(Stripe cofounder.)
Hi folks -- as Edwin points out elsewhere in the thread, the article title isn't accurate. (I'll update or delete my comment if it's fixed.)
[Update: it was changed. It used to read "Stripe is now charging 0.5% more for recurring charges."]
You can happily make recurring charges yourself and no additional fees are incurred. Lots of Stripe customers do this and we don't charge anything extra for it.
If you decide to use Stripe Billing, which is a separate product, we charge for that. Stripe Billing's pricing hasn't changed in a few years. What's changing is that we're ending the several-year grace period where we didn't charge anything for Stripe Billing for businesses who started to use this functionality before 2018.
Charging for Billing helps us fund a lot more investment in it -- we've gone from very basic cron-like functionality to a pretty full-featured subscriptions management tool. (You can read more at https://stripe.com/billing.) Billing is now sophisticated enough that companies like Slack and Atlassian are using and paying for it. We've built things like "Smart Dunning" (which improves revenue recovery for failed charges by about 14%), better analytics, international payment method and invoicing support, and a whole host of other features. There are now more than 30 people working on improving Billing.
Importantly, Stripe Billing is (and will remain) significantly cheaper than most of the other competitors in the space.
I feel that spinning this as a several-year grace period is a bit disingenuous. I'm a huge Stripe fan, but this is leaving a bad taste in my mouth. Here's the exact notification that went out on April 6, 2018 in the dashboard:
"As a user of Stripe Subscriptions, you will get all the functionality of Stripe Billing's starter plan with no change in price. You can continue using it free of charge on your existing Stripe pricing, even beyond the $1M free threshold. This will be automatically applied to your account. Contact support@stripe.come with any pricing questions"
As far as I can see, the Billing Starter plan has not changed and still applies. Not only that, it claims we get "all the functionality of Stripe Billing.." when this hasn't been the case for a few months. New features have been gated recently, ie. the new customer portal.
You have every right to change your pricing how you see fit. However, if this message was worded as it being a grace period, we would have taken steps two years ago to consider other tools or building something in-house.
You're right. It would have been a lot better if we'd made explicit that we weren't intending to make a permanent commitment. This is good feedback for the next time we do something like this.
(Our actual thinking was that we'd iterate on the product for a few years until we were confident it was good and worth paying for -- with both large and small companies using and paying for it -- and then revisit.)
> You're right. It would have been a lot better if we'd made explicit that we weren't intending to make a permanent commitment.
And the original message, when I read it for the first time today, implies that it is for life because it's "beyond $1M" and there's no qualifier.
I'm not using Subscriptions so I have nothing invested. But that's what your message says.
You're welcome; appreciate the response. For what its worth, I have yet to get an email about the increase and HN is the first I've heard of it.
I should have known something was up when Stripe sent out the email survey two days ago about subscription pricing. Very strange that you only sat on those results for a day before pulling the trigger on this. Interestingly, some of the survey answers included concepts of a free tier.
To me, the percentage makes little sense. You could be running 1,000,000 $10/mo subs, or 1,000 $1,000/mo subs and the cost is the same. This pricing model hits high value subscription companies significantly harder, even though Stripe's costs are lower.
> To me, the percentage makes little sense. You could be running 1,000,000 $10/mo subs, or 1,000 $1,000/mo subs and the cost is the same. This pricing model hits high value subscription companies significantly harder, even though Stripe's costs are lower.
While this is true on some level, the challenge is that we'd have to set pricing at an inefficient point (i.e. we'd end up charging more than some businesses can afford to pay and less than others are willing to pay). If we charged $1/sub/mo (say), $5/mo subscriptions would be prohibitively expensive. At the other extreme, if we charged $0.02/sub/mo per month, it just wouldn't make sense to invest as much in improving the product, which would indirectly hurt businesses by depriving them of a counterfactual product that they'd like to be able to buy. Pricing is obviously always an exercise in trying to find a reasonable trade-off between simplicity / optimality and this is our best effort.
You're right; regardless of which model you pick, one side is going to be affected more. I'm sure you ran the math on it and saw Stripe customers skewed closer to the $10/mo sub than the $1,000/mo sub.
In the survey, there were a lot of options for dual pricing models. It must have been something you were considering. I'd be curious to hear why this was decided against?
To be honest, none of the new Billing features are relevant to us. We'd much rather have new features gated, like customer portal is, than paying 0.5% for features we never intend to use.
> In the survey, there were a lot of options for dual pricing models. It must have been something you were considering. I'd be curious to hear why this was decided against?
I'm actually not sure. I'll check with the team. (The timing of the survey was coincidental, though -- we've been working on making our Billing pricing consistent since the start of the year.)
> To be honest, none of the new Billing features are relevant to us. We'd much rather have new features gated, like customer portal is, than paying 0.5% for features we never intend to use.
We seriously considered that. It gets pretty complicated (and error prone), though, with the number of different code paths that have to be maintained. The fact that such a large fraction of customers we reached out to directly were willing to pay for a more full-featured Billing (mostly on the basis of competitors being significantly more expensive) made us eventually conclude that it wasn't worth the complexity of having two adjacent versions of the product.
> It gets pretty complicated (and error prone), though, with the number of different code paths that have to be maintained.
This seems a little unlikely. Unless the billing side of things was too complex? :)
Are the code paths really that complicated? If you want it extra simple, code path wise, then on accounts where it's not enabled you could hide the menu/API options for the new stuff and monitor your logs for anything sneaking through. Your actual payment processing backend doesn't even need to know there's a difference in feature set between these customers!
I may be out of date but thought the 2.9% price was already a premium price vs getting a merchant account/gateway and the Stripe API was the value for which you paid the premium. In which case I’d expect the product features to grow over time without increased pricing. Acting like new revenue is required to grow feature set is a half baked excuse when simple explanation that they intend to further monetize existing features seems more truthful.
I have PayPal subscriptions billing, it's 2.9% + $0.30/txn - this might be slightly less than Stripe now?
Considering the Durbin Amendment capped debit card processing at 0.05% and $0.21 per transaction, and interchange pricing for credit cards ranges from 0.65% to 2.4% plus a few cents for the auth fee, it is pure profiteering that PayPal and Stripe charge this much to process cards.
https://en.wikipedia.org/wiki/Durbin_amendment
https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-in...
Good information - thanks for the reply.
> To be honest, none of the new Billing features are relevant to us.
Bingo. This is like your cell phone company telling you that the tethering feature you have always had access to is now part of their Pro plan, for which you won't be charged extra. Then they turn around and start charging for the Pro plan on the grounds that it has a bunch of features you don't care about — and one feature that was previously available outside the Pro plan.
Unless I'm misunderstanding what's happening here, this seems really lousy. I became a Stripe customer because of the simplicity and transparency. It seems that both of those benefits are disappearing.
Would you be willing to consider capping the per-subscription cost? For instance, "0.5% of your subscription price, at most $x/month/subscription"? That would keep it reasonable for low-cost subscriptions, and have high-cost subscriptions pay more, but the cap would make it feel much more reasonable to use Stripe Billing even for very large subscription costs.
With a structure like that, I'd want to use Stripe Billing for every customer, rather than considering any kind of special arrangements for high-value customers.
I’m more inclined to say that you’re deliberately going back on your words.
Once you tell someone they can continue using it as is forever, you cannot later say ‘actually, we meant just a few years’.
If current Stripe customers wish to switch to another processor like Vantiv, First Data, Chase Paymentech, etc will Stripe enable data migration from your ISO to another ISO?
I did this when moving from a First Data ISO to Vantiv to ensure we could avoid collecting card data from clients again.
When I first signed up with Stripe years ago, it was a breath of fresh air. Stripe did one thing exceedingly well, at an understandable price and took minutes to integrate with.
I could sell Stripe to my developer friends (and did, a lot!) in a single sentence: "You can add credit card charging to your site in about 15 minutes for 2.9% + 30¢ per transaction." I can't do that anymore. Stripe is no longer a single-sentence sell.
Stripe still does good work. But the air is getting murkier. I'll point to some objective changes, but mostly Stripe is just starting to feel different.
- Several years ago, when I saw announcements that Stripe started supporting ACH payments (and later international payments), I thought, "Great! This is Stripe! I'll just be able to flick a switch and turn those on." Not so. I understand that it's complicated from their end. It's just not the same "Stripe is so easy" experience. "Stripe is supposed to abstract away the complexity, not expose it to me."
- The pricing page is a big sign of the added complexity. There used to just be one or two numbers on that page [1]. Compare that with the current pricing page [2]
My suggestion to you, pc: Start a little company within Stripe to disrupt Stripe (i.e. re-simplify) in the same way Stripe disrupted the industry 10 years ago. Or keep getting bigger and become just as complex as the things Stripe replaced.
[1] https://web.archive.org/web/20111216054911/https://stripe.co...
[2] https://stripe.com/pricing#pricing-details
I agree. I feel like good companies like Stripe want to keep growing. With this, comes the need to increase revenue to cover the extra costs. I don't know if it's investor pressure, or the fear of being stagnant, but some companies are arguably better off the way they are. There's no need to grow at all costs.
If you want more users, double down on marketing to existing users instead of pissing them off. Although it's really hard to measure, happy users do the marketing for you and bring in more customers.
First they started charging for international cards (with the "grandfathering" for years excuse), now this. I've already migrated off of Stripe and now actively recommend people think twice about going with them. Instead, I'm recommending Braintree... aka Paypal. It seems we've come full circle already.
Charging one rate for all payments sounds nice. But not all payments cost the same for Stripe. One rate for all customers means that you are breaking even / losing money on some transactions and making money on others. In other words, you're asking some of your customers to subsidize others, because.... it makes the product simpler to sell. Why would anyone agree to the wrong side of that bargain as a customer?
Because it makes the product easier to buy? In the past I could buy stripe and know exactly what my costs were going to be. Looking at the pricing page now it’s a fucking swamp.
If I add all their percentages up I’m paying 10% per transaction.
Even more confusing, it's showing me (in NZ) prices in GBP, which I have no use for, and talking about European cards as somehow special. They seem to think currency and language are the same thing (NZ English is pretty close to British English for computer purposes, so it redirects me to en-gb?). But https://stripe.com/en-nz/pricing#pricing-details actually exists! Weird.
This is an excellent Suggestion: My suggestion to you, pc: Start a little company within Stripe to disrupt Stripe (i.e. re-simplify) in the same way Stripe disrupted the industry 10 years ago. Or keep getting bigger and become just as complex as the things Stripe replaced.
[1] https://web.archive.org/web/20111216054911/https://stripe.co...
[2] https://stripe.com/pricing#pricing-details
reply
would second this VERY strongly
Kind of agree with cabolos here. When we signed up for Stripe, the fees included access to Strip Subscriptions. We chose Stripe in part because of that. Now we either have to pay more for the same functionality or migrate of.
We'd be totally happy keeping the old functionality of Stripe subscriptions and not getting any of the new hotness. I think Stripe has done a great job supporting old versions of the API, seems like we should just be able to stay on our old pricing / subscriptions functionality as well.
Saying that we can build the infra ourselves to do reoccurring kind of goes against what we purchased Stripe for initially. I know technically you can change your pricing/billing however you want but this is more of "let's capture more revenue from old customers" than it is "we launched a bunch of stuff thats new so pay for the new stuff".
We've been testing this change for a few months to make sure that, broadly speaking, the vast majority of current customers are willing to pay for the new functionality. We don't want to even try to charge for things that customers don't feel they're getting good value from.
There's obviously heterogeneity, though, and we'll be as reasonable as possible. If this would be really disruptive for your business, or if you need more time to plan a migration (if you don't think Billing makes sense for you), or something like that, I'd be happy to connect you with the team -- we could extend your current pricing through the end of 2021.
Extending the pricing through 2021 seems reasonable and would give us a chance to do the cost/benefit on upgrading to Stripe Billing (including integration work) or moving off. Thanks for giving us the time to make the right decision for our business.
There have been comments elsewhere in the discussion that for folks with higher volume, we should be negotiating our fees. At what volume would you recommend companies reach out to your team to do so?
Great -- if you reach out to support@stripe.com with "billing pricing extension" in the subject, it'll go to the right folks.
Does this billing price extension only apply to people who read HN, or will there be a newsletter informing all your customers of this new policy?
Yes, we encourage customers to reach out to us, and this policy has (before today) already been applied to them as well.
I emailed with "billing pricing extension" after I saw this but only offered 1 month extension. Was also told HN is not a legitimate source...
I emailed before I saw this and got an offer of 3 months.
So maybe but not as good of one?
I'm in the same boat, is this offer open to anyone?
Yep. See https://news.ycombinator.com/item?id=25076068 for how to get in touch.
> We don't want to even try to charge for things that customers don't feel they're getting good value from.
Then presumably you'll follow alooPotato's suggestion and allow folks to not pay extra for stuff we never wanted and never signed up for?
Presumably you can see how many of your customers (myself included) have never even looked at some of these new features you've added to Billing. I'm literally finding out about these features in this thread. If people were not aware of these features, you can figure they are not interested in paying extra for them.
This feels like New Coke.
Patrick,
I think Stripe does a lot of things right, but your comments back in 2018 certainly indicated that Billing could be used in perpetuity:
"- For existing customers, there's no pricing change. You just get more functionality than before for free. This is what we generally try to do: we want Stripe to continually become better value for you over time, as you get more functionality for the same price."
https://news.ycombinator.com/item?id=16766846
I specifically reached out to Stripe support back then to verify this would be the case and they confirmed. If you've since changed your mind, I think you should come out and say that's the case as opposed to saying this is a communications issue.
Long term Stripe customer across multiple companies here.
I'm ok with paying for services like this that provide loads of value. I expect there's increasing diversity in terms of Stripe's customer base and how they use the product, and trying to pick a single percentage price point that works across all of them is no longer feasible.
That said, I'm quite unhappy with Stripe's pricing as an AU customer. We're paying exorbitant rates to convert USD to AUD (think retail bank rates despite transacting multiple millions a year, ~3x what we'd pay Transferwise). There's no option to settle in USD, and a lot of our expenses are in USD, so we then pay another currency conversion fee when we spend.
It's problematic to the extent that we're considering whether the ongoing costs and hassle of setting up a US entity, dealing with international tax, compliance, parent companies etc. would be worthwhile.
Yep, heard loud and clear. We've been investing a lot in USD (and other currency settlement) in various markets (and actually just released it in Singapore). We're working on it in Australia too.
Thanks for replying, I'm very excited to hear it's in the works!
won’t this eat into your revenue since you won’t make money on the exchange ?
People like GP who's revenue is eaten into by it not existing switching away from Stripe would also eat into its revenue.
Do you really need to set up a US entity just to open a US bank account?
If not, I would set up a US checking account and settle some portion stripe transactions there. Take that revenue and pay your US vendors. No currency conversions.
You can have a USD bank account, but Stripe won't pay out to it, they'll only pay out to an AUD account and take the 2% along the way.
This is infuriating. I've been told so many times that it's 'coming'. 5% of top line revenue is pretty significant and now an added 0.5% feels like a slap in the face.
Braintree have offered it for years so this might be the final motivation to switch over.
It's been around 7 or 8 years with Stripe now and it just seems like they are prioritising heavily increasing their average revenue per user at all costs.
use pin payments they can take and settle in USD just ask them and they are an AU company. similar fee structure as stripe 2.x + 30c
They also have way more business model exclusions and more onerous terms than Stripe.
We process a significant amount of charges through Stripe and this is hitting us hard. We’re basically being told that you’d like to keep some of our money for yourself. We were never told that we should expect such a fee increase. This smells a lot like bait and switch.
I'm sorry that it feels that way. Stripe Billing's pricing has been public since 2018. (We didn't charge any of our existing users from the outset precisely because we wanted to avoid any sense that there's a bait-and-switch. We wanted to wait until we really were confident that we had a good product that businesses are willing to pay for.)
Unfortunately no, It was never communicated to us. we were told stripe billing would be free to use. The very least that Stripe needs to do is to grandfather the existing revenue for old customers, and put in the charge for only newly created subscriptions.
Strongly agreed.
Those are reference customers and should be treated with much greater privilege. They are early adopters and could very easily become early the next group of vocal detractors. I can't help but wonder about the poor client advocate Stripe fired before they made this move.
I'm sorry that it feels that way. Stripe Billing's pricing has been public since 2018.
But lots of us have been using Stripe for a lot longer than that, and don't necessarily want or need all the extra things you're now putting under the "Billing" brand.
We haven't received any notification of a change from Stripe, but from the HN discussion, it looks like the option to just have a simple, automated recurring charge -- the key feature that attracted businesses like mine to Stripe in the first place -- is being removed. If that is the case then we'll naturally view the change as a 0.5% increase in Stripe's fees, pure and simple.
We use recurly.com for subscription management and have been very pleased with them for years.
FWIW, we're in the UK, where a combination of the European PSD2/SCA changes, ever more complicated tax rules, and uncertainty over Brexit is making the model used by services like Stripe unattractive now. We've been looking into merchant-of-record alternatives, where it can be someone else's problem to keep up with all the tax and regulatory changes and to implement all the awkward UI edge cases. We haven't yet made a final decision on how to proceed, but apparently the difference in fees relative to the existing services we use is going to be smaller in the new year, so that's one barrier to switching getting lower.
Second that! We are exactly in the same shoes. We are not using or planning to use any of those extra features and are pretty disappointed by that move. Costs us a couple of grand more every year in stripe fees or we now have to go hire a developer.
This was what was sent to us:
Your account has been upgraded to Stripe Billing for free. No matter how much revenue you process on Stripe, you’ll get unlimited use of Billing’s Starter plan included in the price you currently pay for payments. All new features are available in your account now, no API version upgrade necessary.
If Stripe pushed ahead forcing an additional 0.5% with no new features adopted, that's pretty predatory and the kind of rent seeking that will leave a bad taste in a lot of people's mouth which then when starting new projects won't be looking to adopt Stripe with the same passion they did years ago.
We were told we were grandfathered in, actually. We specifically asked before we started our migration process to Stripe Billing.
I created an account and integrated Subscriptions in 2018. At no point was I told that I would later be charged extra for doing so. On the contrary, I was later told that my account was "upgraded" to Billing for free.
> I'm sorry that it feels that way.
It's not just that it feels this way. It is this way. I'm still on the Subscriptions API and haven't seen anything in Billing compelling enough to rewrite my code to implement.
I'm not saying any other payment processor is better. They may not be. It's just that while I deeply respect some of your broader ethical stands, this kind of behavior is dismaying.
> I'm sorry that it feels that way.
I think it is that way, and this is an attempt to make it feel a different way.
hi Patrick,
For some reason your designers have decided that your website should pick a language based on the ip address.
Stop guessing a language :)
https://news.ycombinator.com/item?id=23216502
https://news.ycombinator.com/item?id=14175238
is the Subscription API (https://stripe.com/docs/api/subscriptions) part of Stripe Billing and thus subject to the additional fee?
yes, as we found out through the email. Even if you send invoices, they will also take a 0.5% of those!
AFAICT - Yes
[1] In Stripe's API, the subscriptions section is nested under "Billing"
[2] https://www.stripe.com/billing is all about handling subscriptions through Stripe
Can you clarify on the term "migrates" in the new title? If we use Stripe Subscriptions, do we need to migrate our system to the new Billing product?
No, you don't need to do any work.
You don’t need to do any work, but you just need to pay more ;)
You don't need to! The pricing doesn't kick in 'till next year. We want to give people time to migrate away or to implement a billing system manually. (And if anyone wants more time to do that, we're happy to grant it.)
This is just great! :)
Yes - we need more time. This is a bit of a surprise. How do we get an extension, and how long will this extension last?
Next year is just months away.
If I reach out to support, will they be able to chat w/ me about what's actually happening? I'm pretty confused atm, and don't want to drown this thread with questions about what's actually taking place.
Patrick, Thanks for building a great product. I'm happy to pay for continued feature + new product development ...
... What I'm not so happy about is: * we have asked Stripe to sign a contract for years (something requested by our institutional investors but have always been just pointed to an online MSA URL * we are now being asked to sign a contract suddenly w/new line-item charges and no ramp-up or notice period
Most companies (especially those that are PE backed) have already done year end planning + budgetting.
Happy to provide the details of our timeline but so far at a high-level: * contacted by a new account rep 11-days ago about signing a contract * still have not received the proposed rates for billing, processing, rev rec, sigma etc ... * ... but have been told that Billing charging needs to kick off 1/1/2021 (which is essentially 45-days away)
Thanks, JE
Thanks pc! OT: You're very active, and usually one of the first to get involved, in Stripe-related discussions on HN. I'm curious how you manage this. Do you lurk HN all day like me and spot the new Stripe-related threads, or do others at Stripe let you know when they see a Stripe-related thread?
I've always wondered if there is a business opportunity here: a company that monitors social media for all mentions of your business and pings you about it. Maybe this already exists?
I do think there are existing applications that provide this service (ex: Hootsuite[0]). I think a layman could probably setup Google Alerts[1] to achieve the desired results for topics they're interested in (like your company)
I'm curious how Patrick does it though as his attention isn't exactly cheap
[0](https://hootsuite.com/platform/monitor)
[1](https://www.google.ca/alerts)
There are tons of companies that do that, with varying levels of automation and responses.
https://f5bot.com/
Media monitoring companies have been around for some time. There are companies with people transcribing talkback radio and reporting to clients (including sentiment, etc) for companies and topics mentioned. Would be easier to automate in the age of social media too, so bound to be dozens of upstarts focusing on that.
Google Alerts?
Thanks! Mostly a slightly excessive affinity for HN. But sometimes people point me to stories too.
Interesting!
Cool!
btw there's a small bug on the storage part of the pricing plan calculation. It shows 5,525 GB units but then the calculation is for 10,100 units.
Thanks for the heads up! We just pushed a fix.
Patrick, i am trying to build a partnership with you guys and can't get anyone to contact me back. We are a venture backed startup in the veterinary telemedicine space - how do I get in contact with someone senior to explore an enterprise level partnership?
Thank you for taking the time to explain and write this up.
While you are here:
Any update on when Stripe will be available in South Africa ? We really need some alternatives to PayPal.