Can stripe 1st work on reducing their fees?
They're just like the incumbents. Only surrounded by more silicon valley sycophants.
Taking 2.6%+ of every merchant transaction is nuts.
They're just like the incumbents. Only surrounded by more silicon valley sycophants.
Taking 2.6%+ of every merchant transaction is nuts.
Square's is 2.6% + $0.10
Paypal's is 2.7%
Fees directly from the merchant card issuers (Visa, Mastercard, etc) are sometimes lower (ranging from 1.4% - 2.6%, and even 3.5% for AmEx) but Stripe is a service that is on top of those fees , and any merchant will add on top of those fees as well.
The way it works for "the networks" (Visa, Mastercard, Amex) is that they have several "interchange rates" ( https://www.helcim.com/us/pricing/visa-interchange-rates/ ) which vary depending on the risk of the card [transaction].
"Flat fee" card payment providers win by setting an average flat-fee that they believe will be higher than the mixed (average) interchange range of the payers. Also, lower card rates can be obtained capturing what is called "level 2" or "level 3" data ( https://www08.wellsfargomedia.com/assets/pdf/small-business/... ).
There's now no economic reason for these fees to remain so high. I worked at a payment processor.
The way I always think of it is like this: You would NEVER accept to pay to send an email per number of the words in that email, at the end of the day it is just transferring bytes. However the payments industry has been working like that for too long, why does the cost of sending some "money transfer" bytes be a function of the number you are sending? (like, sending $9156 is more expensive to transfer than $100000 bc of compression)
That's why I joined Paystand [1] to do "Payment as a Service". Similarly how you pay a fixed monthly a month to receive emails, you should be able to pay a fixed amount to receive payments (using the Paystand network). Nevertheless, we have to support legacy networks such as Mastercard, VISA or Amex which still charge customers per transaction.
[1] https://venturebeat.com/2020/02/06/paystand-raises-20-millio...