Smashing Boxes Software Engineer Colin Di Meo highlights Stripe payment processing software and shares the importance of understanding the business impact of technical integrations.
Do you have a killer idea for an app or website?
Let's say you have your business model fleshed out and ready to go, and you're ready to partner with a software development agency to bring your idea to life.
If your application or website will be accepting payments from users, you'll need to choose a payment processor to integrate into your product or service. This choice will have a significant impact across the business - from the developers integrating the service to the business stakeholders responsible for revenue and growth.
Today we're going to look at one payment processing integration that is a home run for both the development team and the business stakeholders: Stripe.
Why Developers and Engineers Love Stripe
Stripe is the best payment processing platform for running an online business. We'll get into the business benefits of this integration in a moment. Now, let's take a look at why Smashing Boxes software engineers champion Stripe.
First, Stripe’s powerful and flexible API allows the service to be fine-tuned to cater to the specific needs of your business, whether it's a subscription-based company or an on-demand service provider in the gig economy. The clear, concise, and detailed API documentation that includes real-world examples makes the Stripe APIs a pleasure to work with. It easily integrates with hundreds of other applications, making for a quick and easy setup process for the engineering team.
Another benefit is the Stripe Dashboard which comes standard with every account. This feature-rich user interface saves a lot of development effort, reducing the engineering team's billable hours and saving you money. It can be used to manage payments and refunds, respond to disputes, monitor your integration, and more. This dashboard provides helpful at-a-glance information about the activity on your account.
Stripe also shines when it comes to the end-user experience. While other payment processing software, like PayPal, directs your users to a third-party site to complete a transaction, Stripe handles all payments behind the scenes on your website. This creates a more streamlined and branded user experience.
A win for both business stakeholders and the software engineering team is Stripe's guaranteed compliance and security. The payment processor allows direct website integration, with no branding, and all sensitive data completely bypasses your website and goes directly to Stripe. This automatically ensures PCI compliance.
In regards to security, Stripe utilizes Radar, a machine learning fraud system to protect customers against data theft. This tool is constantly learning and evolving and provides real-time scoring for every incoming payment based on thousands of signals. If you consider a tool like Paypal, sensitive credit card data has to pass through your server first, putting a security burden on the engineer or customer regarding potential breaches or misuse of data.
Why Business Stakeholders Champion Stripe
While the developer has to concern themselves with the actual implementation of the code to create transactional functionality, the stakeholders need to be aware of what that means in terms of cost impact to their business.
Stripe boasts an easily understood cost structure, with no monthly or hidden fees. There are many different options for how parties can transact with one another, however, regardless of how that is implemented, they levy a base fee (2.9% + $0.30) for all transactions they process:
|Amount to be processed:||Stripe Fee (2.9% + $0.30):||Total:|
|$ 10.00||$ 0.59||$ 9.41|
|$ 20.00||$ 0.88||$ 19.12|
|$ 30.00||$ 1.17||$ 28.83|
|$ 40.00||$ 1.46||$ 38.54|
|$ 50.00||$ 1.75||$ 48.25|
|$ 60.00||$ 2.04||$ 57.96|
|$ 70.00||$ 2.33||$ 67.67|
|$ 80.00||$ 2.62||$ 77.38|
|$ 90.00||$ 2.91||$ 87.09|
|$ 100.00||$ 3.20||$ 96.80|
This is straightforward in the case of a platform selling things directly to an end-user and retaining the funds from that sale. However, Stripe also supports the ability for a platform to process a charge and then send a payout amount to a destination. Uber is a great example of this. A customer requests a driver via the platform, the platform handles the charge and then pays out to the driver.
Out of the box, Stripe offers a 2-day payout schedule without any additional fee. Should your business model require your vendors/payees to be paid immediately, you might want to use Stripe's instant payout functionality. One warning with this functionality: Stripe levees an additional fee of 1.5% or $0.50 of the amount being transferred - whichever is greater.
Let’s dive into the numbers behind an operation similar to this. We’ll assume your application has a payment structure similar to Uber: A customer pays through the application for a service rendered by another user - the amount to be paid needs to be transferred in its entirety to the other person for their work.
|Amount to Be Processed:||Stripe Fee (2.9% + $0.30):||Amount To Be Transferred:||Instant Transfer Fee (1.5% or $0.50):||Total Fees To Platform:|
|$ 10.00||$ 0.59||$ 10.00||$0.50||$ 1.09|
|$ 20.00||$ 0.88||$ 20.00||$0.50||$ 1.38|
|$ 30.00||$ 1.17||$ 30.00||$0.50||$ 1.67|
|$ 40.00||$ 1.46||$ 40.00||$0.60||$ 2.06|
|$ 50.00||$ 1.75||$ 50.00||$0.75||$ 2.50|
|$ 60.00||$ 2.04||$ 60.00||$0.90||$ 2.94|
|$ 70.00||$ 2.33||$ 70.00||$1.05||$ 3.38|
|$ 80.00||$ 2.62||$ 80.00||$1.20||$ 3.82|
|$ 90.00||$ 2.91||$ 90.00||$1.35||$ 4.26|
|$ 100.00||$ 3.20||$ 100.00||$1.50||$ 4.70|
In cases like the one outlined above, it may be worth considering adding a service fee to be paid to the platform to help offset the processing fees.
Whether you are a principal engineer or CEO, Stripe is an easy-to-customize interface that provides your users with stellar user experience.
This is why Stripe was the perfect integration for the Gopher Request and Gopher Go mobile apps. Gopher Request enables users to quickly and easily request goods and services based on their own price and time preference. Gopher Go makes it easy to accept and complete tasks with instant cash payments. To truly aid Gopher in differentiating itself from the competition, the Smashing Boxes engineering team chose the Stripe integration to facilitate payments and enable same-day payout for the Gophers that fulfill requests. Learn more about Gopher here.
While developers prefer certain tools to help in the process of building an application, business stakeholders should be aware of the potential impact that these integrations have on an organization. Make sure the software development agency you’re working with is aware of these implications and that they take the time to discuss them with you early on a project so you can adequately plan.
Have an idea for a killer app or website? Contact us today to bring your idea to life!