poster that in our own numbers we see almost 0% chargebacks on Paypal vs almost regular occurrences on Stripe (via credit card).

Even in the rare instances where a chargeback or dispute happens PayPal has never failed to side with us or otherwise cover it under seller protection. And this is all done at the same fee levels as Stripe.

How are you saving fees on paypal ?

Looking at https://www.paypal.com/ca/for-you/fees It looks like the fees are exactly the same as Stripe, what am I missing ?

Can you elaborate ? Are you a charitable organization?

What about Braintree?

Yes

I use Braintree, money gets transferred directly to my bank, skips Paypal, but yea I agree with you I would NEVER have my income in a Paypal account for even 1 second.

A majority of my sales are from US customers buying in USD.

With PayPal, fees are: 3.7% + $0.30 USD

With Stripe, fees are: 2.9% + $0.30 CAD + 0.6% (international card charge) + 2.0% (currency conversion fee)

Paypal also have some crappy rules about adding a USD account to a company not registered in the US.

And they're currency conversion fees are obscene if you want to withdraw USD to EUR (on the order of like ~4% iirc)

> Their docs are typically good, but the SCA / Payment Intents docs are not really at the same standards as the rest of their documentation yet.

Stripe PM on the Payment Intents API here. You're right that there were some rough edges when we started rolling out this new API last year. SCA is complex and we want to help make it easy to navigate this regulation: we designed the new APIs to abstract away as much of the complexity as we can. In addition, thanks to a lot of feedback from users, we made important changes to our docs architecture, guides, API reference, and Dashboard in November 2019, and are continuing to iterate on it. I would love feedback on how we can further improve our documentation. I’m olivier@stripe.com.

FWIW, one thing you could usefully do is have someone double-check the code snippets in the online guides. They looked very helpful (and much needed) when I was reading them recently, but I remember almost immediately running into examples where something just didn't make sense. Then if I followed through to the corresponding code in the samples repo, it really was slightly different to what was shown in the guide on your docs site. The guide to setting up a new subscription using the new API definitely had some instances of that problem. The more recent guides would also benefit from more explanation of why the sequence of actions shown was what it was and what each API or webhook used was actually for. Either that or some concise, big picture overview would be good (or ideally both).

From the user's perspective:

A few (maybe 5 or 6?) years back I suddenly stopped being able to add or withdraw money through PayPal, with a completely vague description. Multiple hours on support documents and attempting to contact support (which is a problem in itself) and the problem was not resolved. I wasn't that invested in buying what I was trying to buy, so I eventually gave up. I've tried again a few times over the years, with no success.

When I see PayPal on a site nowadays and either no other options or I don't trust them to process the card themselves, I just leave. If this is the sort of effect that could harm your business it may be worth it to pay for a payment processor that works for all your users.

I also have a $0.49 balance in PayPal which I can't withdraw. I don't care, but if it were a larger amount I probably would.

This x100. We’re based in the UK but most of our customers are in the US so we bill in USD.

The most annoying thing is that US customers pay additional fees because we’re based in the UK, and our UK customers pay extra fees because we’re billing in dollars.

Stripe customer support very responsive, but they’ve told us the only way to fix it is to open a bank account in the US - which would mean we pay tax in the UK and US. We tried opening a USD bank account in the UK, but Stripe told us after we’d done it that they couldn’t send money to it. Maddening problem with an otherwise brilliant service.

If you're a Canadian merchant, you can add a USD bank account to avoid the 2% currency conversion fee. This bank account can either be with a Canadian bank, or a US bank.

Source: I work at Stripe, but in addition to that, previously started a Canadian company using Stripe, and like you did mostly payments to US customers in USD. I had deposits directly into both a USD bank account held at a Canadian bank as well as a USD bank account held at a US bank, and did not pay the 2% conversion fee. I actually never received CAD directly at all.

More details: https://stripe.com/docs/payouts

But yes, other than certain exceptions such as this one, getting payouts in non-local currencies on Stripe is limited, and we're working on improving that.

(edit: This assumes you have expenses in USD, or a cheap way to convert USD to CAD, to avoid a ~2% fee from your bank on the conversion. Personally I've used Interactive Brokers which charges 0.002% for USD/CAD conversions.)

This is where partnering with a company like Routefusion comes in handy. We would help you repatriate those funds, and move it back to your country of choice at .5% currency exchange :)

check us out developer@routefusion.co, and feel free to email me at colton@routefusion.co if you have any questions!

No experience or knowledge to share there, but they're owned by PayPal, so I'd ask around to see if they're any different.

I skimmed through your homepage and I frankly have no idea what you do and who it is for. "International bank-to-bank payments" implies that it's some sort of service for banks.

Thanks for the feedback :)

We are an API for cross-border payments. Our customers are international payroll providers, credit card companies, neo-banks, and other types of companies who need to process X-border payments in their application.

If you were an e-commerce store, we could certainly help you re-patriate funds via our web app, but that’s not our focus.

Are you having issues re-patriating funds? Happy to help in anyway I can!

My experience mightn't be typical but I recently had a dispute on Stripe that went a lot smoother. A customer disputed 3 monthly subscription transactions. After providing evidence it was resolved in our favour within a week.

I had low hopes because the server logs were long gone (over 90 days). However I had logs from our email provider showing reads and clicks from our emails so I sent a screenshot of that. I said Wordpress said they logged in once when they bought it and never again (of course, anyone could say that). I said their account email matched their Stripe email which had their name in it, and their IP matches where the billing address is so it seems to be a real person. I also said they'd never responded to any emails sent to them from us to resolve this.

Despite being nearly certain this was just a change-of-mind chargeback I didn't have high hopes because that's a lot of conjecture rather than evidence but it worked out.

We also had an early fraud warning giving us notice to refund and avoid the chargeback fee. I chose not to because it looked legitimate to me which was probably a mistake despite how it worked out.

We also use Paypal. My major issue is their internal dev team/processes seem broken. We got stuck in a 'verify your identity' loop for months. The business support person was great, patient and understanding. But no one could fix it. We'd pass the check then overnight it would revert and block transactions, sometimes multiple times a day. We setup a second payment processor as we should've much earlier. Eventually it was fixed without explanation or notice. Braintree is probably a lot better on this front but having the Paypal logo more prominently displayed has a lot of value for some customers who don't like the unfamiliar.

That's interesting to read. I'm in the US and every time i go through a site that uses Stripe I have to use one particular credit card because all others get denied. So I just assumed Stripe had strong anti fraud settings. I wonder if it's actually the card issuer denying Stripe now.

All of what you provided as proof was what I submit too.

I've won 100% of the disputes where it was pretty clear the person wanted to just grab the content for free and then do a charge back. The problem is Stripe not blocking the real fraudulent transactions where a bad actor stole someones credit card and signed up with that. These are the ones where I've lost 100% of the time (for good reason since it was fraud). Stripe didn't prevent those from occurring where as PayPal has blocked every single fraudulent transaction before it took place and I didn't have to sign up for extra fees or lift a finger to get that protection.

To my understanding (and I may be wrong) with Braintree the customer would still see PayPal's branding if they check out via PayPal. They would see something like this: https://articles.braintreepayments.com/img/developers/pay-wi...

One of the main tough things with the SCA / Payment Intents is that we have to keep our payment state in sync with Stripe's (updating the amount to charge and syncing with the cart total), and then syncing with a webhook. The transaction apparently happens in a separate process from the customer's browser session.

With PayPal you simply send a request for a certain amount, and when it gets approved the customer's client comes back with a token and you choose to execute it or not. If you don't execute, the charge just isn't completed.

Stripe's docs says to not depend on the client because the client can close the browser window. In the PayPal case, if that happens, the transaction is simply canceled (since the client closed before finishing).

EDIT: It looks like Stripe's docs do support the PayPal style integration, but recommends against it because it doesn't work with longer-delay asynchronous methods. It's funny because PayPal's old API was done in this way (with instant payment notification webhooks) and their new API is closer to Stripe's old API.

I was gonna ask pc directly about this, but chargebacks are a major vector of online abuse especially for livestreaming/influencer donations and such, and I was wondering how well Stripe's Chargeback Protection has worked to defeat this if anyone's signed up for the 0.4% cut to get around this. Is it a no-brainer, what's people's experiences been, and are there other trade-offs than a bigger cut for Stripe (and less agonizing over chargebacks)?

https://news.ycombinator.com/item?id=20082032

To add to Ken's comment, you can add a USD bank account (in addition to your CAD account) in your dashboard settings and your USD transactions will settle into USD without any conversion fees. If you click on 'Add bank account' in the payouts tab [0], there's an option to add a USD account. CAD transactions will automatically settle in the CAD account associated with Stripe. USD transactions will automatically settle in your USD account associated with Stripe.

[0]https://dashboard.stripe.com/settings/payouts

Source: I work at Stripe

I see, that's fair.

I don't recall paying extra for Radar and I definitely received an early warning from them, but after the transaction went through. It's apparently included on standard Australian pricing but costs an extra $0.08 per transaction if you're on a negotiated rate. Good to know.

Hi Patrick.

I am the person who asked the question that Nick responded to.

I understand PayPal has stronger network effects that may give it more leeway in handling the banks that a smaller competitor may not have.

I do agree with Nick that Radar should be a free service for all users. It reduces headaches for everyone involved. Why charge for it?

(Post to my above post if you reach HN's post limit.)

PayPal is fine until it isn’t. They ban hammer people “for life” and tell them it cannot be appealed for cryptic and often inscrutable reasons they won’t elaborate on or even bother to speak to you about.

That is interesting because I have never had a problem getting a refund from PayPal, with one exception notable exception. I assumed they always sided with the buyers.

In the one exception the seller had proof of delivery, yet it was not possible to have been delivered that day because of a road closure. PayPal sided with the seller. A year later out of the blue, with no prior communication, the seller sends me a full refund and said the package was returned by the delivery company. No idea where it has been sitting for about a year before being returned.

Enough business is a lot of business though, I just emailed them about this and they said to even talk to the department that considers you, you need 3 straight months of $100k+ MRR.

PayPal also happens to have a return shipping protection for buyers, which covers the return shipping costs even when the merchant does not.

You're probably referring to PayPal disputes, but PayPal also covers merchants from chargebacks (even if the chargebacks themselves are won by the buyer), when a physical product is shipped.

So it seems like they must eat a lot of the fees because in the case of the credit card dispute PayPal is eating the charge if they do Seller Protection.

Somehow they do all this while offering standard credit card rates, so I think they're heavily undervalued by startups.

You can open a USD account in US with TransferWise business.

Stripe only support USD accounts in USA and Canada.

> re-patriating funds

I have no idea what this means.

The problem is that you (and the marketing copy on your site) explain what you DO instead of which of the problems you might help me solve. Use-cases, in plain English.

Perhaps you have enough business already, so you don't really care about pitching passerbys, but if you do, then your pitch is unclear and confusing.

Looks like a consumer-oriented service, no?

It's the other way around. Canada is the only exception here.

Just want to say I've had the opposite experience.

Stripe has blocked multiple fraudulent transactions for me. PayPal has let multiple through which are clearly fraudulent just from me looking from my end. I recently had a case where a customer tried to pay with a stolen card on Stripe, got blocked with maximum risk score, so they created a PayPal account and used that. The payment went through, got hit with a chargeback and a fee a few weeks later. Product was automatically given - digital goods. PayPal refused to cover the costs and passed it through.

I've never had a dispute raised on Stripe. I've had multiple on PayPal.

Can I ask how do you win those? I've lost many of these via PayPal. Customer can claim goods not working all the way to "not my card, my kid bought it without my consent".

I asked PayPal for their advice, and on that advice I keep email confirmation, IPs and timestamps of download, login, registration and payment IPs, billing address, etc. -- doesn't seem to help when I submit it all as evidence.

Which is already better than Paypal. They don’t support USD account in Canada. That’s the main reason I’m using Stripe now. But seems like Braintree support USD account in Canada. Anyone can confirm?

I'm not sure how it works with PayPal since I only had to do this for Stripe but:

First I reach out to the person over email and kindly ask them why they disputed the charge with a number of things we can do as an alternative.

If they don't reply within a few days then I contest the dispute with piles of evidence that the user indeed signed up to my platform and downloaded / consumed the content.

I suspect they don’t talk about it or consider appeals at all, because they feel they have no need to bother with any sort of customer service. They are king of the hill, and always have millions of more users eager to sign up. There seems to be little reason for them to bother resolving any issues. Much easier for them to just ban the user and ignore them.

Wow, so expensive either way. European card processing is around 1.7% from what I’ve seen. American banks are atrocious. Is the Federal Reserve rate responsible for this.

American banks also take forever to transfer payments, which drives me mad. There is this massive amount of money just in limbo, a sort of shush cash pile, which the banks make interest off of while the owners of the money fume waiting for permission to use their own money. Grr. /rant

You actually hit the nail on the head. We have been growing like crazy and the copy on our marketing website hasn't changed since we quickly put it up. I truly appreciate the candidness.

fwiw - re-patriating of funds would be when a company based in the UK for example, is doing business in the USA, and they are getting paid in the USA, in USD. Moving that money back home to the UK in GBP would be the re-patriation of those funds.

>Is the Federal Reserve rate responsible for this.

No, it’s caused by the fact that I get a minimum of 2.625% cash back on all purchases, and actually 5.25% on all online and most of my other purchases with credit cards.

Paypal is notoriously customer biased. I have won these but usually because I reached out to the customer and talked it through. Either they didn't recognise or forgot the charge (couples who share accounts sometimes do this, they don't always communicate well so one disputes the others' purchases) or just want a plain old refund and thought clicking the Paypal button was easier than email.

Once I explain that I can simply refund them and it's quicker and easier, but they have to withdraw the dispute, it should happen.

If they actually stick to their story or go dark? I don't think I've heard many stories of Paypal siding with the business especially for digital goods.

They have business accounts too.