Payment Processing Landscape in Europe

It is a well-known yet long-standing fact that setting up payment processing is much harder in Europe than it is in the United States for example. A major reason for that complexity comes from the fact that, contrary to the US where they have big national banks that cover the entire American market, European payment processors have to deal with 27 different legal and tax environments, and very often 27 different sets of partnering banks. That’s probably why it took so long for Braintree Payments and Stripe to cross the Atlantic ocean, and even as they do, they do it in a very limited way.

I’m currently working on a new experiment for which I want to process payments in a native iOS app without disturbing the user experience I have spent hours perfecting. So I reviewed the most well-known contenders, limiting myself to the most modern and country-agnostic actors, and I’ve completed the following benchmark which might be useful to some of you.

Note that I have a few special requirements that are decisive for me but might not be applicable to you:

  • I’m using Parse for my backend, which doesn’t allow me to run any server-side code easily. I can run simple Javascript code that can call REST API’s (or special integration code when they have a partnership like with Stripe).
  • My service has a peer-to-peer marketplace business model, which means that I take a commission on direct transactions between end-users, which payment processors call Third Party Payments Aggregation. For acquiring banks, this kind of business models is often considered a risky one because it poses all sorts of questions in case of refunds. So not all acquiring banks accept TPPA.
  • A lot of payment processors say they offer mobile processing services when in fact they mean mobile WEB payment, which means stripped-down restyled version of their web forms that you have to integrate with web views and greatly disturb the user experience. That may be enough for most applications, but I didn’t want to sacrifice user experience (and thus conversion) in my case.
  • As I said, my app is just an experiment for now. I don’t know how much volume it’s gonna deal with, and I don’t want to wait months to have my payment processing ready just because I’m a “small fish”.
  • Since it’s a mobile app, I would really like to be able to store credit card data for later so that my end users don’t have to enter 23 digits for every transaction (secured vault).

Also, be careful. This is the situation as of mid-April 2013 and it’s very likely to evolve a lot over the coming months and years.

 

  • I’ve rejected Paypal and Adyen because of their lack of native iOS integration
  • Stripe is not available in Belgium yet and will probably not be anytime soon
  • Braintree Payments is available in Belgium but their mobile wallet (Venmo Touch) is not available in Europe yet, and the dealbreaker for me was that they couldn’t find any acquiring partner in Europe to support TPPA.
  • Ogone is very cumbersome to set up, their documentation is awful, their backoffice interface is simply unreadable, but more importantly they don’t support native iOS integration.

A few days ago, Paymill released the first beta of their iOS and Android SDK. The activation process went pretty smoothly and their documentation is rather clear compared to some of the others. They are using Acceptance as an acquirer in Germany. I have started to integrate the SDK into my app and so far it works great. The API is pretty straightforward, even if they still need to work on naming conventions in my opinion. But it’s definitely the most promising actor on the market today.

If you have any complement to add to this information, feel free to leave a comment.

EDIT: Thanks to marcos for pointing me to 2 mistakes in my benchmark. Paypal actually does have a REST API but it’s only available in the US for now (in beta). They also have a native iOS SDK that I hadn’t found. Given that the REST API is not available in Belgium, I wouldn’t be able to verify payments, and I still don’t trust Paypal to keep my funds available so I’m still sticking with Paymill for now. But I have updated the benchmark accordingly.

EDIT2: There’s a new kid in town. Leetchi just publicly announced their new e-money service for collaborative consumption and marketplaces: MangoPay. I’ve added them the the benchmark. Their REST API is still a little too low level for me and they don’t seem to be planning an iOS or Android SDK right now so it won’t make me switch from Paymill yet. Plus their e-money concept needs some explaining. But it looks like an interesting European alternative to Stripe Connect.

UPDATE: Paymill just released their marketplace offering to compete with Stripe’s Connect: https://www.paymill.com/en-gb/product/unite/

UPDATE: Braintree Payments just released their marketplace offering, but it’s only available for US businesses for now: https://www.braintreepayments.com/marketplace

7 comments

  1. Hi Sebastien,

    TPPA business models can be tricky at times and are relatively new (even in the US), so as a payments provider (Braintree) we are constantly educating / consulting with our partners of these new models- in order to work with a greater number of TPPA companies. Having said that, Braintree does support TPPA in Europe for some business models, but unfortunately not all. We hope to accept a larger set of TPPA’s in the coming months as we look to expand our capabilities across Europe- including the addition of new banking / acquiring partners.

    Stay tuned!

  2. thank you for a clear and concise overview. it explains why european business models seem to lag behind US ideas. can we see the day when EU legislation might cure some of these woes ?

  3. Hi,

    Very interesting article.

    Could you please inform us if there are more options for processors that accept TPPA in Europe?

    Btw, I contacted adyen and they told me that they do not accept TPPA.

    thanks,
    George

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