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Samwers Clone Stripe (paymill.de)
151 points by themichael on Aug 14, 2012 | hide | past | web | favorite | 163 comments

I don't get it. Why do US net startups very often make the same mistake of not expanding into the whole world quickly?

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?

Kickstarter is US-only because Amazon Payments is US-only (well at least, they only denominate payments in dollars).

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."


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.

Bears the question, why is Amazon Payment still US-only? We in Europe need stuff like that so badly. Hell even a lot of options that Paypal offers is not available in mainstream European countries. There is really a huge opportunity and need of Stripe / Wepay / competitors that work in Europe.

> the credit card is authed right away... but not charged until the project is funded AND the deadline is reached (up to 60 days).

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.

<< As you know, every Kickstarter project has a funding goal and deadline, both of which are determined by the project creator. When that deadline is reached, one of two things happens:

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. >>


That doesn't say that they pre-authorize the amount. The requirement they're probably referring to is the ability to send funds directly to the project creator.

They definitely authorize credit cards when you pledge. It's happened to me when I pledged.

Funny that all 3 companies you mention are money-related, which is a tough nut to crack in most countries. There's so many rules and regulations which all differ from country to country that I think it's quite understandable for companies like these to focus on 1 country first.

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.)

The challenges that finance related startups face on a global market are complicated and costly but to me the underlying problem is how startups are organized in the first place.

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.

You need to have found a viable business model, AND convince someone to partner with you, instead of cloning you - though it sounds reasonable that they would if you already have the infrastructure set up.

That said, it is an interesting idea, I know of at least one startup founder that's trying to do just that.

Finding a co-founder is indeed challenging and I can see how an offshore co-founder must seem like an insurmountable challenge but I believe it's possible. There are countless of bright and driven people who are hungry for a cause, more meaning in their life or just being part of something grand. You can find and recruit these people but you should primarily focus on great ideas and passion and not equity, money, etc. Also, tech entrepreneurs are so savvy and global these days that you can expect to find them on all kinds of communities such as HN and use filter them out based on documented past experiences (e.g. Github, Stack Overflow), recommendations (LinkedIn) or their online presence (blogs, twitter). Challenging but not impossible and destined to become easier as our community, business and recruting online tools improve.

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.

the regulatory environment variations between countries is a great point

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

Some suggested reasons, to add to the others cited:

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.

To add to this list:

- 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).

All good points. I also wonder if foreign finance companies like Stripe are waiting to see what happens with the Euro before making huge man-hour and investment commitments anywhere in the Eurozone. There could be big legal, financial, economic changes ahead there.

Great points.

You are vastly underestimating the effort required in setting up a payment gateway in a country.

But if you are Stripe and you get millions in investments ( i.e. http://techcrunch.com/2012/07/09/sexy-payments-startup-strip... ) you can afford to hire specific european nation experts, lawyers etc.. to get into these markets quickly

Thats a dangerous strategy for such an early stage startup. They need to validate their business THEN expand. Which is what they are doing now... Stripe just started beta testing internationally.

I can't reply to the child comment, but this is also relivant: http://news.ycombinator.org/item?id=4376193

The post also mentions being a CA beta tester.

Can you provide a link where there is information about the international beta testing?

You're underestimating bandwidth. You can't buy time, it's just not that easy. If it were, every start-up that raises millions would do it.

Hell, every listed company in the world would be global.

Why? It's just some contracts and APIs. And it doesn't explain all those other startups that deliberately limit themselves (and then later have to buy local clones because they did not expand quickly enough).

>> just some contracts and APIs

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.

It takes us about a week to get another account established in the target currency and set up an account with our payment vendor to take orders in that currency.

Translating the site to the target country takes longer than establishing another currency.

It's more than just contracts and APIs. It's ensuring that your practices follow that specific country's rules and regulations. Every country has a different set of regulations for handling money.

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.

In the UK it is called PCI compliance :)

(a lot of the relevant standards are now international in nature)

PCI [1] is actually an international industry standard that defines security practices for payment card processing. For example, it requires that your system is behind a firewall, that credit card numbers are stored securely, etc. Your system must be audited annually by a certified consultant. Stripe is -- presumably -- already compliant, since they already run a business that processes credit cards.

[1] http://en.wikipedia.org/wiki/Payment_Card_Industry_Data_Secu...

It is more than that, it is tax rates, money laundering the archaic regulation that differs between countries (even in the EU) a lot of boilerplate stuff needs to be in place.

Those difficulties and processes would be the same for Stripe as Samwers.

Yes, but they're each just trying to do it in a single country. It's a PITA to set up a payment gateway _anywhere_, but when you try to do it in multiple locations simultaneously it just becomes exponentially harder.

Groupon took your advice and (in my opinion) has contributed to their poor numbers. The problem is that when an established US company looks to expand, those countries tend to put a premium on expansion there. For example, if Groupon expands to the UK, sales people will ask for more money up front and put a premium on "acting faster".

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.

Guess who implemented Groupon outside of the US? The Samwer brothers. They created CityDeals, that merged with Groupon. One of the brothers has been in charge (unofficially, I think) of Groupon's international operations ever since.

Edit: Actually, Marc Samwer was head of international operations until earlier this year: http://gigaom.com/europe/marc-samwer-out-as-groupons-interna...

Groupon makes more revenue outside North America than it does within it (in Q2: $308MM for international; $260MM for N.A. on a total customer base of 38MM users)

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.

And what were all of the costs associated with expanding to the UK? What's the ROI of simply setting up shop vs buying a company outright?

> 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.

At Groupon's Q2 2012 earnings call[1], CEO Andrew Mason actually stated reasons why the International Market wasn't doing as well as it North American Market and in particular he focused on Europe, as highlighted by my points above.

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...

Facebook didn't do the mistake of buying the local German copycat (StudiVZ). StudiVZ is now dead.

haha....actually they DID want to buy StudiVZ :-)

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.

Same in NL (hyves.nl)

Startups are motivated to change the world. Regulators are motivated to keep the world stable.

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.

nice quote

"Startups are motivated to change the world. Regulators are motivated to keep the world stable."

The founders don't have the local knowledge and contacts to get through the regulatory hoops involved in launching a new payment gateway in dozens of countries.

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.

AFAIK - The founders are from Europe and originally tried to set up Stripe in Ireland. They couldn't find a European bank willing to work with them.

I think this is the article you are referencing: http://bernardi.me/2012/06/startup-copycats-youre-doing-it-w...

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.

That's the one, thank you for digging it out.

> The founders don't have the local knowledge and contacts to get through the regulatory hoops involved in launching a new payment gateway in dozens of countries

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 how do these founders know/trust local knowledge? Imagine trying to deal with an Eastern European market or Middle Eastern market, where bribes ("legal" and illegal) are necessary. How do you know you're not getting ripped off?

But this clone is in Germany. The fact that some countries are difficult to do business in doesn't mean that all countries outside the USA are difficult to do business in.

I wasn't talking about just Germany. The OP's point was - why can't they just throw money at any country.

Hire lawyers and consultants that decide that for them.

Paypal's biggest problem on it's entire history was related to expanding internationally too fast. You open a door to larger profits, but also open a huge window for frauds of all sorts. Not to mention the regulations, that differ A LOT in different countries (just as a quick example, crediting dollars in an account in Brazil is forbidden - there's no "support" for this kind of transaction, so you have to go through a conversion process that is not only bureaucratic, but also VERY error prone and time consuming...)

Why bother - they know the Samwers will do it for them and are very happy to sell.

I would say 43 million dollars is quite cheap to get a whole continent. It is not unlikely that it would've been more dangerous and more costly to do it themselves.

To their credit, Fab.com is one of the few companies to have thought of international expansion somewhat early in their lifetime (~12 months). They've acquired in the UK and Germany to date. It may have helped that the CEO has lived in Germany before however and had more of an international perspective than the typical US-born founder.

Yes, although in this case, the founders are Irish and must have been acutely aware this could happen, but really had little choice at such an early stage in a tough industry like this.

I was actually talking to the Stripe president about this. He was talking about the difficulties in expanding to new monetary markets and how they have to partner with banks and such. However, They are expanding to Canada, UK, & Germany very soon.

I just hope that Stripe don't make the mistake of forcing users who want to operate in Germany of using the site in German. Paypal assumes that everyone is German, who is in Germany. I live in Germany and I'm not German. I know lots of other people here who aren't German. Europe has a fluid movement of people between different countries. Physical location and language preference have no direct relationship over here.

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...

This is a disastrously limited view of what it takes to roll out a good service in a different country while retaining a good service in the home country.

That's actually great news, why would Europeans have to wait for an undisclosed date Stripe gives (or rather, doesn't give).

I agree, it's been a long time coming. Might be a pain for Stripe but competition is great for everyone else.

I was initially appalled when I first read about the Samwar clone factory. Now I agree, in cases like this they're filling a gap in the market.

The only gap is, that Recurly and Spreedly were not able to tell the EU founders that their service is available and working perfectly fine with European payment gateways.

They all have JS and REST-APIs and a lot more:

- http://recurly.com/

- http://spreedly.com/


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.

VAT is a tricky area with a lot of special rules - this is why most recurring billing providers don't take it on.

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

well. you could do your own invoicing if you're not satisfied with the pdf they generate. Stripe and Paymill don't do invoicing, too.

Ouch, that's a big minus from the point of view of an European company - not having to look for another app to generate invoices or futz around with generating your own was nice.

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.

Did I understand you correctly that:

1. Recurly is right to add VIES validation for out of country transactions.

2. They shall not implement this feature for in country transactions.


Those are special cases for Germany and Spain (I implemented that stuff for a german webshop that has to make the same exception). I'd guess it's the same for Spain.

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.

That's right if you use "should" instead of "shall".

Interesting. What are you replacing Recurly with?

Still evaluating. But we definitely don't want to stay there.

Braintree are yet to publicly launch their service internationally.

Yeah, but the problem is you still need a gateway, whereas with Stripe/Paymill, everything is included. Luckily, Braintree now supports EU as well.

You want a local, independent gateway and acquirer anyway (same jurisdiction, language, support…) which both Spreedly.com and Recurly.com support with http://www.WireCard.com/

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)

If you have problems paying the 50-100$ monthly fee, then your business is the problem.

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.

Seconded. I run an ecommerce site that has more than 100k in sales per year but only 10 to 20% go through credit cards. I sure will not file endless paperwork and do long integration just to move away from paypal. But I signed up for paymill in a second because it will provide what I really need (a nicer payment process) and spare me a lot of hassle. The processing fees on 20k is 580 for Paymill so it would even be cheaper. If the shop grows tenfold then sure lets integrate with the XML over fax machine API of a real bank.

If Stripe were to go out of business, it wouldn't really impact your use of Spreedly. They just charge the gateway, not store information there, so it's not a big deal.

I agree with the last statement, however, the chance of Stripe/Paymill going out of business pretty much equals that of Wirecard going haywire.

That's a bit bizarre, because one would expect a German clone to support the payment variants that are far more popular than credit cards in Germany.

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 Samwer bros are probably building to sell to Stripe, so they're using credit cards for Paymill to easily integrate into Stripe when that time comes.

I am curious what the alternative but far more popular payment variants in Germany to credit cards are.

Direct debit and instant wire transfer are very big in Germany. Many places, especially supermarkets, do not even accept any credit cards but only debit cards. Our checking accounts have evolved very differently to the US - nobody has been using cheques here for years, even before the internet is was all debit and wires.

And starting this year, due to an EU law, they have to reach the target institute the next business day, so it's quite convenient and cost-effective.

Yet i'm still tryin to understand why an international bank wire transfer without currency exchange (EUR -> EUR) and within UE (actually from Switzerland to Italy), is taking one week or more to arrive...

Italian banks don't exactly have a stellar reputation, maybe paying the fines is cheaper than upgrading the software?

I dont think it's a software problem (wire transfer between italian accounts are sent in one day thanks to the cited european law), somebody told me they're cheatin on this so they can have liquidity that they can borrow to customers. Having said that, many financial services are cheaper in italy than in Switzerland or UK if you dont include taxes.

Are the wiring rates low, relative to other countries around Germany or otherwise? How are wire rates for wiring money from say the UK? Who are the primary wire transfer companies in use in Germany?

Thank you for your time.

Wire transfers inside the EU cannot – by law – cost more than wire transfers inside an EU country (at least if you are transferring Euros).

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.

For individuals, wires are free. Businesses pay a few cents per wire. However, wires need about 2 days to process.

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.

However, wires need about 2 days to process

This is how you pay: the bank earn the interest rate for those two days.

That's less than 0.1 percent. I guess most people would accept higher tranfer fees to speed up the process :)

Not really, very few bills must be payed immediately, so most transfers are specified to be made at some later date.

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.

Money transfers within the EU have to cost the same as transfers within the countries themselves, by law (for transactions smaller than 50k Euro). And we're talking mostly direct bank transfers here, not something like Western Union.

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)

As a minor correction, the EU law on fees only applies to Euro-denominated accounts. I was somewhat unpleasantly surprised that I was charged significantly higher fees when I transferred some money from a EUR account in a Eurozone country to a DKK account in Denmark, since that case doesn't fall within the regulation.

Within the Eurozone, however, it's quite nice.

Yes, under 50k Euro and in Euro, should've said that a bit more clearer.

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).

Does the German direct-debit system work with online payments?

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 buyer: You enter your bank account number in the "buy" form of some website and that's it.

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.



Yep. Without direct debit, I don't see this working as a single source payment solution, and if you have to add some other API for the missing solutions anyway, this becomes much less enticing.

because nothing works like a credit card. e.g. the popular direct debit payments can be charged back very easily + you just have to search for an valid account number (= fraud).

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)

the popular direct debit payments can be charged back very easily + you just have to search for an valid account number (= fraud).

This sounds highly doubtful. Care to explain?

in Germany, direct debit transcation currently need an account number and a bank id (BLZ). Or BIC/IBAN (see Wikipedia).

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.

> 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.

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.).

direct debit ("Lastschrift") is kind of a reverse transaction. You tell your $own bank to collect the money from an account of your customer at $other bank

Oh right, I see, my mistake. I didn't know Amazon used this. In Belgium it's only used (afaik) by 'trusted' institutions, like utility companies. And as a customer you still need to authorize them the first time.

Charge back from credit cards works just fine, too. And using it with either banking system gets you in rather serious trouble if you're found to abuse the charge back mechanism.

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.

Looks like they're a PHP shop and only offer PHP client libs yet. Seems they didn't even understand the message Stripe has in kinds of developer focus.

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 :(

Why would you even care if they are a copy cat or not? Surely what matters is things such as delivering on promises, reasonable prices and quality of service.

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.

> Looks like they're a PHP shop and only offer PHP client libs yet. Seems they didn't even understand the message Stripe has in kinds of developer focus.

The APIs are REST. You don't need a client library.

The reason why you might consider it: Payments are still a very annoying topic in Europe. (imho)

I think that's an important point. They are successful because the American-only companies typically take a while to move into foreign markets, if ever.

I don't mind comments getting down voted, I understand it.

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.

The first few examples I saw where all JavaScript or Curl.

Are we reading the same thing?

I want European credit card billing _NOW_. Sadly, the only support german companies it seems. :-(

They have operations across Europe. Pretty likely they'll have plans to roll out everywhere soon.

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.

An opportunity to clone the clone in other European countries?

That just seems silly. However, a Stripe equivalent for the whole of Europe would be great. Clone or not.

There are _so_ many payment startups, so Paymill is the least of Stripe's worries. Just an ad-hoc list that have been recently funded:

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

BTW: Payleven is also a Samwer (Rocket Internet) incubated company. Payleven is obviously a Square clone.

Fantastic. Maybe this will put some fire under Stripe to launch in Europe...

Only seems to support German bank accounts at the moment (not any European) - though they're not terribly difficult to open.

consider alternatives:

- http://recurly.com/

- http://spreedly.com/

+ WireCard.com as gateway/acquirer. Works for all EU countries.

to my knowledge Chargify does not support a Euro-based gateway.

I'm a french citizen, do you know what is required for other EU citizens to open a german account? E.g, In the UK its a nightmare, but in Spain, it seems easy

You also need a German business license.

On a related note, they also cloned Square in Brazil and Europe (payleven.de/.com.br)

For people thinking about international expansion as just translation: beware, here be dragons.

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

Sure, startups & companies should operate worldwide, but the Samwer business model is really scummy. I could understand if they would build the clone with the background to avoid monopols, but they just try to fill a niche market with a stolen idea and make money with it. Just look at http://www.lazada.com.my/, an amazon clone for countries, where amazon doesn't operate(d) yet. They even use the same layout. I wouldn't say that cloning something is bad in general, if your main focus lies on the extension of an existing idea, but the Samwer brothers nearly copy the idea 1:1 without innovation and creativity and sell it to the mother company later. Thats a really bad motivation for the real entrepreneurs, who try to be innovative. Startups should really start worldwide, to avoid that these copycats make further money with their ideas.

As a Malaysian, I know more people here who use Amazon.com than those who use Lazada.com.my, even though Amazon doesn't technically serve our country.

Branding and the first-mover advantage are very important.

Interesting, thanks for bringing this up. Does amazon.com charge extra money for the delivery to Malaysia or do they ship for free, because they doesn't serve Malaysia(yet)?

International shipping to Malaysia is almost definitely not free.

You are assuming that all businesses should innovate. That is not true. Mostly businesses are about execution and price. Samwer is playing by the rules and winning.

They've even copied someone's logo!


Well, in their defense, the Samwers' incubator is called Rocket Internet, so it's more like they're copying themselves.


I don't see the Samwers' names on any of the Rocket Internet pages. Are you sure they are connected?

Edit: Never mind, googling "rocket internet samwer" shows a lot of connections. Still surprised there is nothing on the Rocket Internet pages.

I'm not a big fan of the Samwers, and try to avoid using any of their services. And this time I might end up using their service. I simply have no option. This is not only proof of their lightening fast execution, but also how all others fail.

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.

This is great news. I'll be adding subscription payment options to my UK-based startup in a few months.

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.

I would love a Stripe Clone in Brazil. It's really annoying and expensive to set up payment in web apps here in brazil.

Somebody knows what would take to clone a startup like these? Besides money?

Everybody is taking about Stripe. But how is Stripe different from existing/established services like Digital River or Plimus?

Well, that was inevitable. I don't care if it's Stripe or someone else, I just want a service like this for New Zealanders.

The best part about Stripe is, and has always been, their amazing understanding of developer needs and their top-notch customer service. No copy-cat can provide that at the same level as Stripe. Helping a website accept credit cards is only half of the equation.

I wrote a blog post asking for this to happen in the UK awhile back. http://peebs.org/free-business-idea-for-a-united-kingdom-sta...

Glad to see it starting to happen in Europe!


Have been around for a while too

Actually these guys are like Square not Stripe - getting my payment companies confused.

That's a square competitor. Still awesome nonetheless.

I think this is great! I assume Stripe didn't have imminent plans to launch in Germany anyway. Looks like they have a rate of 2.95%, which is pretty good. Especially for outside the US.

This just a payment provider like many others. The only difference I see is that they use a 'REST-like' API instead of the usual Web-Service API.

The Samwer's are effectively a tax on innovation.

They contribute nothing new, only cut into the potential profitability of web innovators

They are delivering value to people around the world. Those people now don't have to wait on the expansion plans of companies which don't have globalization built into their DNA. Also they are a live example of what relentless execution looks like.

If I get to repeat a patio11 by integrating them they might earn me a lot of money. Also how innovative is Stripe really. They provide a service that is fairly obvious when you worked with Paypal or a large bank. The point is providing the service is a lot of hard work, thats what we pay them for. The mere idea of payments should not suck this hard is not their business. It is actually depositing your customers money in your bank account and frankly they don't offer that in Germany.

But they are here in Germany where Stripe is not! So for us germans the do contribute.

Now that Europe has had this, where's Canada? Am I still stuck with PayPal as my only viable option for payments?

Stripe's Canadian beta started within the last week -- http://news.ycombinator.com/item?id=4355507

* Germany has this. Doing payment processing in a range of countries is hard.

My apologies for the mistake. Yeah, it's hard which is why I think the brothers are just doing a great job of exploiting opportunities.

Will never be as good as Stripe. Mostly because Stripe is coded by it's founders, get support questions answered by their founders who will even teach you how to use git. :)

That stuff is great, but doesn't help EU customers if they can't use it. So at present this thing is already better than Stripe, because "90% of success is showing up". The repeated message from EU countries is "get here, we need you", and the repeated answer is "we'd love to, but can't yet". That's handing the business to Samwers on a silver platter.

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)

You should start the South African Stripe ?

Nobody cares about that. Customers will care whether they can have service at all in their country. If Stripe isn't there, then others will take over. It's all about business, not who's the nicest guy in town.

This is a beautiful twitter bootstrap site...

Stripe is now in hot pursuit ;)

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