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14 Comments

What do you use use as a payment method and why?

Hello guys,
I was wondering what are you using as a payment method in your apps.
I know that Stripe is very popular but I was wondering how do you guys manage the VAT. For instance in Europe we have different VAT by countries so you have to manually charge it a different based on the location of the user.

There are solutions like https://paddle.com/ that manage the VAT but charge a higher fee.

Curious to hear your input about this subject

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    @vladwulf, to clarify, it doesn't really matter which payment processor you use: you'll always be held responsible for VAT and if you're in the EU and in B2C, it gets ridiculously complicated. Either register in every country and submit your taxes, or sign up for MOSS. Plus all that consumer country identification stuff...

    Stripe, PayPal, etc. don't help you with that.

    Paddle or FastSpring act as an intermediary between you and the buyer - the so-called merchant on record. They're charging more because they're taking the burden of VAT and sales tax handling from you. They also have no interest conflict when it comes to the offering of payment methods, as opposed to Stripe vs. PayPal which you would have to implement both if you would do it yourself.

    Even with Paddle or FastSpring you would have to deal with VAT and e.g. submit your monthly preliminary VAT return, or however this works in the country of your business. The difference is that you would be transacting with just one party then, instead of n.

    1. 1

      Thank you for the reply @digitalbreed
      Very informative!

  2. 1

    Hey @vladwulf

    I used to run a software agency building MVP apps for clients. We ran into these issues a lot (we are based in the UK), so we built our own product to help handle them. Payhere (https://payhere.co) is a layer on top of Stripe + GoCardless that makes it very easy to setup payments for your app, we record the customer and the VAT amount due for each sale at the appropriate rate and you can export all of that data out in CSV to easily push into VAT MOSS for your accounts.

    We like services like FastSpring but always found they are too heavily branded and can confuse your customers, we want your payment page to feel like it belongs to you and have your logo and brand colours.

    Check it out, would be really keen to know what you think and if there are any particular reasons why you wouldn't use it :)

    We have a React and JavaScript SDK and it's very easy to integrate with. You can see an example fundraising page we've put together and how it would work for your customers: https://fundraising.now.sh/

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    Commenting to bookmark this post

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    So we're using Stripe, Paddle we could maybe use but the gated need to talk to sales is off-putting, the percentage and fees per transaction do matter at scale, having to haggle and negotiate is a bit of a pest.

  5. 1

    Gumroad, for EU VAT reasons

  6. 1

    I use https://www.sendowl.com/
    It's ridiculously cheap compared to the alternatives (aka, fixed price and no % on transactions), it act as a gateway over Stripe, PayPal, BitPay and a number of local esoteric payment methods popular in this or that country. They take care of finding proof of customer country identification and send you an alert if something is off, if a customer certify his country as A but all the pointers are to country B. You get monthly report you (or your accountant) are responsible to submit to the MOSS.

    There are a couple of downside though:
    1 is that you can't have prices VAT included so for every B2C in EU the VAT will be added to your price, this is not very common and users don't like that (price page says 2€ but they end up paying 2€ + VAT)
    2 they don't offer PDF invoices for customers. You have an email template you can fiddle with, customers will receive a email invoice/receit but still, you will get some writing asking for a "proper" PDF invoice, this is annoying and somewhat time consuming.

    These are the two most annoying things for me, I also filed feature requests a couple of time but I don't think they are going to implement them. Beside that they are packed with features (Coupon codes, license keys generations..) for an unreasonably low price. I've been using them for 3 years now and I'm very happy.

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      Never used it but surely on SendOwl you'd just change the list price to be minus vat within that portal and then for the customer the total is still 2 euro?

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        Not really because as a EU based business you charge VAT only to EU customers, you don't want to show 1,64€ to US customers or when you do B2B... also, different EU countries have different VAT so there isn't a single VAT amount to subtract.

  7. 1

    Hey @vladwulf. How do you like Paddle? I'm thinking about integrating it in my product as well. Did you find out what are their fees? I tried searching for it on the website but couldn't find anything. I guess I have to talk with them.

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      The fees for Paddle are 5% + 0.50$ per transaction.

    2. 1

      Hey man, I didn't try it yet but I know some people who used it and they like it.
      Regarding fees I think it's something like 10% off the transaction.

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        No minimum? Because 10% of $1 is 10 cents, I guess they won't be happy if I'm queuing $1 transactions like crazy :D

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          As @scholz has said; it's 5% + $0.5.

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