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Comment by Domenic_S | Hacker News Reader

They're protected from being cut out because they are the networks on which the credit card system runs. If you look at a stripe-issued card, you'll see there's still a visa or mc logo in the corner.

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I understand how the system works; the requests hit the API before the credit card network. Hence the ability to cut out the network if Stripe is willing to take the chargeback/fraud risk.

No, they would need to become money transmitters according to what you wrote above. AFAIK they aren't money transmitters yet.

It depends on the jurisdiction, but they are in many! It is something they have been working towards for quite some time.

They list themselves as having money transmitter licenses across the US.

see e.g. https://stripe.com/us/payments and https://stripe.com/connect (under "Rigorous Compliance" and "Compliance respectively").

You'll also find them on CA's directory of money transmitters. http://www.dbo.ca.gov/Licensees/money_transmitters/money_tra...

You're saying Stripe would process directly when their own card is used on their own network, and then outside the network they'd process through visa/mc?

Well something like that depending on the Stripe infrastructure.

That currently happens when an issuer card is used in a merchant that is acquired/processed with the same issuing bank. It is called an "on us" transaction and doesn't need to fire through the card scheme rails.

I assume that still incurs a visa fee. Perhaps just bypasses the underwriting. Otherwise, I can't imagine visa would allow this.

I can't see how they could disallow it to be honest. That would be seriously anti-competitive.

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