We're getting rid of the $0.25 transfer fee and replacing it with 0.5% of funds paid out to managed accounts. We do more work (and incur more cost) if you're using managed accounts, so we think it makes sense.
Why scale the fee?
Does this apply to marketplaces/accounts migrating from Balanced? There was an assurance that Stripe would honor Balanced's pricing. https://www.balancedpayments.com/stripe/faq#will-our-pricing...
If you require marketplaces to use managed accounts then it's an extra tax, no?
We want our pricing to align with the best product experience, and a flat fee would encourage marketplaces to pay out less frequently. This pricing makes it easy to do daily transfers. In addition, there are actually reporting obligations and such that kick in at higher volumes, so it's not completely scale-independent.
> Does this apply to marketplaces/accounts migrating from Balanced? There was an assurance that Stripe would honor Balanced's pricing. https://www.balancedpayments.com/stripe/faq#will-our-pricing....
No; we'll grandfather both Stripe Transfers API (the old system) users and Balanced users. That said, this works out to be cheaper for most people -- most users aren't doing $100k payouts.
> If you require marketplaces to use managed accounts then it's an extra tax, no?
We don't require that they use managed accounts. Over time, I think standalone accounts will become the better option, since it's much less work for the marketplace.
If we were to use Stripe managed accounts we would start bearing all transaction risk plus a 0.5% fee. As a result our payout frequency would decrease drastically as we'd implement a huge delay, only paying out once we were positive the transaction was risk free.
Is Stripe's preference for platforms to continue to use standalone accounts vs managed account long term? We have a strong affinity to Stripe as a fellow YC company, but struggle with this offering.
More generally, international KYC and compliant payments are quite hard, and our pricing there is very competitive. Domestically we saw that many companies were already paying similar rates on our fixed-fee pricing, so we weren't actually hurting customers in the US (on the contrary, we were encouraging more frequent payouts for the same rate, which would help everyone by making a more efficient system). We felt that the benefits of consistent pricing were worth it here.
Re standalone vs. managed accounts: our preference is that we make standalone accounts such a great and easy-to-use experience that everybody starts using them, because dealing with things like information collection and tax reporting is annoying. However, we're letting our customers dictate that. If managed accounts become immensely popular, it means we haven't made standalone accounts easy enough to use, or we've made an incorrect assumption about the world (likely a combination of both). Regardless, we intend to support managed accounts for a very long time, and have already had them around in some less-built-out form for quite a while.
I don't understand how increasing pricing from a flat fee to a percentage encourages marketplaces to pay out less frequently. The cost is so nominal that it far outweighs any percentage fee.
> We don't require that they use managed accounts. Over time, I think standalone accounts will become the better option
Better for whom? [edit] My customers are not tech savvy and only want to deal with one fintech vendor, exposing Stripe to my customers seems like it's Stripe's best interest.
Our goal, as Patrick said, is to allow people to pay out more frequently. A flat fee ties your costs to number of transfers, which seems unnecessary in a lot of cases. If a seller just earned $10, they should get their $10 (at a cost of a nickel).
> Better for whom?
For customers and platforms. If we do our job right, standalone accounts should be so easy to use and user-friendly, even for non-tech-savvy customers, that it's clearly the better option for everyone.
That being said, it's not like we'll kill off managed accounts: there'll always be a good reason to have a fully customized experience. Making standalone accounts good enough to be the better option more often is a goal we strive for, but that's for our customers to decide.