Stripe increases fees for EU and UK-based businesses in April
support.stripe.com
support.stripe.com
- mollie (Netherlands)
- adyen (Netherlands)
- Klarna (Sweden)
- Paylike (Denmark)
- Mangopay (Luxembourg)
- Quickpay (Denmark) (added in edit)
The ones I've tried of those, have an OK development experience, maybe not as polished as Stripe, but much better than the alternatives that were around before Stripe (huge hassle back then). Ideally, you'll support at least two providers you can switch between, if you can afford the development of supporting two, as at one point or another, it'll save your ass or at least a bit of money as fee structures change between providers. It'll also be easier to integrate a third one in the future when you eventually find the perfect one (until they turn into the next Stripe).
> Dispute fees (also known as chargebacks) will increase from €15 to €20. Due to costs for managing dispute evidence submissions, we'll no longer refund this fee if the customer's bank resolves the dispute in your favor.
This strikes me as weird. User buys something from me, regrets it and issues a chargeback, dispute gets started and bank says I did nothing wrong, so the charge still sticks, but Stripe gets to keep the fee for handling the dispute?
I'm much more likely to enter my card number somewhere online knowing that I'll be made whole if something doesn't work out than knowing I'll have to fight for my money back, submit evidence I might not have etc.
Just like with fraud [1], and for similar reasons, the optimal number of successful "false disputes" in a payments and commerce system is probably non-zero: Hopefully, for every dishonest/egregious dispute, merchants see dozens of customers that would otherwise not dare to do business with an unknown/new merchant.
[1] https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...
Paypal is able to step in BETWEEEN - bevore the customer is able to start a stupid and complicated CHARGEBACK at his bank. Very often you loose a paypal case. But: That means only the CHARGE(money) goes back, but the bank can not take a 35$ fee for chargeback too.
You understand?
I am selling 99 cent downloads. On Paypal I loose nothing (99 Cent goes back) On stupid systems like stripe, where they do not handle any customer-communication - I loose 20 Euros + 99 Cent. Complete desaster.
I will add a 5 Cent extra fee to stripe payments in the future to handle that high chargeback fee. That will work into paypals hands.
And their bank wants to have their customer with them - so they steal the money from the merchant. Thats what they are allowed to do.
Think about it: a) The customers bank is the ONLY judge, they can say: Merchant, you lost the dispute. b) The bank wants to do something in the favour of THEIR customer, why should be bank decide in the favour of a NON-CUSTOMER (the unknown merchant)
This system is complete bogus, nonsense and just stupid.
There is around 0,1% customers around who are just a...holes and try to get back some money. If they know how the system works, they do it. For example: If you loose your credit card you can go to the bank and say: All payments before date XY are not mine. There might be 1 illegal payment, but they can say: Everything since November was fraud. Bank will believe them.
I have "online customers" who did that, and I did not even get their contact details to sue them.
Managing disputes is also a costly and manual process for our users. So we’ve invested heavily in ways to help mitigate disputes from occurring in the first place with Stripe Radar (incl. by default), or by using Chargeback Protection (where we cover the disputed amount and waive any fees without needing to submit any evidence).
Is this charge returned to Stripe if the bank rules in the favor of the Stripe user? Or did that change recently as well, as now Stripe won't hand back the fee in case the dispute is overturned.
Thanks a lot for jumping into the thread with some more facts.
To simplify things, think of Stripe as an facilitator in the dispute process. Stripe has no influence over the outcome—it's at the sole discretion of the cardholder's bank. Stripe deducts a dispute fee to cover the cost charged to us for dispute submission.
In the past, we returned this fee even though the card networks don't reimburse us. This is no longer the case (we now pass through the fee).
We're now charged more for dispute submissions. These costs are set solely by the card networks and we'll no longer bear those costs (bringing us inline with the market).
Having said that - I think there was a lot of room for nuance in this rollout, which kinda got shoved up into a one-size-fits-all policy.
I'll give my own business as a reference - I have a 100% chargeback "win" rate; including in cases where Stripe estimated low win success odds. Chargebacks have (so far) come exclusively from bad faith actors.
With this latest iteration - fledgling businesses like mine are massively exposed to competitors making bad-faith bookings and issuing chargebacks against us; which even if we were to successfully defend - would entirely bankrupt us.
Has Stripe explored a mitigation of a scenario such as this?
Following through on the same line of thought - has Stripe considered a more balanced approach where if merchants have a success rate of more than a certain threshold (which by all means can be high) - then they are more "protected" on chargebacks they win? It could be a much better balance in filtering out good vs bad actors on the merchant side.
Potentially also something to pitch to card networks - they will certainly not listen to individual merchants, but if I had to guess - they wouldn't ignore this sort of pitch from Stripe?
And if you were to do so - you would be building loyalty from your "good merchants" by providing a value offering beyond the market; the ones whom are less likely to encounter chargebacks to begin with (and win those they do encounter); since you'll then have a value prop ahead/better than the market. Which just seems like a sound long-game bet.
One person's thoughts etc etc - but the current version of the chargeback fee rollout - while well rationalized, also feels heavy handed and not with the usual finesse/nuance with which I've seen Stripe's usual policy modifications. Thought I'd throw my 2c into the mix.
From memory they have legal obligation to open an API and give access, but no real penalty if it doesn't work or is utterly garbage or impractical.
Not sure what you mean by impractical API. If their API is not practical, then nobody would use it, I suppose. If it is barely practical, then an abstraction layer would be a godsent.
If I'm going to be charged 20 euros whether I succeed or not then for small disputes I may not bother spending the time to submit evidence anymore...
Edit: I see that they have a Chargeback Protection product with costs 0.4% per transaction in which case they "cover the disputed amount and waive any dispute fees without needing to submit any evidence" (another comment by smca)... So cynically that sounds like a commercial tactic to sell that product!
> If the dispute activity for your business exceeds the thresholds set by the networks for a prolonged period of time (usually multiple months), you might be subject to fines.
Yes, that's my point.
The fee gets paid back in full to you by Stripe if you win the dispute.
https://support.stripe.com/questions/pricing-updates-for-bus...
> Dispute fees (also known as chargebacks) will increase from €15 to €20. Due to costs for managing dispute evidence submissions, we'll no longer refund this fee if the customer's bank resolves the dispute in your favor.
It used to be that you got the fee refunded if it got resolved in your favor, but after the changes go into effect (10 April 2023), it won't be like that anymore.
"Changes for disputes Fees for disputes (also known as chargeback or recrediting) will increase from €15 to €20. If the customer's bank resolves the dispute in your favour, the full fee will be refunded."
Edit: After doing some more research, it seems that it is only US customers that will lose their dispute fee. If you choose English (United Kingdom) as your language, it says you can keep the fee if you win the dispute.
But you're right that at least ub Spanish (Spain), French (France), Italian, Portuguese (Brazil) it says that the fee will be refunded if the dispute is resolved in your favour.
Oops.
It will be interesting to see exactly who is going to have this change imposed on them.
The fines imposed can be very high if you don't take steps to mitigate disputes. We have a vested interest in ensuring businesses on Stripe aren't affected by these programs. https://stripe.com/docs/disputes/monitoring-programs
There was a spate of people selling PS5 boxes on Ebay a while back. They clearly said PS5 "box" but the word box is small and surrounded by "New" "Unwanted gift" etc and priced at the RRP of a PS5. So people bought them and mistakenly thinking they were getting a PS5. Ebay ultimately banned such products (I believe). But I can see a payment provider wanting to dissuade crappy products with a lot of unhappy customers.
The upside is Mangopay was pretty reactive when we needed a human to talk to, the downside being that many requests would just end in "tough luck, we're too smal for that"
We ended up moving to Adyen for that reason.
But to be approved you need to talk with them. As long as what you're doing is a real company (and you have documentation to prove it), they'll approve you. But you do need to setup a proper business before being able to go live with payments.
It is however not that simple if you want to remember your customers payment information, and don’t want any PCI-DSS liability or obligations. You’ll need a card vaulting solution in the middle, which comes as additional burden (and cost!) on top of the other payment provider integration. There’s big volumes you need to process to offset all of this, and probably not ROI sensible for many.
I'm surprised Stripe hasn't come with their own multi-processing router solution for enterprises at this point; whichever major payment processor who would do this, could become a de facto choice as primary or secondary payment gateway for enterprises requiring this.
So many payment processors were going to fail to meet the deadline to implement it they moved it back a year. The main payment processor we use met that deadline and we started using it. But many others did not and it was pushed back another year. I'm not sure when it finally actually came into effect because I didn’t pay much attention after that.
Under SCF when you charge a card and intend to store that card you have to set a flag in the transaction signaling that intent. After the transaction you need to save the Visa or MasterCard assigned transaction ID.
Later, when you use the stored card there's flag you have to set that marks this transaction as using a stored card, a flag you have to set if the charge is merchant initiated (e.g., an automatic subscription renewal) rather than customer initiated (e.g., they order something from website and elect to put it on their on file card), and you have to provide the transaction ID of the transaction that was done when you first stored the card.
It's that prior transaction ID that is the problem. With many payment processors the transaction ID they give you is one they generate, not the one that Visa or MasterCard generates.
As part of implementing SCF those processors will remember the Visa or MasterCard transaction associated with transactions that had the "we are going to store this card" flag set, and so later when you use the stored card you just have to provide the transaction ID they gave you and they look up the Visa/MasterCard transaction ID to send to the card company.
So say you charge a new Visa card through provider X, setting the "we are going to store this card" flag. X gives you an X transaction number X-1234, which you remember, and X remembers that X-1234 means Visa transaction ID V918273.
A year later it is time to auto-renew that customer, and you want to do that through provider Y. But Y's interface expects a Y transaction ID. You can't give them X-1234 and have them do anything sensible with it.
As far as I can tell for many combinations of X and Y there is simply no way to do an on file charge at Y with a card that was put on file after an X transaction, except perhaps by at the time of the X transaction also doing something like a $1 authorize with Y and hoping that the Y transaction ID for that will work with Y for later doing an actual charge.
You need some way to get the Visa/MasterCard transaction ID, and you need X and Y to allow you to provide a Visa/MasterCard transaction ID for the SCF stuff.
You should include this in your contract terms with the customer and collect the dispute fee from them.
It's not reasonable of you to expect Stripe to just absorb this cost.
What are you going to do, sue over 20 euro?
In the case of an actual dispute (non-shipment, etc) you do have an actual contract. However, this smells like extortion(?). You didn’t deliver on your end of the contract (deliver goods) but are penalizing the other side for your failure to deliver. It won’t go over well when you get the class-action suit, and all the little ones in-between.
Especially online, the law says: Customer gets back ALL of his money, every cent.
You will be sued by customer protections in a minute if you act like that. Do you seriously run a business???
I am surprised how little Stripe charges. I processed close to 100MM since 2012 via different merchants, including Polcard, banks such as Harris, Wells, BOA, etc, and even 10 years ago typical fee was $35. And no, they never give you the fee back; if you win they give you the charge amount back, but the processing fee always remained with MSP.
On the upside, over the years credit cards vendors made it harder to file the dispute. Yes its easier to do it online with few clicks, but that's not a dispute yet. These days most people sit in banks and research into charge, including calling merchant, before they submit a CB with the card system.
Erm, isn't Klarna a BNPL company ?
Important not to conflate BNPL with merchant services (card payments).
Actually, I can find several emails that say something along the lines of "Klarna - Card payment" or "Klarna Checkout". Never done BNPL.
e.g. Sofort is run by Klarna for some reason - https://www.klarna.com/pay-now/business/merchant-support/wha...
So it seems conceivable that they have options to process regular card payments too
Stripe locked us in.
You're not locked in. People migrate off Stripe all the time.
> If you decide to leave Stripe for another payment processor, we’ll work with your new processor’s team to securely transfer your credit card data.
PAN Migrations.
https://stripe.com/docs/account/data-migrations/pan-export
Different payment providers also can help you with the import, here is an example on how to import data from Stripe to Adyen:
https://docs.adyen.com/development-resources/migrating-payme...
It's about risk. This requires time and effort to reconcile. Someone has to do something. The fee covers this. Does it suck? For you, sure. For the customer? No. It's peace of mind. It's why people willingly shop online. Don't like it? Negotiate your own terms with a bank for your own merchant account.
And yes the charge sticks. If you have 1000 purchases and all 1000 people dispute, that's a hassle the bank needs to deal with. Compared to someone with 1000 purchases with 1 dispute, even if that dispute is valid, it's much less work. Much less costly for the bank. So part of your responsibility as a merchant is to prevent that as much as possible.
> Stripe gets to keep the fee for handling the dispute?
No, the bank is keeping the money. Stripe had the money taken. This is passed on to you.
Seriously, this is payment processing 101.
It is still weird and one-sided. Merchants are still being abused and in some cases that still causes them serious harm through no fault of their own. Unregulated chargebacks should still be legislated out of existence - preferably along with the whole anachronistic card payments system. It is still insane that so much everyday commerce relies on such an antiquated, dangerous, inefficient system in the 21st century.
So it's entirely reasonable for someone who isn't intimately familiar with how all of this actually works to be surprised by the situation and think it's broken. Because it is. It's not really Stripe's fault here though.
It’s very normal. It’s why a lot of services immediately ban you for life if you ever issue a chargeback (regardless of validity).
Stripe was the sole sensible service out there (that I know of) where chargebacks wouldn’t hit a small business as hard as long as they could prove they were in the right.
But it seems Stripe is becoming everything it originally railed against.
Easier to just lifeban every customer that does a chargeback vs spend 10 hours dealing with stripe + bank, and still losing, no matter the reason.
we were winning at least 50% of our chargebacks by providing evidence.
> Easier to just lifeban every customer
true. funny how an instrument that is supposed to combat fraud (by companies), is now mostly used to commit fraud (by consumers)
I have literal screenshots of a customer saying the opposite of the complaint, and still lost.
> saying the opposite of the complaint, and still lost.
yeah. even if its obvious that the customer made a fraudulent chargeback, you may loose. my only point was that not all chargebacks are lost, it is possible to win a good percentage.
i wish Stripe had an option to auto-block all customers who requested a chargeback from ever purchasing again...
Each one we send detailed IP logs, a graph of the customers use of the service, and a letter on the company letterhead stating when the person signed up, what the service is, and how they've used it. Each time (barring those two), we lose.
I'm sure some are legit frauds, but I know factually from speaking to our customers that some of them are just abusing the system of carte blanche by the banks.
If you are a fly by night op like amazon with inventory commingling I guess you don’t stand a chance.
Bank decides what they want to give their customer back. They ignore all your facts. Why should the BANK give a stranger money, if they can give money to their customer?
At this day and age, I don't understand why would any small to medium business that sells online internationally use anything else but Merchant of Records. International taxes are just a PITA that it's not worth trading a few percent of payment processor fee for a full-blown team of international tax accountants.
But in 5-10 years I won't be surprised if Paddle is the new Stripe because of that. It has the same feeling of being a disruptive upstart but solving a real and significant problem that Stripe had at the start. And with the way the political winds have been blowing in much of the world I can only see that problem becoming more significant for more businesses over the next few years.
Anyway, they might handle customer-communication with the merchant better.
Stripe offers nothing. If the customer could "contact" the seller, everyhting would work out better.
Just think - you have only 11 CHARS(!!!) to describe your service, thats what the customer sees on his monthyl CC bill. I am unable to describe it to everc customer in 11 chars, so 1 out of 1000 belives it was fraud because people do not remember what they bought online.
I understand that costs are higher when using credit cards because of the credit part that introduces risk, but in my case for example I have a debit card that runs also over Mastercard, so either I have the money or I don't. Why should a merchant be charged the same fee of using a real credit card if the risk is highly reduced?
I still don't understand why it is so hard to break the Visa/Mastercard duopoly on card payments. Why isn't there a standard for payments that banks can implement? Why are Visa/Mastercard/Amex required? SEPA in EU is already something but it is taking ages for it to become an actual payment platform in everyday's life.
The closest we get to that is loyalty cards and gift cards that only work in one shop. Some of those have managed to be compatible with a few shops, but nowhere near what would be needed for a consumer to consider it a replacement for visa.
Lobbying is the only reason I see that keeps a payment standard from being implemented.
The economic burden of the "old-school" payment networks Visa and Mastercard is very low for both merchants and customers for what these networks provide. The economic burden and other burdens of a one world government would be immense in comparison.
Please remember that most people use other methods to transact larger amounts, so the fees are mostly for the convenience of small remote transactions.
I dunno, that just sounds too soul destroying to me.
Is there anything stopping merchants from offering different prices to people based on different payment methods?
I assume the reason merchants do not list a discount for paying via SEPA or ACH or debit card or whatever local non credit card (and non Visa/Amex/MC) option, is because merchants benefit from the higher prices that people are willing to pay when using credit cards (compared to the cost of accepting credit cards).
In the US, Target is the only big retailer I know that discounts for using ACH (debiting directly from bank account). They give 5% off.
I think there's an EU rule about that. I've seen a business (justeat) charge a card-processing fee for cash-on-delivery orders.
https://europa.eu/youreurope/citizens/consumers/shopping/pri...
I know credit card fees are capped in EU, so this might be a reasonable policy, but if merchants and domestic customers have to eat costs due to foreign card costs via higher prices for everyone, that does not seem fair.
No, only regulated cards have to be accepted at that price.
So a surcharge can be charged for EU commercial cards which also cost > 2% and are not subject to the interchange regulation.
Swiss (the airline), for example does that.
It says local and foreign debit cards are free, but Danish credit cards cost 0.9375% extra and foreign ones 1.75% extra. Maybe the rule only applies in the Eurozone?
Here in Italy for example there is a lot of discussion around this topic now that most stores are legally bound to accept digital payments but cannot charge a different price if you pay with card instead of cash.
Probably the supermarkets will switch to only accept Mastercard Debit/Visa Debit.
[1]: https://www.mastercard.com/content/dam/public/mastercardcom/...
Yes, it is usually not allowed in your contract with the card payment providers. If you start doing it anyway - as some do - you risk them terminating the contract.
From a UX perspective today, it will always be more cumbersome to initiate a SEPA transfer to the merchant. Some integrations offer a semblance of interactivity with your banking app in an attempt to streamline it, but nothing beats the simplicity entering your cards details or just showing your face to Apple pay. Then from a consumer protection perspective, if something wrong happen with your order or the merchant goes bust, you have no recourse if you initiated a SEPA CT. Card payments on the other hand give you a nice chain of large entities exposing themselves to the merchant's credit risk in front of you.
It can probably work in specific situations (e.g. if you have a niche website with a sophisticated audience ready to overcome the hurdles to acquire your widgets), but for these reasons alone I just can't see SEPA payments going anywhere near even a ridicule fraction of the market share held by legacy card networks yet.
Charging a fee is not allowed, but giving discounts for specific payment methods are AFAIK.
I hate trying to remember my cc number, expiration date, and CVS... And then doing that exact same thing above.
1. Click "Pay with Mobilepay"
2. Enter phone number, or confirm it if if the merchant already knows this
3. Press notification on phone, fingerprint, and swipe right to approve.
I'm not sure how this appears to the business, but to me it looks like any other payment or transfer on my bank statement.
On the other hand, for SEPA Direct Debit, not only is the interface quite reasonable (you enter your IBAN and confirm a mandate), but consumer protection is very high. You can chargeback no questions asked for 8 weeks, it will be immediately accepted and the merchant can't do anything about it. And as a customer, besides the 8 weeks no questions asked policy, you have 13 months to ask for a refund of an unauthorised transaction, with supporting evidence. In practice, the bank will always accept such a request too.
Ethereum solves this, just use stablecoins
Aside from this, most local payments happen over UPI so they cost 0 as well.
Visa and mastercard usage is declining in India since a few years despite rapid increase in digital adoption. Government banned master card, diners, express, etc issuance for not complying with local data storage rules for over a year and it did not impact much.
I think the solution is to run payment infrastructure at public level like many countries have done in Asia.
Thanks for sharing!
This is absurd. A 1% fee to transfer USD to a USD bank account?
The alternative is to charge in another currency - which Stripe will put a 2% currency fee on.
This is already on top of their expensive transaction costs.
Will actively look for alternatives now.
People from Stripe will probably appear in this discussion any moment now. It’ll be interesting seeing them try to explain this one.
For non-us citizens, USD's either incur a conversation fee to another currency, or an international withdrawal fee. There is no way to get money out without paying one or other fee.
Coincidentally they added the 3% withdrawal fee soon after Wise became a popular bank account option. PayPal was a great choice until then!
So you can open an USD card on wise and withdraw there?
But they probably have a limit? If yes, there's no workaround?
Maybe if I ever have to implement PayPal again I’ll test it out :)
Say you want to buy product in USD, and you come from non-USA country. Paypal would "helpfully" convert USD to your local currency using their own exchange rate (worse than any other one - goes without saying), charge the linked bank account (which probably is in USD anyway, to avoid paying for conversion fees), then the local bank would charge you again by converting the payment from the local currency to say USD because the account is in USD. Those practices probably cost me thousands over the years until I've figured out what was happening.
I've turned on the option (intentionally buried and difficult to find) that tells Paypal to charge me in the currency I've was purchasing (USD), and not to do the conversion. But the fuckers had a habit of flipping that option so you're caught off guard. Needless to say, been Paypal-free for years now. One can imagine how much Paypal and banks profit from this scammy/dark-pattern behaviour on a global scale.
It’s the crossborder settlement which they charge for, which I don’t think is crazy, as it just reflects the underlying costs Stripe must be incurring themselves.
As someone who ran a business in multiple countries, the bank always charged similar fees for these transfers between accounts. Stripe letting me settle directly in the account where I want the money to land, rather than me having to log in to my bank and initiating a transfer manually where fees are ~the same is definitely a better option, which I’m happy they offer.
They are clearly losing money on their (really expensive) forex fees so are trying to recoup this by this payment.
There is no intrinsic reason I see why the fees are so high for this.
Edit to add: they actually use ACH for US bank USD payouts, so even less cost than SWIFT.
I also just looked it up how much this costs with my bank, and it's a minimum fee of $25 + agent/intermediary bank fees on top of it, for amounts less than $5,0000.
I assume that Stripe can negotiate better rates though, but for the sake of simple pricing, and cost-averaging over different amounts (which are, given that they serve the long tail, likely heavy weighted on smaller amounts), it is not inconceivable that this 1% is closer to cost than one might imagine.
The 1% is for all non local currency payouts. Example: "The primary currency for Stripe accounts in France is EUR. All other currencies fall under alternative currencies." "1% Of the payout amount, when you choose to payout in select alternative currencies." Ref https://stripe.com/docs/payouts/alternative-currencies So basically this will result in very expensive payouts for anyone doing USD charges outside US or EUR charges outside Europe. Like many SaaS companies are. Charging any other currency is problematic for many customers so it is not really an option. Like I don't want to be charged in pesos for a SaaS that I am using.
The alternative is to have Stripe convert USD to my local currency. For a small 2% fee.
I was excited to ditch the 2% currency conversion fee - nope, just reduced to 1%. For what? A currency conversion fee can be somewhat defended, or, at the very least, “everyone else does it”...
Now I want my funds in the same currency you accepted them, and I have to pay for the privilege?
Can someone from the industry offer more colour on what this actually means?
It strikes me that pricing for companies like Stripe should go down, not up in the long run. They're fairly well insulated from inflation (as pricing is % of transaction value), so the only reason I can think of for price _increases_ would be increased regulatory burden or some sort of structural industry change.
The vagueness with which Stripe justifies the price increase makes me think this is not supported by actual cost increases, but by a desire to increase profits. (which, hey, if you can put prices up and customers won't leave, then great - but it would be good to know the actual reason)
It's not a terrible deal even at this level. We routinely see 4-5% creamed off the top of wire transfers we receive from the US through exchange rate variations, random bank fees, etc. It's the cost of doing global business for us.
Hmm, I'm in the UK, and the variance in currerncy exchange we see is usually 2.4% in the bank's favour, usually with an additional fixed fee of £20. 5% sounds like madness!
For EU bank transfers, it's more like a 2% exchange variance, with zero fixed fee... so Stripe is now looking expensive, at least for our UK and EU payments :(
I'm including variance from HMRC's published rates as well, so that can be a few percent on its own if the USDGBP shifted. We do find that some customers are worse than others though. I suspect some use local banks and are eating fees along the route and it all adds up. With some customers we get every single penny expected. Wire transfers seem to be quite messy and unpredictable compared to card payments.
And what's this new nonsense about increased costs for "premium" cards?
From here[0], it describes these cards as "Commercial, corporate, or business cards issued by Visa and Mastercard" - but why would Stripe charge more for the use of such cards? Surely the chargeback rate for businesses must be orders of magnitude lower than that of consumer cards?
https://support.stripe.com/questions/what-s-the-difference-b...
Processing a "Visa Infinite Business Credit" @ 1.5% would lose them money.
Commercial card fees are not capped and are more around 1.5% to 2.0%
If anything, now that they have split consumer and commercial cards in their fees, it's the consumer card fees that are shockingly high.
MasterCard and Visa are mostly to blame here. They haven't innovated at all in the past 30 years and the fees they charge are wildly out of balance with the service they provide. They're awful, and I can't wait to see these credit card companies crash and burn when they get some real competition.
So if we get paid out a USD payment, into a USD account. We get charged just because we're registered in the UK? That's a huge impact on our business.
If you have a bank account in another currency, you’ll be charged a 2% currency conversion fee from USD to your currency.
https://stripe.com/docs/payouts/alternative-currencies
Here in Australia we’re charged the 1% fee for USD payouts even though the account is with a local bank.
FWIW one of these was readily available from my existing bank (Barclays) last time I needed one (~10yrs ago). Bit of hoop-jumping to go through, but definitely worth it for $30k/year.
Stripe is comparable expensive (1.5% fee) compared to what big companies pay (0.1%) handling payments. Customers do believe that there is NO FEE at all for payments, they believe they just get back their money. I am handling payments of 0.99 Euros..that has become impossible with STRIPE now, if there is a risk of paying back 20 Euros dispute fee.
And the number of our PayPal-paying customers keeps growing. For some mysterious reasons it is convenient for people in very remote parts of the world to use PayPal. Direct credit card payment gateway and wire transfers are significantly more difficult for them.
So CCs are a lot less common. Bank cards (debit) are a lot more common. But (and feel free to correct me on this) I think their fraud handling story is still not as good as the story on credit cards.
So PayPal is seen as not-debt and also provides more fraud protection. And somehow despite their absurdly bad rap elsewhere, people look favorably upon the PayPal brand. And so here we are.
Fee $310.80
> Application fees: $180.00
> Stripe processing fees:$130.80
Some on this forum may even say it's great that the APIs provided enable someone to build this additional payment app on top of Stripe that makes it easier for you to take payment in exchange for a 180 / 4500 = 4% cut. However maybe you should look into lower cost payment methods if possible.
That is still legal. Customers do not like it of course to see different prices. But hey, thats how you have to teach them.
Paypal is better in disputes..but its also more expensive (for me).
The good thing is: In the future I do not have to care about disputes on stripe, I can just upload a paper saying "fuck you all"..I loose my money anyway.
I recently saw someone mention this on reddit asking for legal advice but didn’t find anyone here talking about it and the original post seems to be gone but they linked to this post https://support.stripe.com/questions/argentina-s-new-inbound...
Note: I have no affiliation with any PSP.
In other words, if it costs 10 units on average to process a transaction then the payment service isn't going to be worthwhile for any transaction less than 200 units. All transactions much higher than 200 units would see a reducing percentage of the transaction as processing costs.
Instead, everyone gets charged a percentage of the transaction value so that the large transactions subsidise those with a low value and this enables small value transactions to be seen as cost-effective by sellers.
> Standard EU cards: 1.5% + €0.25 per transaction > Premium EU card: 1.9% + €0.25 per transaction
That sounds completely backwards. They chose to have premium cards, not me.
The scariest part of this pricing split is that Stripe seems to be determining the fee "based on the information available from card networks at point of capture", instead of being directly told what the card type is, and even allude to this determination being potentially incorrect.
This gets even more frustrating when you think that business spend is on average higher than personal/consumer spend, so charging a higher fee for this is just a triple whammy.
It's easy to crucify Stripe for this, but this is probably a product of a cost review they're undertaking as part of IPO/next round prep (if The Information is anything to go by). We need a new Visa/Mastercard.
[0] https://support.stripe.com/questions/what-s-the-difference-b...
> Commercial, corporate, or business cards issued by Visa and Mastercard
The reason is that in 2015 the EU capped interbank fees to 0.2% for debit cards and 0.3% for credit cards. Visa and Mastercard (and issuing banks) managed to carve out an exemption for payment cards that are issued to businesses. These cards do have much higher fees. I'm actually surprised that Stripe has refrained so far from charging more for business cards.
I understand that different networks have different fees. But I expect one type of card to cost me the same.
When you go to a store, you pay the same price, regardless of which card you have. What would be your reaction if you were charged more because you're using a specific type of card?
I can't ask my customers to foot the bill, so it's effectively 0.4% I lose.
The alternative has always been to use multiple gateways.
Once, they were young and innovative. Now they just do bad collaborations (Amazon) and release turds. The places which once promoted them are now doing the opposite.
A lot of people will still go to see Coldplay.
One should have at least 3 alternatives and load-balance evenly (or using another strategy depending on fee structures).
This is probably the most annoying change. Raising the fees to push their card-storing solution.
It's clear that the card networks are committed to their higher fees. As a result, we’ve invested in lower cost options. That doesn't have to be Link (although it has tangible benefits), as there are cheaper non-card payment methods:
• Bank transfers (0.5% per transaction, capped at €5.00)
• SEPA Direct Debit (€0.35 per transaction)
• Bacs Direct Debit (1% starting at 20p, capped at £2)
Make something good. Dominate the market. Increase economic pressure.
Only 1 way for to counter: Leave and let others know what you're using instead, and why.
Gets grouped with EU decisions anyway.