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SaaS Payments: To Stripe or Not to Stripe

Software as a Service providers (SaaS) have many options when it comes to addressing payment-processing needs. Stripe is a fairly new player in the payments space, but one that has quickly established itself as a  preferred platform for developers.

So, is Stripe the best long-term fit for your business?

To Stripe or Not to StripeWhat Stripe has been able to accomplish in a fairly short period of time is hugely impressive. By looking at the existing landscape and asking: “How can we make the payments process easy for developers?” the company has crafted a solution that works well and is very easy to deploy.

Stripe’s simple-to-implement, elegant API is attractive to developers. In fact, it’s that focus on the developer that has enabled Stripe’s massive adoption.

Setting itself apart

Stripe’s pricing is very much in line with other payment aggregators like PayPal, and the company makes very reasonable efforts to pay out quickly. But simply being as good as (or better than) the competition in pricing and service isn’t the main advantage to using Stripe.

Instead, it’s the ability to quickly and simply implement the platform that sets Stripe apart from its competition.

Let’s take a closer look at the scenarios that make Stripe a good fit, as well as some reasons that it may not be the best fit for your business.

Stripe is a great fit when:

  • Payments are secondary to development - If you are creating a shopping cart and want a secure, straightforward solution that also meets compliance concerns, Stripe is a great option.
  • You have serious time constraints - No one does it better when it comes to fast implementation.
  • You are selling one-time purchases - Although recurring payments are possible in Stripe, it is not a recurring billing manager platform (such as Chargify, for example).
  • You don’t mind payment aggregation - Because Stripe “owns” the merchant account, it also handles any funding issues and addresses any support needs, thereby contractually limiting your options.
  • Ease of payment set up is paramount - You can be up and running with Stripe very quickly. If your application requires frictionless onboarding, Stripe is hard to beat.

You may want to rethink using Stripe if:

  • You are processing any recurring payments. Why?
    • Credit card declines are a major issue — averaging 15% for recurring/subscription billers. At such a high rate, a comprehensive solution for mitigating declines is a must.
    • As a payments partner, you are giving up a potential revenue stream. Every transaction processed can create income for your business.
  • You have a strong relationship with your user base. Handing off your users to a company that you have no influence over can create issues for you when payment related support concerns arise. They’ll look to you to resolve those concerns, when in fact you may have little control over possible solutions.
  • There may be a need to migrate payment data in or out of your application. Exporting/importing full credit card data can be an arduous process that is confusing for your base. Typically guidance is needed.
  • ACH processing is an important payment option. Although Stripe does now support ACH payments, you will likely pay significantly more for this option. In addition, ACH payments are handled differently than credit cards. The nuances are better addressed by a platform that was built to process ACH transactions from the ground up.

Stripe is an excellent option for developers, but it’s not always the best fit for your SaaS application.

To learn more about payment partnerships and how they can be a catalyst for growth visit:

SaaS Double, Payment Gateway Integration

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Gene Krause

Gene has been consulting businesses of all sizes for 18 years and providing them with strategic payments and gateway integrations.

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