There was an article today in FastCompany about a cool company called Stripe. They’re a dead simple credit card processing gateway. In just a few minutes any web developer could sign up and add credit card processing to their site for a flat rate of 2.9% + $0.30 fee.
The thing is: you could already do that. PayPal already has this product. It’s called Web Site Payments Pro and the sign up process is easy. No merchant account required. It does cost $30/mo, but the rate is the same (or cheaper with volume) and their Name-Value Pair API is just about as simple.
Almost every popular language has a client library already, which means it’s really just as simple to get started.
Here’s some official clients on their site: https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=developer/library_download_sdks
curl https://api-3t.sandbox.paypal.com/nvp -d METHOD=DoDirectPayment &VERSION=XX.0 &USER=API_username &PWD=API_password &SIGNATURE=API_signature &AMT=400 &CREDITCARDTYPE=Visa &EXPDATE=022018 &...
curl https://api.stripe.com/v1/charges -u vtUQeOtUnYr7PGCLQ96Ul4zqpDUO4sOE: -d amount=400 -d currency=usd -d card=tok_x9vhXvDM3LuscU -d "description=Charge for firstname.lastname@example.org"
So what is Stripe doing that’s better?
1. They’re not PayPal.
2. Their product is focused and looks simpler. Stripe sounds better than Website Payments Pro.
3. Much better reporting.
4. Much better documentation.
5. Faster account activation. PayPal does let you get started with very minimal info, but they have bugged me one time for more as an anti-fraud measure. I predict Stripe will do that as well eventually.
At the end of the day though, what they created already existed and not in some complicated form. It was just a little obscured and required a little knowledge to find/use.
I thought PayPal sucked as a credit card gateway until I discovered the Website Payments Pro service and NVP API for it. Turns out it works quite well.
Which brings me back to the title of this post. This reminds me a lot of what Hipmunk did. They took an idea that was buried in the back of ITA and focused all of their effort on improving it and marketing it better than ITA ever did (which had its own reasons for not doing that).
Stripe is doing the same thing to PayPal and I don’t for one second want to claim that it’s a bad thing. I think it’s one of the best possible recipes for startup success: find some high quality, but under-polished/under-promoted, product that a big company is offering and polish, improve, and promote it.
I know I’ll be using Stripe the next time I need credit card processing. It’s definitely nicer than PayPal’s solution. It’s not so much better though that I’d be willing to pay significantly more to use it, so if PayPal saved me a lot more money at volume I’d certainly switch to them.