Stripe. The default go-to payment provider for your SaaS MVP

Sometimes, founders have doubts about the payment provider for their product. I'd like to explain you why Stripe is the best option to collect payments in your SaaS MVP. And the best for the MVP doesn't mean that it's going to be the best for the product 2 years later.

Let's start with numbers. I love posting polls for Founders and here's one of them:

So 81% of SaaS product owners who voted had Stripe as an option and for 75% Stripe was the only option.

Let's see why it is so popular.

A few words about Stripe

Stripe is a worldwide payment service provider used to make and receive payments online. This system provides successful financial transactions for Internet businesses of any size.

There are two main types of Stripe payment processing fees:

• pay-as-you-go, which is 2.9% + $0.30 (for non-European cards)
• or 1.4% + $0.30 cents (for European cards) for successful debit of funds from the card, and an individual package designed purposely for your business.?

Why Stripe?

If you're a developer dealing with payment integrations, then you already know the answer. It is the most convenient system that has everything done right - APIs, documentation, different solutions from recurring payments to marketplace options available without any major hustle.

Paypal and some other payment solutions have too much legacy code that makes working with them a nightmare if you need something a bit more complex than just charging the user's account.

I remember spending several days together with Paypal support and one of our clients back in the days figuring out how to implement the required functionality. Paypal had 3 different non-compatible APIs and I really felt we were creating a Frankenstein?Monster with those.

I mean, here's the Paypal API Docs menu:

Why so many different options?

Well, because they started with something like SOAP back in the days, then moved to REST and finally introduced Braintree and decided to build a GraphQL for it. Awesome, but navigating through all of that is a pain. Additionally I personally ran into issues when something was only supported in one type of the API but not another. So if you've chosen the wrong one and then face some feature that is not supported.. well, you would have to build an ugly workaround or rebuild the rest of the system.

Stipe has simple and full documentation that covers any possible scenario

On the other hand, there are some modern nice-looking Payment solutions that have clear API docs but they are usually way behind Stripe in the number of provided functions and solutions.

So what are the advantages of Stripe. Let's see:

1. Merchant Account;
2. Payment Gateway;
3. All Main Cards Support;
4. AliPay;
5. Availability in 44 Countries;
6. Support For 135+ Currencies;
7. Subscription Management;
8. Automated Recurring Billing;
9. Subscription Analytics;
10. Billing Scenarios (Flat, Tiered Volume, User-based, Flat + Overage);
11. Dunning;
12. 638 App Integrations, etc.

Not a bad set, isn't it?

Stripe infrastructure

Stripe has it all, but here are the main pieces:

1. Accepting Payments - your customers can choose their preferred payment methods, which allows you to reach a wider audience. Stripe accepts international payments from all major debit and credit cards, and also allows you to make payments using digital wallets. In addition, buyers can use bank redirects and direct debiting of funds for subscriptions or periodic payments. Those who prefer the "buy now, pay later" option can also use Stripe. Moreover, its mobile SDKs allows you to accept payments both from your app or mobile website;
2. Financial Reporting - Stripe provides information about transfers, refunds and fees in real time so that you can quickly get an idea of what is going on with your accounting. Stripe Sigma analyzes your data and allows you to instantly create financial reports using built-in functions or a customized API;
3. Setting Up Subscriptions -? Stripe payment gateway allows you to set up subscriptions. It is possible to set the subscription price in a matter of minutes using Stripe dashboard;
4. Stripe Atlas - this tool helps entrepreneurs launch a startup in the USA from anywhere in the world. Using Stripe Atlas, you can quickly and safely register a C corporation in Delaware and open a bank account for business in the USA. Stripe makes it easier for founders to obtain an employer identification number in the United States and fill out all necessary legal documentation;
5. Stripe Connect - this feature simplifies the payment process for any marketplace or platform. Compliance with payment requirements is Stripe's responsibility, while users can control the movement of funds, facilitate payments and easily manage platforms. Moreover, Connect offers a wide range of tools for any business model.

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What Are The Stripe Flaws And How To Deal With Them?

I bet you already understand why Stripe is considered to be a go-to-option, don't you? Unfortunately, despite all the charms, each service has its own cons. In my opinion there are two main obstacles:?

1. Stripe Requires A Developer. As I have mentioned above, configuring Stripe involves some API keys manipulation. So to set it up, you have to be either a developer or someone with a technical background here. But as an alternative, you can use ready-made solutions created by Stripe partners and start working with the system without coding or hire professionals;
2. Stripe Has Geo Limitations. Although Stripe processes payments from anywhere in the world, currently businesses from only 44 countries can use it. In addition, some of its features may not be available in certain regions. However, you can use Stripe Atlas to register an American company no matter where you are.
3. Stripe Demands (Lot’s Of?) Fees. Last but not least, even though Stripe payment process requires 2.9% + $0.30 fee - that fully correspond to the market price (sometimes even lower than competitors, e.g. Paypal) - it is also necessary to pay attention to additional costs. For instance:

• there is an additional 1% fee for international and currency conversion transactions;?
• in-person transactions cost 2.7% plus 5 cents per transaction with the same added 1% for any currency conversion or international card use;?
• Stripe also offers an automatic tax collection on all transactions for 0.5% of each transaction as well as easy-to-use tax reporting for each filing market;
• instant Payouts cost an additional 1% of the payout amount with a minimum fee of 50 cents per transaction;
• Stripe also charges a RADAR fee of 0.05￠ for every transaction attempted (even if the payment fails), etc.

Therefore, when you start to sum up, the final amount may be unexpectedly higher than you have originally planned. That is why it is highly recommended to calculate all costs in advance, before implementing any payment service.

Conclusion

I will probably repeat myself, but just remember - Stripe is your go-to solution for your SaaS MVP. It might be too expensive, but unless you have thousands of users already, you wouldn't really feel it.