
Ask HN: Stripe for 10k plus transactions? - msencenb
My next saas product is going to be annual only, b2b with a price of 10k or more a year.<p>I know Stripe has a theoretical limit above this; however I&#x27;m concerned that credit card companies will often trigger alarms for such high charges.<p>What are the most common ways to collect big, yearly contracts? Paper checks? Stripe? Some sort of bank transfer API?
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eric_bullington
> What are the most common ways to collect big, yearly contracts?

Yep, at least in the US, paper checks for some (still!) and wire transfer for
others. You send them an invoice, and they send you an (actual, paper) check
or make a wire payment to the account number you put in the invoice. Both
should be pretty much free, if you have a decent bank (although some banks
will charge a few dollars now for incoming domestic wire transfers).

I think for a yearly charge of $10,000+, it's probably worth the pain in the
ass factor to invoice the charge, particularly given how much you'll save
(about $300 if you use Stripe, more for others, assuming 10,000 charge). Most
banks have banking apps now that let you cash checks using the app, so if you
really get going with 10,000 checks flowing in by the batch, you can hire some
one to help deposit them via app or dropping them by a bank branch. Not a bad
problem to have, if it happens.

Just realize that most companies operate on 60 or 90 day terms, and some even
more. You can often negotiate for 30-day terms if they really like you/your
product and you're firm about it. Just be sure you factor this into your cash
flow. And have a process in place for what to do if you don't receive payment
by then.

Actually, regarding Stripe, and I may be wrong about this, but I don't think
most companies will let you set up a recurrent yearly credit card payment of
10,000 dollars, at least not without going high up the corporate food chain.
If that's the case, you'd need to break it into a monthly charge to go the
Stripe option.

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nickfromseattle
>Just realize that most companies operate on 60 or 90 day terms, and some even
more. You can often negotiate for 30-day terms if they really like you/your
product and you're firm about it. Just be sure you factor this into your cash
flow. And have a process in place for what to do if you don't receive payment
by then.

A $10k invoice will often require your point of contact to open an internal
Purchase Order (PO) with their finance department. If your contact doesn't
make purchases often, it's really easy for them to miscommunicate internal
requirements to get you paid on time, causing additional delays on top of your
60/90 terms. I strongly recommend asking your point of contact to connect you
with their finance teams to confirm requirements before the software is
delivered.

All companies have different requirements to pay vendors, with larger
companies having longer, more convoluted internal processes. Clarifying the
process to get you paid before you deliver the software pays dividends down
the road by minimizing your time collecting late payments, 10x so if you are a
solo founder or small team with more important tasks to focus on.

~~~
eric_bullington
Yes, this is an excellent point. And if you run into problems, work directly
with Accounts Payable, not through your company contact, if at all possible.

Better yet, do as the parent comment recommends and try to make a contact with
Accounts Payable to begin with (although that's not always possible, depends
on company).

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dangrossman
Yes, paper checks or bank transfers (ACH in the US, or wire transfers you're
international). You send an invoice, you get paid 30-90 days later.

Stripe can help you with doing ACH programmatically, if you want to offer an
online payment option: [https://support.stripe.com/questions/accepting-ach-
payments-...](https://support.stripe.com/questions/accepting-ach-payments-
with-stripe)

There are a few reasons transactions of this size are almost never done by
credit card:

* Cost ($300 for CC, $0.25-$5 for ACH, free for checks)

* Fraud risk: Someone buys your product with a stolen card or without their boss's permission, they can reverse the charge and you have little to no recourse.

* Chargeback rate risk: You need to have less than 1% of your processing volume be reversed to accept major credit cards. With large transactions, a single reversal can put you over the limit.

* Large tickets, and annual billing, are both red flags when underwriting a business for credit card processing.

A business with very large transactions is risky to take on for the merchant
account provider, so you may not be able to find one, may not get reasonable
processing rates, may be subject to risk reserves that create cashflow issues,
etc.

If you go bankrupt and don't fulfill your contract to 20 clients, and all 20
charge back their payment to you, it's the merchant account provider that's
now lost $200K they can't recoup. They don't want that.

If you have a major outage and 10 clients charge back their payments, a
processor needs $10 million in good charges to balance that $100K in bad
charges from you just to stay below their mandated 1% chargeback rate by
Visa/MC. That's too much to ask of many local banks and other MAPs.

------
pjg
Digital Checks sound like the way to go for this. Multiple YC companies like
cleanly.com stilt.co are already using them. Both for collecting funds as well
as disbursing funds. Unlike ACH there are minimal on-boarding issues and UI/UX
is much friendlier than ACH. Feel free to try it out at
[https://www.checkbook.io](https://www.checkbook.io)

Also there's an API and integrations with Wordpress and Magento. Price is a
fixed $1/Check. No percentages!

Disclaimer: I work for checkbook.io

