Key scaling issue is pricing. 2.9% is fine for low volumes and no risk validation, but once you're turning over large volumes and have a track record of no chargebacks etc the comparison looks much worse. If you can offer businesses a pricing that 'scales' with substantial reductions in transaction fee by volume then there is a growth path, otherwise any business would be crazy to stick with you no matter how good your service and APIs, etc because 2.9% could be half their gross margin and they can get 1% by dealing with the bank direct.

I didn't mention 1% as idle guesswork, I have direct knowledge of several businesses paying close to 1% on online (card not present, no signature) transactions. I'm not saying its easy to negotiate good rates, but its possible, even for fairly early stage startups. I got 1.6% for a startup turning over only about $20k per month, no track record and 'non standard' business model.

So feel free to push your bank, get quotes from their competitors, they can almost certainly do better for you.

EDIT: I just notice that stripe is planning to introduce volume discounts - that would make a very nice product!

I do about that volume, mostly card present, and think I have decent rates. I think I'm at Interchange plus .2% plus 1 cent per transaction plus $20 per month, and end up around 2.7% for total fees. I'm sure one can do better, but not by a lot. I'm willing to bet a considerable sum that you are not actually paying 1.6 percent once it's all added up. But if somehow you are, the loss of the bet would pay back quickly if I could get those rates myself!

In general, we're a tech company and we're looking for technical solutions to problems. We're also just culturally familiar with startups that explode in popularity, so we aren't worried about that kind of behavior.

When word gets out that Stripe makes it "dead simple" to process credit cards without a merchant account, the vampires will come out to play. And I'm truly excited for a service like yours. We need this. But be prepared.

You can't use Stripe unless you have a bank account set up to receive funds, and you can't use Stripe to pay for things -- i.e., you can't launder fraudulent money by buying a ton of stuff online and having it shipped to an abandoned house.

In Stripe there's a very simple money trail, plus there's a week's delay before your charges are transferred into your account... which makes it tricky if you're hoping to run up lots of fraudulent charges then disappear with the cash before anyone notices. With PayPal the money trail could be very complicated indeed.

If you're not laundering money, then (all other things being the same), you should prefer Stripe over PayPal, since it would be quite hard for someone to use Stripe for this purpose, hence they will have fewer money-launderers to deal with, hence you have less risk that you'll set off some obscure alarm and they'll lock up your account for months.

In any case, if you sell anything (online or off) you may want to learn a bit about the various risks and liabilities. Fraud does happen, and some businesses are at far higher risk.

I'm not sure the average lawyer will help much, though. They can tell you "yup, if someone buys a diamond from you with a stolen credit card and you ship it, you will not get to keep that money even if the diamond isn't recovered" (but don't you know that already?).

The more important advice is technical, and it's about all of the things you can do to reduce the risk of that ever happening to you.

As ex paypal Im guessing you have invested a lot in risk management, ML and automation etc as its really technically difficult to make such a broken process like online payments this simple so you may have it all covered.

What we can bring to the table is a (300ms) https name value pair API that delivers aggregated intelligence in real-time based on transactions, identities, devices and behavior across 6000 sites that represent over 1MM individual CNP txns on a daily basis (only 1/5 of Paypals txns but hey we are a startup!) which you can ingest into your rules engine or risk models during, before or after the payments authorization/capture.

We dont just provide a score which can be impossible to integrate with other ML engines we also provide customizable (by you) reason codes/triggers that can be used to characterize behavior e.g. customer's computer associated with 3 difference identities and 4 different proxy ip addresses across global network in last hour....Data Geeks geek out on it as we also provide full attribute data back in the API response so provides a good way to do feature extractions for SVMs etc. We have been proven to reduce FP and increase TP.

We currently process peak 700 tps with about 20% degradation in performance at load. We suck at batch processing cause its just not our thing. I head up products and one of the founders so not selling just helping as I think you have a solid offering that should do very well.

Paypal bought Fraud Sciences for 170M but you can rent ThreatMetrix ;-)

(I have no idea whether you have a good product, but I'm hoping you do, because the problem you're trying to solve is an annoying one.)

    Q: Do I need to be in the United States to use Stripe?
    A: Yes.

Would you finally be the one to tell us what the hell is the problem with non-US customers?

Most of the fraud happens with accounts outside the US. New payment processors always start with the US and slowly expand outward.

Being able to deal with fraud is how PayPal made itself when everyone that came before it failed.

That's true, but too broad a brush. There's a difference between your average European country and China/Russia.

Yours is the most compelling one I've seen.

As you can see if you want to provide this service to a foreigner then you need to do checks on this person and his bank. This costs such much that most will decide that it is not cost effective to do so.

Well, why do their representatives insist it's a "top priority" then?

FastSpring, which is a US company, can actually work with non-US companies just fine. Why is that?

Also, at some point I asked them why they could, and BrainTree couldn't, and they said they can't really think of a reason why.

So.. What exactly is the deal? I'm dying to know.

Many of the card acceptance solutions that do not require this information are not actually issuing merchant accounts or are otherwise performing what is known as aggregration or is opening a merchant account on your behalf that they own. Some are also issuing merchant accounts in non-US banks. Others are in violation of US law.

I am curious that a social security number is all that is required...why is it such a pain to get a merchant account with a bank or other acquirer? I am curious how Stripe can make it so simple.

The second reason is that it's "standard", and everybody copies the "standard" without much consideration. The companies providing merchant accounts are usually not technology companies, and historically haven't had thought much about product.

We like to think that we can do much better than traditional companies on both counts.

I am curious as I am in fact an Australian citizen and know that a lot of people have a hard time here when trying to open a merchant account. From what I've read and heard it's traditionally a similar in the US and it is obviously one of the killer features of Stripe.

Was it hard for you to work with a bank (Wells Fargo) on this? From what I've heard banks are the main driver behind the 'shotgun' approach to information collection, at least here in Australia. I could well be wrong on this, hence I ask the question.

You are already doing a much better job than traditional companies on both accounts, it's great to watch and I'm sure you guys will continue to do great work.

Note: I just realised my spelling error in my previous post...iPhone autocorrect got the better of me!a

A lot of these services are not available outside the US. Last time I checked Google Checkout was limited to the US as well.

It is really annoying as I live in Canada and I cannot use many of these services.