
Choosing a payment provider for your Europe-based SaaS startup - stkhlm
http://blog.gogemba.com/post/58534526652/choosing-a-payment-provider-for-your-europe-based-saas
======
apexauk
(I work at Stripe, here in London)

Great write-up - I hadn't seen that graphic before but it's great - full
credit to the original source
[http://startingandsustaining.com/](http://startingandsustaining.com/).

As a Stripe-r, I can't complain about the OP's conclusion in any way :) As
stated they are based in Denmark, and Stripe is not currently available for
Danish businesses - that's on us to fix, and we're certainly working on it.

However, re: the title "How to choose a payment provider for your Europe-based
SaaS startup" \- the situation in Denmark is not representative of Europe as a
whole.

Stripe has now launched here in the UK[1], and we now have betas available in
Ireland, France, the Netherlands and Belgium - with the latest released in the
past few weeks. So if you're based on one of those countries, please do give
us a look. And if you're based elsewhere, well - I guess we need to keep up
the pace and hurry to your country ;)

[1] [https://stripe.com/blog/introducing-stripe-
uk](https://stripe.com/blog/introducing-stripe-uk)

As other commenters have mentioned, it's really easy to make mistakes
comparing complex pricing across different providers. With Stripe and PAYMILL,
the fees quoted are all you pay. With Braintree's interchange+ pricing, they
actually state themselves that "Total costs are typically 1.8% to 2.6% of the
transaction. There is a minimum cost of €100 per month"[2]

[2] [https://www.braintreepayments.com/faq#pricing-
question](https://www.braintreepayments.com/faq#pricing-question)

~~~
Silhouette
_With Braintree 's interchange+ pricing, they actually state themselves that
"Total costs are typically 1.8% to 2.6% of the transaction. There is a minimum
cost of €100 per month"_

And that means it _can 't_ be as low as 1.8% of your transaction unless you're
consistently taking in the region of €5,500+ per month -- low revenues for an
established business, but not a trivial amount for a bootstrapped start-up
looking for a payment service to launch with.

I've wondered whether this is a deliberate business decision by Braintree to
discourage applications from brand new (and I assume on average more risky)
start-ups. Then again, established businesses with serious revenues would
presumably be considering a more traditional set-up where they can negotiate
much lower rates with heavyweight payment services, and would perhaps care
less about the hassle of setting those things up compared to the ease-of-use
for developers of modern payment services. I'm not sure which part of the
market Braintree are really trying to own at the moment: they do seem to have
a USP among the "developer-friendly services" in the number of different
payment methods they support through a common API, but this doesn't even seem
to merit a mention on the front page of their site.

~~~
ig1
If you're charging customers and aren't making enough in a few months to cover
the minimum fee then your business is going to be in trouble in any case. Sure
the percentage is going to be crappy, but if you're a SaaS business and your
margins are so small that the percentage is worth stressing about in the early
days then you're probably doing something wrong.

(I bootstrapped my last startup and 100 euros is roughly what I was paying
SEOMoz, my accountant, etc. on a monthly basis)

It's way more important to just get something working and out-the-door and
grow the number of customers then to spend a lot of time over what comes down
to a relative small amount of money, you can always re-negotiate the fees when
you grow and the absolute amount becomes meaningful.

~~~
Silhouette
_If you 're charging customers and aren't making enough in a few months to
cover the minimum fee then your business is going to be in trouble in any
case. Sure the percentage is going to be crappy, but if you're a SaaS business
and your margins are so small that the percentage is worth stressing about in
the early days then you're probably doing something wrong._

Right, so if you're in that position, why would you put up with the onerous
application process for a service like Braintree if you have a simpler
alternative like Stripe available and it provides the functionality you need?
You want a payment service that takes as little time as possible to set up and
then just works, because you have a million more important things to be doing.
Any advantages Braintree might have had if their pricing did work out more
favourable than Stripe's flat rates is instantly lost because they can't give
straight answers to too many basic questions (like "What does it cost me to
collect a payment?") and their API and documentation are significantly more
complicated.

~~~
ig1
I've not implemented either Braintree or Stripe before, but I'd agree with the
principle of just doing whatever gets you out the door the fastest (for a
subscription business I might including the proviso of using a service that
will give you card portability so you can transition off in the future).

------
robotmay
Well I've worked with pretty much every provider available in the UK, so here
are some brief opinions on the bigger ones:

PayPal: Awful, API changes regularly without warning (including changing
parameter names for no apparent reason)

SagePay: Truly awful, datacentre seems to catch fire regularly

WorldPay: Awful, but not as bad as SagePay

Barclays ePDQ: You have to fill out an Excel spreadsheet to get a developer
account

GoCardless: Great API, more or less limited to UK customers

Paymill: Good

Stripe: Very good

Braintree: Very complicated but not bad

And if you're downvoting me for this, feel free to ask for reasons why for
specific providers. I have genuinely used all of them for at least one
project.

~~~
cpncrunch
I've been using various online credit card processors since 1995, and my
experiences are slightly different. Worldpay is absolutely excellent - their
service is amazing, and their support is absolutely top-notch. Definitely the
best solution if you're in the UK.

I'm not sure what you're doing with paypal, but there haven't been any API
changes that have affected us in the 7 years we've been using them. In fact I
just looked at our paypal code, and it hasn't really changed at all since
2007.

~~~
robotmay
I've had so many issues with PayPal that it's just unreal. First up, they have
something like 10 separate API interfaces for taking payments. Second, the
documentation is -terrible-.

We implemented one of the APIs (can't remember the name, it was something
stupid at least) recently, and half way through our implementation the
parameters we received back changed name for no apparent reason, and the
PayPal sandbox was entirely changed; this resulted in our account becoming
broken, constant errors where code was previously working, and it was never
resolved.

WorldPay is incredibly outdated, underfeatured, and rarely improved. Their
support is pretty decent, however.

With Stripe and Paymill now available, I don't see any reason why people
should continue to use what we've been struggling by on for the past few
years. They're so much better that I can't even really draw a comparison.

~~~
cpncrunch
I just had a look at Stripe, and it does seem like a good service. If I was
building a new site I'd probably consider it. The annoying thing about paypal
is that it doesn't allow you to change subscriptions.

------
lucaspiller
I'm not going to get any "OMG new stuff" love for this, but we are currently
in the process of integrating with Worldpay. We are using their "hosted
payment page", which works pretty much the same as Paypal in that you redirect
the user to them to enter their card details. However unlike Paypal (who we
currently use) you can fully customise the pages, so it can match your site
and appear pretty seamless. They also provide a full merchant integration, but
we didn't want to have to deal with the full PCI compliance thing.

The main reasons why we chose them are:

a) None of the shiny new providers (we tried Braintree and Paymill) would
accept us as we are a travel booking service.

b) Their rates were better than anyone else we looked at.

If you are taking a large volume of payments you may want to consider
switching to them. However for a small startup probably not, as we have to pay
a fairly large monthly fee on top of transaction fees (but overall it works
out cheaper).

EDIT: Also regarding currency conversion costs we accept payments in USD, EUR
and GBP and have bank accounts in all three.

~~~
goldfeld
Well it seems their "World" doesn't include Latin America, same as all the
other shiny new solutions, so PayPal and BitCoin are still the only game in
town down here in Brazil.

~~~
lucaspiller
What are the main payment methods there?

~~~
goldfeld
Credit cards for sure, I suppose many are international too so americans can
easily get our money. It's the other way around that's tricky, setting up a
SaaS from here and getting a payout. PayPal is here so they work with
Brazilian banks. As for all the other payment processors, no luck. Though
someone here linked to Intel's solution[1], which proxies through PayPal and
seems like the way I'll go.

[1]
[http://software.intel.com/cloudservicesplatform/service/comm...](http://software.intel.com/cloudservicesplatform/service/commerce-
services)

------
pilsetnieks
Of all the things, Intel also has a payment processor as part of their cloud
service platform -
[http://software.intel.com/cloudservicesplatform/service/comm...](http://software.intel.com/cloudservicesplatform/service/commerce-
services) \- I don't know why it's still labeled "beta" and how and if it
actually works but it seems to work in about 50 countries now.

------
Silhouette
Have Braintree really standardised their transaction fees at the 0.9% + €0.10
rate shown in the table near the end of the article? I thought that was _in
addition to_ the interchange rates, which vary widely. The difficulty in
figuring out what a transaction would actually cost us with Braintree was one
of the major reasons we never got going with them.

Edit: The Braintree FAQ[1] appears to agree with this. It also says they have
€15 as their chargeback fee, not €11 as shown in the table in the article.

[1] [https://www.braintreepayments.com/faq#pricing-
question](https://www.braintreepayments.com/faq#pricing-question)

~~~
sleepyhead
Yes, it is plus interchange fees. And €100 minimum per month in fees.

------
tchvil
We are Belgian and happily use [http://adyen.com](http://adyen.com) for 3
years now. Receiving payments from about 60 different countries without any
problem.

The implementation was easy. And on the rare occasions we needed support, they
were very quick to respond.

I didn't do a price review recently, but at that time they were the most
interesting for us to start.

------
WA
Interesting summary. I'm located in Germany and I'm thinking about switching
from PayPal to some other payment provider.

Does anyone have experience with chargeback fees? PayPal doesn't have
chargeback fees and I'm a bit worried that chargeback fees might have
unexpected consequences. Many of my transactions are 6€ or 12€. When does a
chargeback fee trigger exactly and how likely is it if you have a customer
base of a few thousand?

------
JonoBB
Having tested and used most of these solutions in the UK, Stripe wins hands in
almost all scenarios for bootstrapped companies. Its just so easy to get up
and running, and their support is top-notch.

There is one big downside though - you can only charge in USD, GBP and EUR. We
sell to other countries who like their pricing in local currency, and this is
a major issue for us.

------
passwert
Does anyone know of a service provider which also allows you to SEND money
(via wire transfer) to customers? I've been looking for that since a long time
and contacted airbnbs provider, but no reply at all. This function is used if
you are acting as the middle man between 2 parties.

------
stephanos2k
I evaluated payment provider for my Germany-based SaaS and came to a similar
conclusion. Paymill is great to get started, but Braintree wins in the long
run (just do the math).

Obviously when your product is growing you don't have time to just rewrite the
payment processing and migrate all data to a different provider.

I guess this is where something like "Spreedly" comes in. It is an additional
abstraction that allows you to switch payment providers easily. At least so I
read. Does anyone have experiences with that?

~~~
ThomasTesselaar
I just did the math real quick as well, and i really don't understand their
choice for Paymill. Braintree's rates are so much better, they are loosing so
much money in the long run!

Posted a chart in the comments at the blog.

~~~
ned
In the long run yes, when they have revenue. But they mention:

 _But then, one day when I came back to their website, I saw that they had
added a minimum fee of €100 to their plan, and that unfortunately tipped the
scale for us, as we pay everything on our own, and we have zero revenue coming
in._

So the problem is for the first few months during which you pay everything out
of your own pocket. It probably all depends on how confident you are that
you'll get revenue.

How simple/hard is it to migrate from system to another?

------
lbarrow
Great article! FYI, I'm an engineer at Braintree. We'll be eliminating our
monthly minimum very soon - stay tuned.

------
purplelobster
As someone who's not familiar with payments, how often do chargebacks
generally occur, and why are they so expensive?

------
itengelhardt
Thanks for the blog post and going into how difficult it is to accept payments
in Europe.

I would like to add one - IMHO important - point to PayMill: They do not
support credit cards from the USA.

source: [https://www.paymill.com/en-gb/pricing/](https://www.paymill.com/en-
gb/pricing/) (click on "fees for card types and countries" \- the US is not
mentioned in that list)

~~~
kilian_paymill
hi all, we support cards from the US (although processing and payouts in USD),
but we can not onboard merchants based in the US at the moment.

best

Kilian (MD PAYMILL)

~~~
itengelhardt
Hi Kilian, Thanks for clarifying this! Good to hear

------
tobeportable
Hipay comes in handy for the card + digpass combo

