If nothing else, even if 0.05% isn't much, I'm happy to see if they can start a bit of a pricing war here. If it drives payment costs down across the board, all the better.
I think the unfortunate aspect of these clones is that they're lazy. I have huge respect for anyone that innovates in payments -- I know how hard it is, and I'd imagine it's even harder to do that as part of a larger company.
What I find disappointing is when a product copies everything about Stripe -- everything from Stripe.js to the "live/test" switch to the "1/2/3" getting started pop-up when you create your account to the nomenclature of "InvoiceItems" to the ordering of tabs in the account settings.
It's certainly MasterCard's (and anyone's) prerogative to do that, but I don't think it's particularly worthy of support from other engineers and makers.
We should encourage each other any time we see great, original work -- creativity is hard, and new ideas are often delicate in the early days. It'd be really cool if MasterCard did that, but Simplify unfortunately doesn't seem to have anything that's new. (Please correct me if I'm wrong!)
Competition (or "clones") were around 100 years ago, continue to exist today and will be around for the next 100 years. Today's innovation is tomorrow's commodity thanks to competition. This is good.
Is it disappointing that MasterCard launched a similar service? Sure, I would too be disappointed and I sympathise.
Having said that, stating that "a product copies everything" is not really true. They can not copy execution, culture, customer service, customer loyalty, etc. You have that on your side.
People think that Ford Motor was one of the first (if not the only) car manufacturer in States in the early 1900s, but it was quite the contrary. The car was a revolutionary technology: it had a combustion engine, it was fast, etc. Over 100 car companies were launched in the early 1900s. All of them car startups. When the technology goes in one direction it is difficult to be the salmon that swims upstream, in the opposite direction. To tell those +100 car startups to "go and innovate, I own the combustion engine on top of four wheels" is simple unrealistic. Expect competition, that's my point.
How did Ford survive having less resources than many others? How did Ford survive the great depression? Execution. It improved the assembly line, vertically integrated to bring more production in-house, etc.
Stripe's case should be no different. Today's technology and innovation is commoditised in months. Execution can't be commoditised. Don't expect competitors to rest on their laurels.
There were over 1,800 automobile manufacturers in the United States from 1896 to 1930. Very few survived and only a few new ones were started after that period.
Not suggesting you didn't know that, but it's still worthwhile to point out.
Imitation is the sincerest form of flattery, and all that...
First I wanted to say I think this is a bit of a non-sequitur because it's not like Stripe invented a new space here, they entered a crowded space which had already seen relatively recent innovation from PayPal and Braintree in preceding years.
But then I got thinking some more and I don't know where you get this idea that there is an implicit attitude that anyone owns anything in SV. Sharing of ideas and me-too companies are everywhere in SV. Sure people consider it kind of a douchey move to do a clone of your friends company after he shared his whole execution plan with you, but I don't think that indicates anywhere near as strong of an implicit ownership as you are describing.
The bottom line here is not that MasterCard are in the wrong, or that it's not beneficial to the ecosystem as a whole, but just that they don't deserve any special applause for some pointy hair somewhere deciding "OMG Stripe are going to eat our lunch, put your 100 best engineers on reverse engineering this API posthaste!"
My disappointment with MasterCard isn't at all that they're entering the space (hey, that should be good for the world). It just feels lame that they gratuitously copied every single minute detail, far beyond what you'd have to copy to build "a MasterCard version of Stripe". They even copied our code sample gists.
But I definitely didn't mean to imply more than that -- some idea that MasterCard shouldn't compete with us, or even that they shouldn't compete with a functionally similar product. On that front, I'm totally cool with it, and may the best product win :-).
Simplify might be a Stripe clone, but if it's just as reliable, cheaper and allows me to get my hands on my money faster, why shouldn't I consider it? I'm an engineer/"maker" but that doesn't mean that I select commodity services based on emotion or ideology. After all, saving money and getting my money faster supports my ability to continue making stuff.
I need to accept payments online. I am your customer. You should be trying to convince me that Stripe is the best payment solution for my business, not labeling a new competitor "lazy" and suggesting that I avoid it because it opted not to reinvent the wheel.
> We should encourage each other any time we see great, original work -- creativity is hard, and new ideas are often delicate in the early days. It'd be really cool if MasterCard did that, but Simplify unfortunately doesn't seem to have anything that's new.
I really, really like Stripe and think you have built a great service but reading this makes me cringe.
Innovation and first mover advantage do not guarantee success. In fact, sitting back and following can be a smart approach: it's less risky and less costly to let others invest in new ideas and "copy" what gains traction in the market. I know this is blasphemy in Silicon Valley, but it's the harsh reality of business.
We'll see if the market finds Simplify's lower pricing and faster payouts compelling enough, but I don't think it's fair to insinuate that the only source of legitimate, meaningful and effective differentiation comes from building something "original".
The point I was trying to make was fairly narrowly scoped: needlessly copying even tiny details of Stripe is pretty uninspired.
(P.S. Any chance you could drop me an email? I'm email@example.com.)
I disagree. Copying tiny details is a very smart strategy for non critical parts of your product. Do not try to reinvent the wheel...and the axle and the airbag, all at once.
Designers should focus on what's unique and different about their offering, and leverage from the community the other parts. I'm sure Stripe put a lot of design time into those API details. Simplify is bringing new features to the market (faster payouts and lower prices), and so their time and money is better spent on those than trying to also reinvent API design. And it's better then to just copy verbatim than to put up the first thing that comes to mind.
I could otherwise argue that Stripe's use of JSON and HTML is pretty uninspired because Braintree was doing it years before.
Is it because of bullshit regulations everywhere? Why has it taken you forever to set up shop in a couple of places in Europe? Why not the rest too?
Seriously. What is it?
- Legally, we need to be able to verify identities. We want to do this frictionlessly and in real-time rather than with some paperwork sheaf that gets mailed to you a week later. The solution looks different in almost every country.
- Visa, MasterCard, and co. have rules that effectively prevent you from using the same backends in different areas. (E.g., you can't use the same backend in Europe and the US.) So we have to rebuild a lot of our stack in each country.
- The infrastructure for doing daily deposits into bank accounts also differs by country. Often, the basic operation is relatively easy, but figuring out all of the edge-cases is hard.
- The laws in every country differ. Sometimes, we need to obtain licenses or something like that.
We could have hacked around this by partnering with existing payments companies in each area. That's what people usually do -- it's much cheaper and way faster. The downside is that you end up with a much worse product than what you have in the US. For obvious reasons, we didn't want to do that.
So we now have an office in London that's working full-time on bringing Stripe to other markets and we're processing production transactions in four countries.
I'm sorry that it's slow :(. I guess the tl;dr is that a substantial fraction of the work required to build Stripe in the US has to be repeated in each new country -- the work and complexity scales O(n). We're still just 55 people, and it takes time.
(Still, if you'd like to help speed it up, we're hiring!)
I don't suppose you have a rough estimate for UK roll out do you? We're planning on adding a payment gateway to our system over the next 4-6 months or so.
We'd really love to use Stripe after looking at the APIs for every other payment gateway service :)
What's the reasoning behind that restriction? Could you just re-use your backend stack, but use a different data center / machines, that's isolated from the backend of other countries?
Why others don't do that, but instead ask me to file all these documents by printing and scanning them?
Much, much less restrictive than Stripe, and cheaper to boot. Now adult websites can switch to this instead of CCBill (which I find more sketchy.)
I actually find it more interesting that quite a few of the obviously copied bits aren't even really worthy of copying if you're already going through the effort of building an entirely new product -- they're pieces of our product that could stand to be improved. :)
Could care less about 2.85% or other silly gimmicks.
If people are saying "Feature X in stripe is awesome", it isn't lazy to copy, it's smart (That's what startups would do). They quickly catch up to your product and hopefully (for them) innovate further.
I get you'd be flustered/angry you have a worthy competitor (with way more resources than you), but companies don't have to be innovators to be competitors. You innovated, and got first mover advantage, now comes the competition.
And honestly, the things you say are "copied" are fairly lame things that anyone could've done. It's not like they stole any secret sauce, like when Boeing used industrial espionage to steal information on rocket manufacturing from Lockheed Martin.
Competition exists. You don't have a right to monopoly. Suck it up, because you just aren't that original.
The existing credit card companies have an oligopoly on payment, and the more people there are in this space, the better options we will have.
Different products entirely, I realize—but heck, Simple’s twitter handle is even @simplify.
Hope Stripe get there first, as I'd like to support them over Mastercard.
So what have they done? They've built a wrapper around Priority Payments Services, an independent sales organization of Wells Fargo. (For reference, Stripe is also an ISO of Wells Fargo Merchant Services).
Which is all a long way of saying that MasterCard went pretty far out of there way to build this system. They must really see value in selling directly to merchant developers.
There is another possible story here: maybe the ISO wanted to compete with Stripe, they built the system and site, and asked MasterCard for their branding.
To my immediate recollection ISO 8583 (the standard set out for credit card transactions) doesn't have much info on independent sales organizations (a different ISO acronym). This is all to say that the transactions are through a merchant account set up by Stripe for each particular merchant at Wells Fargo Merchant Services, then through First Data and only then hit MasterCard. Again, I'm not certain, but I'm not sure its a question they can easily answer from their data.
Edit: Yeah, after registering, confirming my email and trying to apply for a full account, I know that it's only for America. Sigh...
There's a tremendous amount of froth in those rates.
The flat-rate pricing these new aggregators offer at 2.7-2.9% already builds in taking a loss on some cards by making it up on ones with cheaper interchange rates. To go below 2% flat rate and make a profit is near impossible. The only place you'll find that is somewhere like PayPal, with $100k/mo or more in volume and a negotiated contract, and they can get away with 1.9% because many of their payments are balance-funded or ACH-funded at nearly no cost.
2.2-2.5% is much more realistic and you'll still need a minimum monthly volume to get it.
Or we can all set up retail stores and abandon this e-commerce stuff. Rates are much lower when you can swipe a physical card. The real profit-taking is happening in those card readers you can pick up at Staples/BestBuy/etc from Square/PayPal/Intuit/GoCardless where they're collecting 2.7-2.9% and paying half that in interchange.
A large chunk of the costs associated with taking payments is fraud. (see founders at work - Paypal) So assuming you don't have a lot of fraud is wishful thinking at best.
 - http://jesse.la/lessons-from-founders-at-work-stories-of-sta...
(blahblahblah, usd, ponzie scheme, cbx halting transfers, grandmothers)
Any stripe devs know if it's possible to integrate with infusionsoft.com? That integration would make me so, so happy.
Basically something equivalent to Square with a Stripe-like API and lower rates for swiped transactions.
It's actually more of a "PayMill" model than a Stripe model. So they allow you to begin development but they don't actually promise immediate on-boarding.
(Props to the development team! You still need better docs though. :( )
Either way, props to em.
Most eCommerce sites have a profit margin of less then 10%, often around 5%. Charging 2.85% + $0.30 kills most business ideas.
This is awful copywriting. There's not even an asterisk with more information or anything.
When you call, they will ask you two important things:
1. What is your current volume (if you're looking at switching from someone else)
2. What is your chargeback rate? (How often do angry customers call the credit card company to issue a chargeback against you?)
If you are growing and have increasing transaction volume, and you aren't defrauding your customers, then you can absolutely get a lower rate than you're paying now.
This is true for so many things in business - the list price means nothing!