Uh, that 3% includes the amount they are passing on to the credit card company. Which, for a little guy like me, is around 3%. It is literally no more expensive to go with Stripe than to roll my own.
Exactly. I signed up with stripe maybe 5 years ago. At that time, I was trying to find a processor, and came close to signing with a bank. The bank wanted me to sign a long-term agreement, the agreement had disadvantageous and confusing terms with unclear costs, and it was more expensive than stripe at baseline. The sales process was really sleezy: I only discovered all those terms because I read the contract carefully before signing.
Before that I used two other processors, both of which had a confusing mix of monthly and per-transaction fees.
If you are a very, very large business, maybe you can do better than stripe. But if you are small or even medium size, I am skeptical there is a better deal out there.
Even a small business can easily do better than A (when it comes to fees). The only time stripe would be a good deal is if you are processing almost exclusively high end corporate cards like Amex or corporate purchasing cards.
Stripe and others like them is also the best rate if you are processing very small annual amounts. Because every merchant account has around $10 in monthly fees, minimum. If you are not paying a monthly fee, either your processor is paying it, assuming that they will make enough on the spread to make up for it, or they are running your processing under their own merchant account and taking on the risk. Which is likely what stripe does until an account is large enough to warrant moving it under its own merchant account.
Here is an example of a relatively expensive rate for processing with a merchant account (2% plus 10 cents per transaction, with a 10 monthly fee) versus Stripe. Note how the breakeven for getting a merchant account is when you start processing more than $428 a month(assuming an average transaction is $15).
Banks have 2nd tier offerings for credit and debit processing that don't focus on gaining customers with low rates. There are a handful of platforms, First Data, Tsys, Elavon, Worldpay/Mercury & Heartland, and everyone who sells merchant services is selling you access to one of those platforms.
Yes. Years back we moved from Elavon to Stripe since 2.9% on each transaction sure beat uncertain 1.9-5% we were getting based on what card customer was using (corporate and point cards carried bigger fee).
I was casually chatting with a small business owner about five years ago and he was raving about how much money moving to Stripe saved him, especially on AMEX cards.
Well I would assume Stripe gets a better deal than a little business would, and I would expect them to take some significant cut, otherwise they would not be a viable long-term provider, yes? I don't want to be exploited mercilessly, but I also don't want to rely on a payment processor that makes no profit, it seems like they would not stay around for the long term.
