With a merchant-friendly platform that could be set up in just a few days with no upfront costs, we can see how attractive Stripe Connect is to B2B software companies in need of a payments solution that won’t eat up a ton of time and resources to implement. Stripe or Braintree (managed payfac providers as we refer to them) are the initial choices for many software companies when they are first getting started. What you are likely now realizing is that while these managed PayFac providers were good partners when you first started your business, you’ve now outgrown them. And that’s OKAY. Chances are you’re ready for a solution that is designed with your business, your customers, and your bottom line in mind. Here are five signs you’re ready for a Stripe alternative:
#1 – You’re tired of talking about how expensive Stripe is
2.9% and $0.30 sounded great when you first started. It’s simple, it’s transparent, but as you’ve come to realize, it’s also expensive. If you’re looking at your P&L and starting to notice Stripe as a big line item, it’s time to consider moving on because the problem only gets worse as your business continues to grow.
The real question is, why isn’t your business generating revenue from all the payments flowing through your software system? Payments should be a revenue center for your business instead of a cost center. Check out this awesome Forbes article if you need convincing that your software business should be generating substantial revenue from your integrated payments offering.
So if you’re tired of talking about how expensive it is, now’s the time to start looking for a Stripe alternative.
#2 – Stripe is not negotiating
I’m sure at this point you have tried negotiating with Stripe and maybe after a long back and forth battle you’ve gotten them down to 2.7% and $0.25, but let’s face it, it doesn’t cost 2.7% and $0.25 to process most card payments. You know Stripe is making a lot of money off the customers you’re bringing to them and none of that money is going into your pocket. Stripe is notoriously inflexible, and their flat rate pricing model is often limiting for both you and your customers. It might even be pricing you out of the market if your customers are used to negotiating payment processing rates and can find a better deal elsewhere.
If you are lucky enough to get Stripe willing to negotiate, they will likely ask you to start taking on liabilities like chargebacks in exchange for only slightly better rates. That’s more risk, and, as a software vendor and not a payments expert, you may not fully understand what you’re taking on. Any lower rates you get from Stripe could be fully negated by the costs you’ll take on in liability, and you could easily find yourself in a situation you’re not prepared for.
If you’ve hit the point where you’re frustrated trying to negotiate with Stripe, it’s time to start looking for a new partner.
#3 – Your payments volume is increasing
Let’s be honest — we all know that Stripe does a great job marketing themselves. Most companies pick Stripe as their first option because it’s quick and easy, and when you’re not processing very much volume, it’s not very painful. But as your business grows, and therefore your payments volumes increase, it quickly becomes apparent that Stripe isn’t a long-term solution for your business and at some point you’ll need to make a change.
Maybe not today, maybe not tomorrow, but someday it will be too painful to give up all of your potential payments revenue to Stripe. You know that eventually you’ll need to start benefiting from the money you’re currently sending straight through to Stripe. It usually comes down to how hard it will be to switch.
What if we told you that you could be up and running with a new partner in less than one week, with no upfront costs, and start generating substantial revenue from the payments volume you’re already processing today. What are you waiting for?
#4 – You’re considering your exit strategy (or a new funding round)
When it comes to venture capital, a lot of VCs are starting to recognize the enormous value of payments processing as a revenue stream. They know that a properly monetized integrated payments strategy can have a huge impact on both the bottom line and the valuation of your business. That’s something you just can’t get with Stripe.
So when you’re considering your next funding round or your potential exit multiple and working to increase your margins, revenue and profitability, don’t ignore the additional recurring revenue that you can generate from the payments being processed through your software today. Would an extra $500,000+ a year in revenue be beneficial to your business?
#5 – You can’t stop talking about a Stripe alternative
Most companies recognize they need to move on from Stripe long before they actually do. But when they’ve looked at the alternatives, the decision is almost always to delay. It could take months to get another solution up and running — time and effort you just don’t have.
Whether it’s your CEO, CTO, CFO, or VP of Sales, you probably do have someone on your team who’s continually evaluating competitors. You talk about it at every board meeting. You ask your colleagues about it at events. You’re ready for a change.
Think you’re ready for a Stripe alternative?
Do any (or all) of these signs sound familiar to you? If so, you should seriously be considering PayFac-as-a-Service. At Tilled, we recognized that existing alternatives (PayFac-in-a-Box, Legacy Processors, ISOs) weren’t an adequate solution and so we spent the last few years building the right solution. So now there’s no more reason to delay switching. Our solution is as easy to set up as Stripe, just as seamless for your customers, but is designed with your business (and bottom line) in mind. Plug in our easy to implement APIs and start generating substantial revenue from your payments today.
Stripe was a great partner when you first started your business. But now, you’ve outgrown them. And that’s a good thing! It’s time to look at a Stripe alternative and may be the time to Get Tilled!