Given that 3DSecure is required for all European cards we should have been seeing lower fees since that requirement. Instead fees are going up.
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.
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.