Stripe vs Ultrapayment: a Comparison
One of the alternatives for accepting online payments making news lately is Stripe. Backed by the founder of Twitter (and 10's of millions of dollars of V.C. investor money), Stripe has a transparent pricing model very similar to Ultrapayment, with no hidden fees and a simple flat percentage rate and a per-transaction fee. Stripe's simple integration (no gateway) and clear flat-rate pricing (2.95% + 0.30 cents/txn) have allowed them to seize market share of merchants looking for a straightforward alternative to traditional merchant accounts.
While Stripe's quoted rate is about one-percent (1%) lower than a full-service Ultrapayment merchant account, the Stripe per-transaction fee is three times (3x) higher than accepting credit cards through an Ultrapayment account. This can make a Stripe account significantly more expensive for online merchants doing higher-volume, lower- value transactions because the higher transaction fee on every order results in a much higher effective rate paid by the merchant than they would with an actual Ultrapayment merchant account.
Consider the example of one former Striper user that switched to Ultrapayment; a food cart vendor in Seattle selling lunch-time ethnic food in a downtown business district. The average purchase is $5.00, and they sell 100 orders a day, 5 days a week.
Despite Stripe's slightly-lower quoted rate, this merchant paid 49% higher fees ($73.75) with Stripe than they did using their Ultrapayment merchant account. Not only did their total fees drop with Ultrapayment, but they now enjoy the benefits of next-day funding; all credit and debit card payments processed through an Ultrapayment merchant account are paid out to the merchant the very next day. Compare this to Stripe, which holds all merchant funds for 7 days before payout (less fees) and the benefits of using Ultrapayment merchant account instead of alternative payment methods like Paypal or Stripe become even more important.