Great write-up - I hadn't seen that graphic before but it's great - full credit to the original source http://startingandsustaining.com/.
As a Stripe-r, I can't complain about the OP's conclusion in any way :) As stated they are based in Denmark, and Stripe is not currently available for Danish businesses - that's on us to fix, and we're certainly working on it.
However, re: the title "How to choose a payment provider for your Europe-based SaaS startup" - the situation in Denmark is not representative of Europe as a whole.
Stripe has now launched here in the UK[1], and we now have betas available in Ireland, France, the Netherlands and Belgium - with the latest released in the past few weeks. So if you're based on one of those countries, please do give us a look. And if you're based elsewhere, well - I guess we need to keep up the pace and hurry to your country ;)
[1] https://stripe.com/blog/introducing-stripe-uk
As other commenters have mentioned, it's really easy to make mistakes comparing complex pricing across different providers. With Stripe and PAYMILL, the fees quoted are all you pay. With Braintree's interchange+ pricing, they actually state themselves that "Total costs are typically 1.8% to 2.6% of the transaction. There is a minimum cost of €100 per month"[2]
And that means it can't be as low as 1.8% of your transaction unless you're consistently taking in the region of €5,500+ per month -- low revenues for an established business, but not a trivial amount for a bootstrapped start-up looking for a payment service to launch with.
I've wondered whether this is a deliberate business decision by Braintree to discourage applications from brand new (and I assume on average more risky) start-ups. Then again, established businesses with serious revenues would presumably be considering a more traditional set-up where they can negotiate much lower rates with heavyweight payment services, and would perhaps care less about the hassle of setting those things up compared to the ease-of-use for developers of modern payment services. I'm not sure which part of the market Braintree are really trying to own at the moment: they do seem to have a USP among the "developer-friendly services" in the number of different payment methods they support through a common API, but this doesn't even seem to merit a mention on the front page of their site.
(I bootstrapped my last startup and 100 euros is roughly what I was paying SEOMoz, my accountant, etc. on a monthly basis)
It's way more important to just get something working and out-the-door and grow the number of customers then to spend a lot of time over what comes down to a relative small amount of money, you can always re-negotiate the fees when you grow and the absolute amount becomes meaningful.
PayPal: Awful, API changes regularly without warning (including changing parameter names for no apparent reason)
SagePay: Truly awful, datacentre seems to catch fire regularly
WorldPay: Awful, but not as bad as SagePay
Barclays ePDQ: You have to fill out an Excel spreadsheet to get a developer account
GoCardless: Great API, more or less limited to UK customers
Paymill: Good
Stripe: Very good
Braintree: Very complicated but not bad
And if you're downvoting me for this, feel free to ask for reasons why for specific providers. I have genuinely used all of them for at least one project.
I'm not sure what you're doing with paypal, but there haven't been any API changes that have affected us in the 7 years we've been using them. In fact I just looked at our paypal code, and it hasn't really changed at all since 2007.
We implemented one of the APIs (can't remember the name, it was something stupid at least) recently, and half way through our implementation the parameters we received back changed name for no apparent reason, and the PayPal sandbox was entirely changed; this resulted in our account becoming broken, constant errors where code was previously working, and it was never resolved.
WorldPay is incredibly outdated, underfeatured, and rarely improved. Their support is pretty decent, however.
With Stripe and Paymill now available, I don't see any reason why people should continue to use what we've been struggling by on for the past few years. They're so much better that I can't even really draw a comparison.
The main reasons why we chose them are:
a) None of the shiny new providers (we tried Braintree and Paymill) would accept us as we are a travel booking service.
b) Their rates were better than anyone else we looked at.
If you are taking a large volume of payments you may want to consider switching to them. However for a small startup probably not, as we have to pay a fairly large monthly fee on top of transaction fees (but overall it works out cheaper).
EDIT: Also regarding currency conversion costs we accept payments in USD, EUR and GBP and have bank accounts in all three.
But this is a huge deal breaker. Conversions for external payments forms are lower, particularly with PayPal which has poor UX and is PayPal-branded.
Edit: The Braintree FAQ[1] appears to agree with this. It also says they have €15 as their chargeback fee, not €11 as shown in the table in the article.
The implementation was easy. And on the rare occasions we needed support, they were very quick to respond.
I didn't do a price review recently, but at that time they were the most interesting for us to start.
Does anyone have experience with chargeback fees? PayPal doesn't have chargeback fees and I'm a bit worried that chargeback fees might have unexpected consequences. Many of my transactions are 6€ or 12€. When does a chargeback fee trigger exactly and how likely is it if you have a customer base of a few thousand?
There is one big downside though - you can only charge in USD, GBP and EUR. We sell to other countries who like their pricing in local currency, and this is a major issue for us.
Obviously when your product is growing you don't have time to just rewrite the payment processing and migrate all data to a different provider.
I guess this is where something like "Spreedly" comes in. It is an additional abstraction that allows you to switch payment providers easily. At least so I read. Does anyone have experiences with that?
Beside this though we found 2 main problems along the path:
1) Setting up a merchant account for multi currency (we charge in USD and get paid in EUR) is a nightmare and it takes a lot of time (in the end it took more than 3 months!). Things get much more complicated and costs can rise quickly. Also, you have to register with American Express separately and you have to do it for 2 separate accounts (one for euros and one for dollars). So you end up with lots of different accounts (one for Spreedly, one for the payment gateway, one for the Visa+Mastercard merchant account, one for American Express) and this makes things much more complicated to manage.
2) Spreedly decided in the last months to focus just on the Spreedly Core (vaulting the credit card data in a secure place) and sold the subscription part to Pin Payments http://blog.spreedly.com/2013/07/15/pin-payments-purchases-s... So this means that the developing of new features was dropped and their minimal control panel stayed the same over the last couple of years. Not sure if this is going to change in the future with Pin Payments, but it's always a big question mark for the future. Support and maintenance is still covered, but I wouldn't expect any new stuff for the future...
So I guess that in the end if I were in your place I would stick with Braintree or Paymill, and we would probably have chosen Braintree if at that time they would have offered the payment gateway and merchant account as well (they started only since last year I think).
I'm looking forward to see Stripe coming in Europe and hopefully cover all the states very soon.
There are so many ways to mitigate this decision later on. I know at least two companies who changed their payment processor in the course of their lifetime.
Posted a chart in the comments at the blog.
But then, one day when I came back to their website, I saw that they had added a minimum fee of €100 to their plan, and that unfortunately tipped the scale for us, as we pay everything on our own, and we have zero revenue coming in.
So the problem is for the first few months during which you pay everything out of your own pocket. It probably all depends on how confident you are that you'll get revenue.
How simple/hard is it to migrate from system to another?
I would like to add one - IMHO important - point to PayMill: They do not support credit cards from the USA.
source: https://www.paymill.com/en-gb/pricing/ (click on "fees for card types and countries" - the US is not mentioned in that list)
best
Kilian (MD PAYMILL)
