The next big thing seems to be payment options, and to that end Canada looks to benefit from some really compelling options from start-ups looking to make a mark. One such company, Stripe, is billed as “Payments for Developers” – but that’s not the full story. Stripe now has some very compelling reasons why Canadian small businesses might be interested in this service.
To see how this process worked, I placed a test $10.00 charge on a credit card and followed the process from billing to payment. Almost immediately the credit card showed a charge of $10.00 CDN as a temporary charge.
Back on Stripe, the details were laid out very clearly as far as charges and fees. The $10.00 represented Total Volume, and $9.41 was left for transfer. This amounted to a $0.59 charge for processing. This amounts to a 2.9% charge plus $0.30 per transaction in Canadian funds. If you were to place a charge on a card of $1,000.00, Stripe should then keep $29.30 of that transaction and pay out $970.70. In contrast, Moneris takes upwards of $44.00 or more for a $1,000.00 transaction (depending on the rates you’ve been able to get from them).
Payments headed to your bank (or “Transfers”) are described as being made on a seven day cycle. Moneris in Canada usually pays out charges in 24 hours). Seven days isn’t a great time frame to be waiting for payment, but it may also be indicative of the funds having to travel from from across the border. seven days later, the payment was accepted by the bank.
Stripe also supports Visa, Mastercard and American Express at the same quoted rates.
Contrast this with Moneris fees of $5.00 to $20.00 per month flat plus 3% or more per transaction. In fact, one of the worst things about Moneris is the complicated fee structure (based on type of card charged, how the card is charged, etc). For a small business, I’ve felt Moneris needs to provide better access to information and mobile options beyond those that penalize you financially. Given the extremely high cost of credit card processing, this market is ripe for disruption from a company willing to treat small business fairly.
Based on a lower per-transaction cost and better card support, Stripe has some potential to be a viable card processing service for more than just developers. Small business should love the simple interface, mobile apps and the ability to charge a wider array of credit cards. If anyone uses Stripe in Canada, drop me a line, I’d love to hear about your experiences.
Update: Apparently Stripe is having difficulties transferring money into Canadian bank accounts in US currency. More details can be found here