
Stripe And A/B Testing Made Me A Small Fortune - craigkerstiens
http://www.kalzumeus.com/2012/08/06/stripe-and-ab-testing-made-me-a-small-fortune/
======
aresant
At ConversionVoodoo we've found that the gains pulled out of cart-work are
staggering vs. other areas in your funnel - 50%+ improvements to be had even
on high volume / "well optimized" projects (10k+ sales/mo).

Three easy places to start:

a) Simplify the UI - Make it as simple as possible for people to enter their
payment details - large fonts, cross-browser tested, minimal pages, optimized
for the lowest screen resolution of your average user on up.

b) Reiterate TRUST messaging - testimonials or buying popular symbols (Verign
/McAfee / etc) and even dialing in the PLACEMENT of those logos is high-value
eg [http://www.conversionvoodoo.com/blog/2010/07/proper-
placemen...](http://www.conversionvoodoo.com/blog/2010/07/proper-placement-of-
trust-logos-can-make-a-huge-difference-in-conversion-rate/)

e) Implement a Cart Abandon strategy - either sending "instant discounts" via
email good for 24hrs to complete order, calling dropped carts, or hitting a
pop-up of live help or similar is easy money.

Add to this all the usual - proper messaging on buttons, lightning fast
response times, mobile optimized version too, etc and you instantly gain a
massive advantage over your competitors.

~~~
akldfgj
Wow, I am not a target customer for modern e-commerce. I would never return to
a store that had behaviors like this:

> e) Implement a Cart Abandon strategy - either sending "instant discounts"
> via email good for 24hrs to complete order,

Training users to haggle at checkout and not trust the list prices

> calling dropped carts.

harassing people offline after they leave your store?

> or hitting a pop-up of live help

Does anyone believe in live help? All I ever see it do it block content I am
trying to read, providing the equivalent of menu-driven CLI (the scripts
agents follow) when I already have a powerful GUI in front of me.

~~~
ovi256
patio11 and other wise people have said this much better than me, but here
goes: you are not like most people. You are likely to be a hacker, engineer or
at least a computer power user. Most people are not. These techniques will
work and print money with these other people which are not like you, and _they
are the majority_.

~~~
nitrogen
_patio11 and other wise people have said this much better than me, but here
goes: you are not like most people._

After realizing this, one must then get over the idea that accepting money
from such people is unethical.

~~~
rahoulb
Why is it unethical?

Many people are nervous - even scared - when purchasing online, because of the
numerous stories of "having stuff hacked".

Live help lets them know there's a human being at the end of the line.

Abandoned carts are often a manifestation of that fear - so again, contacting
them afterwards lets them know that there's a real person there.

And many people like the idea of something but when it comes to the actual
commitment get cold feet - discounts can help in that case.

~~~
nitrogen
I didn't say it _is_ unethical, just implied that it's possible to have the
_idea_ that it's unethical. Maybe accepting money from less technologically
capable people feels like unfair manipulation to some. Maybe the idea was
planted as unwitting sabotage by intimidated, less technologically capable
people trying to counteract a feeling of inferiority.

------
TomGullen
> This means that their credit card details never hit your server.

One thing I've been seeing recently is that some implementations using Stripe
DO have the CC details hitting their server. The most common case being when
Javascript is disabled the form posts to the website because the developer
didn't design with graceful degradation, a dangerous mistake when mixed with
credit card numbers.

It doesn't appear to be a problem for you (your payment page for CC info
doesn't gracefully degrade with JS disabled and is impassible - you might want
to fix that!) but I've seen it on other sites, and it's especially a problem
when other sites don't use SSL as a fail safe for this sort of case which I
have also seen. For Stripe it might perhaps be worth considering denying all
payments from non HTTPS pages for this reason. It forces the merchants to have
an SSL failsafe.

Also with CC info being entered on your site, it's presumably trivial for the
site itself to record the CC numbers. Trust is the issue here, I'm not going
to be entering my CC number on a site I've never heard of, with no reputation.
Stripe doesn't solve this issue, Paypal does. Stripe looks wonderful, but it's
not going to be suitable for everyone.

~~~
MBCook
I worked on something with credit card processing a few years ago. As I
remember, it doesn't really matter if the details hit your server, but the
point is you absolutely can not _save_ them.

No putting them in a DB, no putting the in a log file (not even the last four
or something like that), nothing. So if your form takes the numbers in, you
make an API call, and then you blank them in memory you were OK.

If you put them in the user's session, you were in trouble.

It's all insanely complicated, and the only good solution is "don't do it."
There's a good reason people use things like Stripe, PayPal, Authorize.net's
CIM (where they store it and certify that they are PCI compliant).

~~~
saikat
To make sure there isn't confusion here, having card details go through your
server, even if you aren't saving them, still can lead to certain PCI
compliance burdens (e.g. you may need to get an audit from a PCI auditor
verifying this).

Having the card never go to your server is the best way to make sure you are
PCI compliant, as you mention.

~~~
vampirechicken
One component is the transit security -is the data safe from interception in
transit (on the network). The other component it security of the data at rest
- is the data safe from interception if it comes to rest on your server
(sessions, databases, etc.).

From data security standpoint is is easier to let somebody else do it, but end
users tend to have a less satisfying checkout experience.

------
StavrosK
God I hate posts about Stripe with a passion. It's like saying "You've had
this pain in your back for the last five years? Well, I've got this miracle
pill here that will not only make it go away, but it will also _taste great_.
Oh, you're not in the US? Too bad then."

Stop reminding me I can't use Stripe all the time.

~~~
dmix
Stripe is beta testing internationally. I got an account in Canada about 2
weeks ago.

[http://www.businessinsider.com/stripe-square-
international-e...](http://www.businessinsider.com/stripe-square-
international-expansion-2012-7)

~~~
corkill
Great to hear, I'm just praying they remove the need for a social security
number in the US.

One of the main reasons we chose the US to incorporate in was for access to
business tools like this. But with neither founder having a SS number we can't
use the service.

~~~
davidcuddeback
If you're signing up as a business, can't you provide an EIN instead of a SSN?
I see the box for it in their account settings page, but since I'm using it as
an individual, I haven't been able to test whether that works without an SSN.

~~~
corkill
Unfortunately you need a SSN and EIN.

[https://answers.stripe.com/questions/if-i-have-an-ein-do-
i-a...](https://answers.stripe.com/questions/if-i-have-an-ein-do-i-also-need-
an-ssn-in-order-to-use-stripe)

~~~
peterjancelis
I don't want to speak in Stripe's name but I suggest emailing Stripe and
asking for an account based on EIN.

~~~
chmike
SSN shouldn't be published around since it is a key information to ones
digital identity. I guess they do this for clients which are not companies.

------
jeremymcanally
Stripe the service is fantastic. I just hope they can get the financial side
together soon. They sent me a 1099 on April 14 this year (you know, one day
before taxes are due). Fortunately I hadn't filed yet (I was literally typing
everything in TurboTax as the postman came). Not only was that usually illegal
(at least for traditional 1099's; I don't know if the same rules apply to
1099-K's...haven't looked), it was highly annoying as it was also the _second_
one they sent me (each with a different amount). Turns out they'd switched
payment processors or something at one point and didn't bother to tell their
customers to expect two 1099's.

Still using it. Great product. But I had to file an extension and crap to get
it all sorted out, which was highly annoying.

~~~
dennisgorelik
Do payment processors even have to send you 1099?

If I'm not mistaken, Google Checkout and PayPal did not send me 1099 - I just
had to report all the revenue received from them myself.

~~~
mietek
This is a good question and I would really like to see it answered.

~~~
dangrossman
They have to send you a 1099-K like all other payment processors... _if_ you
made over $20,000 in gross sales in the year. I got one from PayPal in 2011.

[https://cms.paypal.com/us/cgi-
bin/marketingweb?cmd=_render-c...](https://cms.paypal.com/us/cgi-
bin/marketingweb?cmd=_render-content&content_ID=marketing_us/IRS6050W)

~~~
somesaba
I see, but I thought corporate tax was based off profit, not revenue?

~~~
dangrossman
How would PayPal know what your profit is? 1099s are informational forms. They
inform you and the IRS how much someone else paid you. They are not directly
used in computing your taxes. The purpose of the new 1099-K is to prevent you
from receiving $x in credit card sales, then claiming you only had ($x / 2) in
gross sales on your tax return.

~~~
somesaba
Ah I see. Thanks!

------
dcaldwell
I work in the same co-working facility as an education-based startup that
switched from using PayPal(where user gets redirected to PayPal) to Stripe
(completely branded checkout) and their conversion rates increased 40%
overnight and have stayed at those levels. After digging into their API, we're
actually building our new company, MoonClerk, on top of Stripe's API. We'll
basically be an abstraction layer on top of Stripe so that non-developers can
use it and implement it on their site, with a focus on recurring payments
(even though we do one-time payments). We really want to allow non-developers
the ability to use Stripe.

~~~
FooBarWidget
How is this possible? Through Paypal customers can _also_ pay with credit
cards, and even more. They can use checks, or bank transfers (very important
in Europe where credit cards are not as popular), etc. Why would usage of
Paypal decrease conversion compared to pure credit cards?

My guess is that a lot of customers don't know what Paypal is and don't
realize they can just use their credit card.

~~~
joeblubaugh
And the PayPal flow is godawful - direct to a new page, get prompted to: 1\.
Log in. 2\. Create Account. 3\. Enter payment deets. (Small text near bottom
of page, not always available, depending on the merchant).

Even if you have an account, they don't consistently keep my default payment
method - often switching back to my bank account even when I've made a CC my
default.

This all adds up to a level of friction that I hate, hate, hate, hate as a
user. I can understand people abandoning a purchase at that point.

~~~
dcaldwell
In my experience with a nonprofit, on whose board I serve, this is exactly the
case with PayPal. Even if you're very upfront before you send people to PayPal
that yes, they can pay with a credit card, once they arrive at PayPal they get
confused. I've even had PayPal show me a popup ad for a PayPal branded
Mastercard when I was trying to checkout somewhere. Their UI isn't "branded"
like the site that the customer was just on so that's confusing in and of
itself. In addition, paying with credit card on a PayPal checkout page isn't
the main action - you have to search for it. Combine all of those elements and
you get a much lower conversion rate.

------
cperciva
_Stripe.js is a very well-implemented “or something”, where JavaScript that
they’ll provide for you hooks into your credit card form with trivial work.
(About ~6 lines for me.)_

If, like me, you don't like the idea of loading someone else's javascript into
your own domain, the "web page" side of things can also be done by dropping a
single <iframe> tag into your HTML.

------
MarkMc
In case anyone is curious, here's Patrick's sales graph:
<http://www.bingocardcreator.com/stats/sales-by-month>

You can see the big jump in May-July (although the jump for July is 32%, not
53%)

~~~
patio11
Oopsie. Thanks for the correction.

~~~
brador
Patrick, just noticed your Adwords spend went from $1000's to $0 suddenly.
Looks like a disaster. What happened? Is Adwords no longer viable?

~~~
patio11
I got married. Lots of balls to juggle. "Send credit card statements to VA for
entry into the bookkeeping software which automatically populates a few stats
on the BCC website" wasn't very high on the list. My actual spend is probably
as high as ever, but "Log into AdWords to check" also hasn't been high on the
list.

~~~
akldfgj
VA?

~~~
ovi256
Virtual assistant. Cheap off-shore outsourcing via the internet, a staple of
lean startup.

------
DanielBMarkham
_...I am not easily emotionally moved by git command lines..._

This is going on my "best of" list of HN-related excerpts

~~~
zaptheimpaler
My feelings exactly. That line literally made me feel warm inside for a
second.

 _I am not easily emotionally moved by git command lines, but this is clearly
somebody who understands me and what I need in life_

------
nickknw
"(A customer had — I kid you not — a lightning strike hit her computer during
checkout, and as a consequence the JS callback fired 36 times. This resulted
in 36 transactions, which Stripe processed without complaint. Oops."

I can't believe the good old 'computer was hit by a lightning bolt' wasn't in
one of your test cases, Patrick! I mean it's so obvious :P

More seriously, that is one of the wildest reasons for a bug I think I've ever
heard.

------
ashraful
@patio11 Thanks a lot for mentioning me in your blog again. I was wondering
why there was a spike in my visitor log.

I would love to do a redesign for Appointment Reminder if you're interested :)

------
maximilianburke
Patrick, I'm curious how you have been using Stripe as you are in Japan and it
seems they only recently began expanding out of America. Is the business
entity behind BCC registered in the US?

~~~
patio11
I signed up with my US address and banking information. "By registering for a
Stripe Service Account, you are confirming to be either a legal resident of
the United States, _a United States citizen_ or a business entity authorized
to conduct business by the state in which it operates." (Though I finally got
a DBA from Illinois, um, yesterday. Not related to Stripe -- a hospital wasn't
thrilled with the notion of writing a particular flavor of check to a natural
person.)

~~~
csomar
Could you elaborate more on this? What's a US address, and how did you get a
bank account?

~~~
patio11
So let me answer the question behind the question first, which I take to be "I
don't live in the US, but would like a US bank account":

<http://www.kalzumeus.com/2007/08/15/banking-for-the-uisv/>

Now to answer the question you asked: I have lived in Japan for my entire
adult life, but prior to that I grew up in the United States. I routinely use
my former address, which my parents still live at, for business purposes. Even
if it weren't trivial for me to open accounts online, I would still have
accounts in good standing from e.g. my college student days, which are
sufficient to bootstrap me into a customer relationship at any US bank.

------
bazookaBen
have to admit, that one of the reasons patio11 got Patrick (cofounder of
Stripe) to help with customer support is because he's *the patio11

but great customer service is still great, no matter what.

~~~
naz
Patrick is in the support rotation like most of us at Stripe. He'll answer
your email too if you send it on the right day.

~~~
sachinag
I would be very interested in how do you do ticket handoffs/tracking across
multiple non-dedicated support people in your rotation.

------
stevoski
I currently use FastSpring to handle purchases of my software. What's the
advantage to using Stripe instead of FastSpring?

~~~
corkill
Depending on your volume a lot of cash.

Fast Spring is 5.9% plus $.95 or 8.9% flat per order.

Stripe 2.9% + 30 cents.

~~~
sulife
Chase Paymentech - ~1.9% + $0.15 <\---- WINNER!

~~~
davidandgoliath
Stripe would end up costing an additional $20,000 a year or thereabouts for
us.

Due to their instant sign-up and almost instant approval however, they were
the only option for a quickfix while we await chase or braintree to approve
our applications. :)

Love their UI & easy integration though.

------
lrem
Just curious: are there any good options outside the US?

~~~
TomGullen
Basically, no. (I'm in the UK and am poised to jump to Stripe as soon as it
becomes available).

~~~
alexmunroe
There is the option of GoCardless (<https://gocardless.com/>) in the UK,
however they use the Direct Debit system rather than card processing which
does somewhat limit you geographically.

~~~
jusben1369
Aren't they really the "Anti-Stripe" more akin to Dwolla? Banish Credit Cards
altogether? Also, I heard there were changes in European direct deposit/ACH
laws (the approach Gocardless takes) that will allow them to be European, not
just UK, very soon.

------
jacobn
> "All three of these tests were null results. (i.e. No significant difference
> in aggregate purchases between either of the two options" (for goog&payp vs
> stripe, and several other combos)

This is a very interesting result. I would have thought that additional
payment options would boost sales on the margin i.e. increase conversion by a
couple of percent (not percentage points ;) for e.g. international customers,
or people who already have accounts with GG/PP.

Patrick: Any chance you could elaborate a little more here? Would be very
interesting to see some more detailed stats on this aspect.

~~~
patio11
Thanks for asking. So it turns out that two of them weren't null results, they
were results against the change significant at 90% confidence. (Important
difference for A/B testing practitioners, of only mild interest in context of
the post.) I updated the post with the correction.

If you really like stats, well, here you go:
<http://www.bingocardcreator.com/abingo/results> Rollover any conversion rate
for raw stats.

"Offer Credit Cards As Sole Checkout Option" tested Stripe vs. the three
checkout methods.

"Purchasing Page To Send People To"'s "Classic" is
<http://www.bingocardcreator.com/purchasing.htm>, "Cc Checkout" was the hacky
Boostrap CC form. (Not currently available online.)

"Offer Credit Cards As Checkout Option" was GC/PP/Stripe vs. GC/PP.

------
crazygringo
I can't wait to sign up for Stripe, as soon as they accept currencies besides
the USD!

My bank account is in the states, but I need to be able to charge Europeans in
euros, Brazilians in reais, Japanese in yen, etc...

------
brittohalloran
"Suffice it to say there is a) a customer group which needs between 8 and 15
cards and b) they really, really like pretty checkouts."

I think this is more "people who are on the margin where they MIGHT be
interested in paying for more cards can be convinced when they hit the pretty
checkout page". If you don't need more than 15 cards, you probably don't have
a burning need for the paid version.

------
maayank
"Is Stripe available outside of the US?"

"Currently Stripe is US only..."

------
propercoil
that's nice but you arn't US based because you live in japan so how did stripe
let you in?

------
angryasian
could it just be his audience, I'm incredibly against adding my credit card on
any site.

~~~
dennisgorelik
You are different from most of users buying on Internet. Most prefer entering
credit card directly.

~~~
angryasian
i find that really hard to believe in this day and age of cyber criminal and
so much activity in terms of stolen identities.

~~~
pbiggar
Credit card fraud doesn't really affect the end user, except in time lost
disputing fraudulent charged. Mostly the cost of fraud is born by the retailer
who receives no money even though they have already shipped the goods.

That said, in 13 years of credit card use, I have been defrauded 0 times.

~~~
angryasian
its still a huge pain in the a$$ , cancelling credit cards, changing any
account associated with credit card, waiting for new one in mail, etc. Just
the avoiding the potential headaches, is enough reason for me not to enter my
credit card in sites. I really can't believe the sentiment of the avg user is
that much different from mine

------
sulife
Or spend a few hours, get a merchant account through a bank and authorize.net
with much lower fees and a pretty standard API. Tons of classes to use
authorize.net with and super simple... no point of adding ANOTHER layer...
charging with a merchant account is trivial.

~~~
jasonkester
By hours, I assume you mean months. It took me just shy of two months to get
my merchant account set up a couple years back.

In theory, you could do it in less time, but only if you already have your
business licensed, registered and a business bank account set up in exactly
the right way.

But since that's part of the list of things you need to do to get a
traditional payment provider set up that Stripe doesn't require, it's a little
disingenuous to pretend that setup times are in any way comparable.

I set up Stripe for two of my products recently. In both cases, it was a
matter of minutes to get the account verified and processing real charges from
real credit cards and having them sent to my bank account.

~~~
jusben1369
I think it's fair to say Stripe solved 4 problems. i) The time it takes to get
a merchant account. It is only 24 - 72 hours unless something really goes
wrong through other channels but with Stripe it's immediate. ii) The
probability you'll get a merchant account (not a slam dunk for startups but
100% with Stripe?) Many developers hate dealing with financial institutions
and then getting turned down is a bit humiliating. All of that's removed and
iii) A great API/documentation that people love (although a few others have
that) and iv) Pricing that is very simple and straight forward.

In return for doing all that work for you their fees aren't as competitive as
other alternatives. That's fair given the work they do.

~~~
pbiggar
I'm going to add a 5th: Being really simple. The first time I tried to figure
out what a merchant account was, and a payment gateway, and all the associated
fees, etc, was just exhausting.

------
paranoiacblack
I've never heard of this service before but it looks quite interesting. I
wonder though, how feasible is something like this for paying membership dues
in a small club, for example? Is there some other service does this a lot
better?

~~~
paulbaumgart
WePay makes that particular use-case very convenient IME.

------
Irishsteve
Stripe is a great service, but I get the feeling their PR company or marketing
department promotes extensively here (Makes sense since its the target
audience).

~~~
saikat
For what it's worth, we don't have a PR company or marketing department
currently =).

We try not to post on HN unless we actually think people on HN will like the
content (and we've argued internally before and decided not to post stuff to
HN because it didn't seem useful enough).

~~~
Irishsteve
Eh, I wasn't meant to be so cynical (It just came across that way because I
suppose I am!)

