The Bullshit of Payment Providers

Image for post
Image for post

I want to be able to accept (recurring) payments for my company’s services. It isn’t much to ask, is it.

Well, it’s more complicated. Let me explain how we currently don’t have a working website subscription and instead ask clients to do bank transfers while we resolve the issue.

I run a subscription business, offering a cloud-based secure audit trail. We advertise it as “blockchain-inspired” because we utilize most of the cryptography underlying popular blockchain implementations in order to protect the integrity of the audit trail (this is important for the story below). It’s essentially an information security solution used by banks, governments, medical institutions.

First, not all payment providers work with my country, Bulgaria. It’s an EU country, but nevertheless it’s not an option in many cases. So our choice was limited to begin with.

We started with Braintree — we tried to register there two years ago. We got rejected, because our line of business seemed high risk to them. My suspicion based on our communication is that they saw the word “blockchain” and thought “hey, they are trading cryptocurrencies, that’s high risk”. We have absolutely nothing to do with cryptocurrencies, but their compliance checklist was already completed.

So we went for Paymill — their API is good, they work with our country, and everything seemed smooth. Until they refused to accept electronically signed documents (with qualified electronic signature with a smartcard, which is legally binding in all of the EU according to Regulation (EU) 910/2014). We had to mail paper documents to Germany. Much technology, wow.

All was fine until this summer we got an email from them that the acquirer they work with has been suspended by the Luxembourg financial regulator. Wow, suspending of a financial institution does not happen because of minor non-compliance. That means that no payments were possible. Paymill didn’t say anything specific, just informed us that their might be disruptions. With a huge delay they answered the support ticket and said “well, you can now switch to Wirecard, our new acquirer, but your existing customers must re-enter their card details”.

Enter Wirecard. As a new acquirer, they had to approve our application. And they didn’t, because of undisclosed reasons. Most likely the blockchain issue again. So we’re done with Paymill, and ask them to close our account and wire everything that is collected there, hopefully they’ll do that.

Next we went for Stripe. They offer their service in most, but not all EU countries. Single market, my ass. But for a year we have been operating with a Dutch legal entity, so Stripe is an option. Or not — their registration form requires the address of the person that registers the account to be in the country where the company is registered. Which is legal nonsense — I may live in Belgium, be a German citizen and run a Dutch business, why would they care where I live. With a few exchanges with their twitter support we agreed that I can just reuse the business address in the 2nd address field as well. But nobody thought that maybe the country of a company is not the same as the country of residence of the manager.

Why Stripe? Well, because most other options have worse APIs and integration options. Some, for example, want you to manually handle 3D passwords or other 2FA options provided by Visa/MasterCard. Some don’t have a “drop-in” module that you place on your website. Some have rates that are too high.

It’s generally a complete mess — services are not offered to the EU single market, compliance departments are clueless about technology and can reject you because they saw a “dangerous word” (and you can’t appeal because everything is secret), APIs and integration are a burden in some cases and every now and then an acquirer gets closed and you have to start from scratch.

A brave new world of Fintech, indeed.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store