Stripe increases fees for EU and UK-based businesses in April

https://support.stripe.com/questions/april-2023-pricing-updates-for-businesses-based-in-europe

170 237 3 years ago

support.stripe.com

01acheru5• 3 years ago

Something needs to change in the digital payments sector. 1.5% is ok-ish but 3.25% to accept foreign cards in the EU is a lot of money!

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.

pifm_guy2• 3 years ago

It's the chicken and egg problem... If you started a new card provider today, you'd need to get consumers onboard, banks onboard, merchants onboard, and every card machine in the world replaced to accept your new card type.

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.

01acheru5• 3 years ago

I totally understand you and you are perfectly right IMHO. This is why I don't understand why isn't there a payment standard, we are in 2023 already, the economic burden of keeping fattening those "old-school" card networks is absurd, it is billions and billions of dollars each year.

Lobbying is the only reason I see that keeps a payment standard from being implemented.

account423• 3 years ago

If the EU were interested in doing something about this they wouldn't have that problem at all - they could simply mandate interopability.

neodypsis3• 3 years ago

What you're describing is called "network effect": https://en.wikipedia.org/wiki/Network_effect#Credit_cards

lotsofpulp3• 3 years ago

SEPA in EU is already something but it is taking ages for it to become an actual payment platform in everyday's life.

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.

extraduder_ire• 3 years ago

Is there anything stopping merchants from offering different prices to people based on different payment methods?

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.

orangepanda• 3 years ago

Traders in the EU are not allowed to charge you extra for using your credit or debit card.

https://europa.eu/youreurope/citizens/consumers/shopping/pri...

01acheru5• 3 years ago

In some countries it is illegal to charge different prices based on which payment method is used.

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.

wewxjfq• 3 years ago

It's called surcharging and it's not allowed in the EU.

reacharavindh• 3 years ago

I think this indirectly happens. I live in Haarlem, Netherlands, and some popular supermarkets in my area would not accept a VISA/Mastercard. They only accept Maestro(Which I think is cheaper for them because it is a debit card that Dutch banks give out). I found it surprising because that should mean they lose out on some business from so many expats that visit/live in Netherlands, but apparently not.

carlosjobim7• 3 years ago

Is there anything stopping merchants from offering different prices to people based on different payment methods?

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.

superzamp• 3 years ago

The problem with SEPA payment, is that it's great for the merchant and a net loss for the user, especially individual consumers.

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.

disruptiveink• 3 years ago

This. I would never do a SEPA payment vs a credit card transaction unless there's a significant advantage to me as a user to go with SEPA. And the merchant can't give me a discount for using a specific payment which is not allowed under EU rules, so there's not much the merchant can do there.

Ekaros2• 3 years ago

In Finland with my fairly large bank the barrier is pretty much same if the card isn't already saved. Actually SEPA is easier as I only need to log in and confirm instead of having to provide CC details and log in to confirm the transfer.

ThePhysicist• 3 years ago

SEPA Direct Debit has pretty good UX, I find. Just enter the bank account number, accept terms, done. In theory it's a bit more complicated as for B2C you're supposed to collect a real signature (which no one does) and for B2B there are additional rules (which most merchants also ignore), but in practice it works reasonably well. B2B SEPA direct debit is also much better for the merchant as money that has been successfully transferred cannot be refunded, unlike credit card payments where you can get chargebacks for 120 days...

Symbiote2• 3 years ago

If it's offered, I pay with the Danish Mobilepay app. The flow is:

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.

cataflam2• 3 years ago

There are multiple types of SEPA payments, I think you're talking about SEPA Credit Transfer (essentially making the bank transfer yourself).

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.

account423• 3 years ago

One funny thing is that some card transactions (e.g. contactless payments without PIN entry over 100€ for at least one payment processor, needs to be enabled by the merchant) actually don't go trough Visa/Mastercard but are already done via SEPA.

hanniabu• 3 years ago

Something needs to change in the digital payments sector

Ethereum solves this, just use stablecoins

searchableguy• 3 years ago

India built rupay, an alternative to visa and mastercard which has 0 charge to merchants. It is expanding internationally and works in neighboring countries.

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.

01acheru5• 3 years ago

This is exactly what I mean and what I would like to see in the EU. I think the digital Euro is meant to be something similar but it is still vaporware ATM.

Thanks for sharing!

ptman• 3 years ago

https://www.epicompany.eu/

https://nordicpayments.eu/

sleepyhead7• 3 years ago

"Businesses in the EEA who are paying out in USD to a US-domiciled bank account will now incur a 1% fee, with a minimum fee of US$2.50 per payout."

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.

stevoski• 3 years ago

Yeah, this one is a bit over the top. 1% fee for USD to USD transfer.

People from Stripe will probably appear in this discussion any moment now. It’ll be interesting seeing them try to explain this one.

likeabbas• 3 years ago

I’m sure someone has already posted the thread in a slack channel

GordonS6• 3 years ago

I might be wrong, but I've a sneaking suspicion that we're not going to see the usual suspects from Stripe chiming in this time...

pifm_guy2• 3 years ago

PayPal does the same...

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.

ddorian433• 3 years ago

Can't find this on fees page https://www.paypal.com/al/webapps/mpp/merchant-fees. Which detail is it?

jq-r• 3 years ago

Took me years to find out how they're scamming me on the conversion charges/exchange rate.

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.

pjan5• 3 years ago

As far as I understand, you can payout in USD on a EEA domiciled account, and you won’t be incurring any fees.

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.

martinald• 3 years ago

1% is enormous for this. I think the cost of a SWIFT transfer is maybe $3 to them, regardless of amount. If you're doing $100k/month of USD sales and payout once a week, it is a huge markup.

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.

sleepyhead7• 3 years ago

This was previously not possible but looks like they have allowed it now. That is the reason why I had a US USD account in the first place, for Stripe USD payouts. They did not allow USD payouts to any European accounts last time I checked a few years ago, only to US accounts.

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.

tallytarik5• 3 years ago

This has also been the case in Australia since Stripe added the ability to pay out to a USD account last year.

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?

02thoeva4• 3 years ago

Same here. This is a massive dent in any of our remaining profit. Realistically we'll need to look to leave

capableweb9• 3 years ago

Some European alternatives you might be able to find/negotiate better fees with:

- 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?

sleepyhead7• 3 years ago

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

Raed667• 3 years ago

How can a user dispute a transaction if they used 3DSecure?

capableweb9• 3 years ago

Also, as far as I can understand https://stripe.com/docs/disputes/how-disputes-work, Stripe doesn't actually do anything manual in the process, it's all handled by the users bank or automatically by Stripe (notifications, taking fees and so on). So how it got more expensive for Stripe?

amelius3• 3 years ago

Aren't there open source libraries available that abstract away the payment processor?

carlosjobim7• 3 years ago

No, they have to be with to a payment processor. But you can get a better deal than Stripe if you have a business mid-size and up. You can program that connection yourself, but honestly, if you are able to pull it off you will start selling that solution for a suitable price and that's where we are at today. And I think that is good.

pjc502• 3 years ago

The processor saves you significant effort for card transactions by simplifying your merchant relationship with the card processor. Technically, you can just talk directly to them over their API: https://developer.mastercard.com/apis

makeitdouble3• 3 years ago

You'd still need certifications to handle the info, and negociate with each issuer to get access.

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.

mytailorisrich6• 3 years ago

What's the impact of not disputing chargebacks?

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!

capableweb9• 3 years ago

The fee gets taken regardless. Also, too many disputes (guessing overturned disputes are calculated differently than uphold ones) can lead to further fines:

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.

https://stripe.com/docs/disputes/measuring

smca7• 3 years ago

If you exceed dispute thresholds dictated by card networks, they can place you in a "dispute monitoring program".

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

sluongng• 3 years ago

It would be nice if some services like Github Sponsor or Substack or Hashnode would allow different providers integration. Right now, Stripe dominates the market still.

olau• 3 years ago

Now that you mention a Danish one, Quickpay (Denmark) has been around for a long time.

capableweb9• 3 years ago

Thanks, added that one to the list as well :)

LatteLazy• 3 years ago

Devils advocate: is dis-incentivises businesses that causes a lot of charge back requests even if those requests are ultimately unsuccessful.

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.

makeitdouble3• 3 years ago

Adyen is relatively solid if you know what you're doing, Mangopay felt like a small hippie solution in comparison.

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.

quelltext2• 3 years ago

Doesn't Adyen only take on established companies? You cannot just sign up and get started.

sleepyhead7• 3 years ago

Can you share some details on the hippies and too small situations with Mangopay?

TheCapeGreek• 3 years ago

Mangopay IME was a huge PITA for the last few years. Only in the last year with management change have they actually started to give a damn.

pjan5• 3 years ago

Ideally, you'll support at least two providers you can switch between, if you can afford the development of supporting two

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.

nik736• 3 years ago

Do you have any suggestion for "card vaulting providers"? This is interesting actually, store cards without PCI-DSS obligations and use those cards with the payment provider that makes the most sense at that point in time.

tzs• 3 years ago

Even with a card vaulting solution I think it may be difficult to support more than one provider, at least for Visa and MasterCard, due to Visa's Stored Credentials Framework (SCF). SCF was a set of requirements for using stored cards that Visa originally announced would be required starting sometime around 2017, and MasterCard said they would adopt it too.

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.

gggggg56• 3 years ago

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?

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.

dachryn• 3 years ago

good luck actually getting that money.

What are you going to do, sue over 20 euro?

sleepyhead7• 3 years ago

Yeah that is not even remotely legal in any country with decent consumer protection.

joering2• 3 years ago

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 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.

traceroute66• 3 years ago

- Klarna (Sweden)

Erm, isn't Klarna a BNPL company ?

Important not to conflate BNPL with merchant services (card payments).

Hamuko• 3 years ago

I'm pretty sure I've bought stuff from online retailers using some kind of a Klarna widget and I just used my credit card directly.

Actually, I can find several emails that say something along the lines of "Klarna - Card payment" or "Klarna Checkout". Never done BNPL.

BillinghamJ• 3 years ago

Klarna operates more payment services than just the BNPL credit option

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

anovikov• 3 years ago

Names of the last 2 and maybe 3 sound very Russian to me. Are they just registered there, but really these are Russian own businesses?

rafram2• 3 years ago

What does “sound very Russian” even mean?

MagnumOpus• 3 years ago

No they are not, and 20 seconds of googling will show it. Why are you pushing the FUD?

mardifoufs• 3 years ago

That's almost "1950s red scare" level of paranoia

marcopicentini2• 3 years ago

If a customer has already entered its credit card through Stripe for a recurring subscription, how do you migrate to another provider without asking again credit card?

Stripe locked us in.

rafram2• 3 years ago

I’m not sure the intention is to lock you in. Giving businesses access to full credit card numbers does nothing but enable and encourage bad behavior.

xyzzy_plugh• 3 years ago

What's the alternative? You want to do your own PCI compliance?

You're not locked in. People migrate off Stripe all the time.

captn3m0• 3 years ago

Stripe offers PAN data export https://stripe.com/docs/account/data-migrations/pan-export

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.

capableweb9• 3 years ago

Stripe locked us in.

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...

sschueller• 3 years ago

For Switzerland I can recommend https://www.payrexx.com/ . They also support Twint directly without extra contracts.

jasonlotito• 3 years ago

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?

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.

Silhouette3• 3 years ago

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.

jsumrall• 3 years ago

Buckaroo (Netherlands) is also an option if you’re fine with so-so documentation of the API.

fatfox• 3 years ago

Also worth checking out Braintree (PayPal). It's not the worst dev experience.

capableweb9• 3 years ago

As the notice from Stripe is about Stripe customers in Europe, I thought the alternative list should be focused on European alternatives.

SSLy• 3 years ago

For Poland, Przelewy24 or direct BLIK integration might be an option.

Aeolun5• 3 years ago

This strikes me as weird.

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.

BonoboIO• 3 years ago

The endless cycle :D

brianwawok2• 3 years ago

Except you will lose every chargeback. Despite evidence including IP logs and screenshots.

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.

miroljub• 3 years ago

None of these services is Merchant of Record (that handles taxes). Neither is Stripe.

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.

0xDEF2• 3 years ago

What are some Stripe alternatives that provide Merchant of Record?

bodomalo10• 3 years ago

I doubt any of those payment providers mentioned does not take the chargeback fee on a credit-card dispute.

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.

japanman425• 3 years ago

Leaves the EU and have more financial independence and to negotiate own deals

Gets grouped with EU decisions anyway.

okokwhatever• 3 years ago

Here we go. Stripe going down the way ↘

rvz• 3 years ago

Did HNers here not realize that Stripe is slowly becoming like PayPal, given the customer support stories of random locked funds and accounts for months?

The alternative has always been to use multiple gateways.

ilikerashers• 3 years ago

I see them as being like the HackerNews Coldplay.

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.

neodypsis3• 3 years ago

The alternative has always been to use multiple gateways.

One should have at least 3 alternatives and load-balance evenly (or using another strategy depending on fee structures).

mytailorisrich6• 3 years ago

This after the news that they were looking for funding to pay tax bills... This does not smell good.

maest• 3 years ago

payouts will be higher due to increases in network costs (in recent years, major card networks have introduced several new fees and increased existing fees), as well as increases in underlying service costs.

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)

pjan5• 3 years ago

Banks starting to charge more for (crossborder) transfer, Visa/MC charge more for tokenized card payments, which they mandate adoption of, and most likely more of this.

02thoeva4• 3 years ago

"UK businesses who are paying out in USD to a US-domiciled bank account will now incur a 1% fee, with a minimum fee of US$2.50."

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.

pjc502• 3 years ago

Presumably you've got a UK bank account, so you can just use that and take on the currency risk and transaction fees of Wise or similar?

tallytarik5• 3 years ago

If you have a USD-denominated bank account, based in UK or elsewhere, you’ll be hit with the 1% fee.

If you have a bank account in another currency, you’ll be charged a 2% currency conversion fee from USD to your currency.

02thoeva4• 3 years ago

We use Wise but their USD accounts are US-domiciled. So we have 3 options: - Continue paying out to Wise and incur an additional 1% fee (~$30k per year) - Use Stripe for currency conversion which is additional 2% fee (~$60k per year - Find a UK-domiciled USD account to pay out to. Might be possible - no idea really. Need to look into it.

petercooper2• 3 years ago

At first I thought, "well, inflation is affecting everyone." Then I realized if prices are going up due to inflation, Stripe's collected fees go up anyway. So now they're benefitting to the second degree with a higher percentage of already inflating revenues ;-) We'll put up our prices more to counteract it, and on it goes.

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.

GordonS6• 3 years ago

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.

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 :(

petercooper2• 3 years ago

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!

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.

benevol• 3 years ago

It's the usual "bait-and-switch" strategy, isn't it.

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.

GordonS6• 3 years ago

Yikes, these are substantial prices hikes!

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...

lmz3• 3 years ago

Straight from the card networks e.g. https://www.visa.co.uk/dam/VCOM/regional/ve/unitedkingdom/PD...

Processing a "Visa Infinite Business Credit" @ 1.5% would lose them money.

iam-TJ2• 3 years ago

Isn't it the case that these 'premium' cards usually require full balance settlement each month? In which case there is no opportunity for the card issuer to earn interest on outstanding balances as there is with personal credit cards so the card issuers add the 'lost' income to the transaction fee?

GordonS6• 3 years ago

Yes, but isn't it also the case that companies pay a monthly fee for those cards, offsetting against that?

jonp888• 3 years ago

Processing rates for Consumer cards are capped by law in the EU(and probably still in the UK).

cataflam2• 3 years ago

Consumer card fees are capped pretty low in EU (and still UK I guess), something like 0.30%.

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.

GordonS6• 3 years ago

This is the knowledge I was missing - I had assumed fees were capped across the board.

marcopicentini2• 3 years ago

I don’t understand why fees are in percentage and not fixed. Transferring 100$ is not 10 times more expensive for them than moving 10$.

freilanzer• 3 years ago

More money.

neodypsis3• 3 years ago

One reason that may influence the price is fraud management.

iam-TJ2• 3 years ago

Possibly because the actual all-in cost including fraud set-aside is quite high and if a fixed fee were charged it would in many cases exceed the transaction value?

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.

remus• 3 years ago

Risk of fraud. Moving the money is not expensive, but if a $10k transaction turns out to be fraudulent then you're on the line for a big chunk of money. If you know your fraud rate is ~1%, then if you charge 1.5% on all transactions then over enough transactions you can cover the fraudulent ones and have some profit left over.

gizmo• 3 years ago

3.25% for USD card for EU business + 0.5% for stripe tax + 0.4% for invoice + 0.5% for stripe checkout. It really adds up!

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.

_5uxp• 3 years ago

MasterCard and Visa as long as keep their moat, they don't need to innovate. Big companies like that will not innovate enough to make fees low. Yearly operating expenses of VISA as a company is nearly $10B with a net income of almost $15B. Not hard to make the math how fees just make the income and moat bigger.

tehwebguy• 3 years ago

Has anyone else heard of like a year worth of retroactive Argentina’s exchange rate corrections happening to Stripe users?

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...

blackhaz2• 3 years ago

This ain't as bad as international PayPal... We (EU company) have clients paying from abroad via PayPal. I can't figure out what to do with this. We're being hit with 4.7% PayPal international fee, then ~ 3.75% fee to convert USD to our local currency to withdraw to our bank account. (PayPal won't let us withdraw USD.) Then another 2-3% to convert it back to USD in our bank to pay our supplier in USD. Imagine the total.

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.

atomicnumber3• 3 years ago

I think the crux of it is that in many places in the world, credit cards are seen less like "temporary float" (like they are in the US) and more like "you pay for everything with a short term loan"?

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.

addandsubtract• 3 years ago

Have you thought about charging customers in Euro? Anytime I (an EU citizen) buy something from a US company, I'm charged in USD and have to cover the conversion fee. So why not do the same?

blackhaz2• 3 years ago

The point is, we're in the Czech Republic, so charging in Crowns is not an option. And we wouldn't be able to get Euro out of PayPal anyways, only Crowns.

ddorian433• 3 years ago

What about opening a Wise account and transferring from Paypal to there?

wstrange• 3 years ago

Paypal will not let you add Wise online (at least in my case - Canada), but I called and talked to an agent and they were able to add Wise as a bank.

omnimus• 3 years ago

Paypal won't allow you to add account in different currency than main currency of country you are based at. So if you are based in Switzerland they allow you to use Swiss franc account only. And they will insist on them making the conversion - they won't pay out USD or EUR.

lycopodiopsida• 3 years ago

I do not like paypal(very shady business) but still use it as a proxy - I do not trust my CC data to some small merchant on the internet. PayPal just books directly from my bank account. I am not sure, however, if it adds some security.

deskpro2• 3 years ago

In the UK at least, you can get Paypal to add a US domiciled bank account (on ACH) and pay out that way to avoid this problem; we had to go via support to get that setup. We already had a US bank account (with HSBC) to avoid Stripe's forex charges but it was complicated to setup. A decent alternative is Wise's option; although HSBC have something called HSBC Global Wallet now which would have simplified things a lot.

tiffanyh• 3 years ago

FYI - Adyen has a cost plus pricing model, which many people appreciate.

Note: I have no affiliation with any PSP.

thesimon4• 3 years ago

Link, Stripe’s one-click checkout experience, can be used to process all domestic cards for 1.2% + €0.25 per transaction (or your local equivalent).

This is probably the most annoying change. Raising the fees to push their card-storing solution.

smca7• 3 years ago

We're able to offer lower card pricing with Link because it has much higher conversion rates (7% for logged-in Link customers, 2% overall).

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)

oldstrangers2• 3 years ago

Stripe takes like $200 from me on every payment for my little side project. Tiny one man business, seems really absurd to me.

cinericius• 3 years ago

What's the ballpark figure for the payments for this side project? $200 seems extreme unless your side project is charging $10,000~ per payment.

oldstrangers2• 3 years ago

Amount $4,500.00

Fee $310.80

Application fees: $180.00
Stripe processing fees:$130.80

aspyct2• 3 years ago

Oh, so I'm going to pay more for customers who have "premium cards"?

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.

rubynerd• 3 years ago

Looking at the definition of "premium cards"[0] they're actually business/commercial/corporate cards, not premium consumer cards. A horrendous term that's bound to cause confusion.

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...

MilaM• 3 years ago

This is not about actual premium cards. Premium cards are defined by Stripe as:

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.

aspyct2• 3 years ago

It's still wrong that I would pay extra for those 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.

WesolyKubeczek• 3 years ago

It would be bloody nice if the PaymentMethod object included a flag telling if Stripe thinks a card is premium or not.

40acres• 3 years ago

Stripe has announced recent enterprise wins (Amazon, BMW) but these are negotiated deals with less margin. Seems like as they increase their share of enterprise they are simultaneously turning the screw on SMBs and start ups.

agilob• 3 years ago

A week after Stripe and Amazon sign cooperation agreement.

robertpohl• 3 years ago

For the nordics, I highly recommend Mondido, https://mondido.com

bodomalo10• 3 years ago

Stripe has the worst DISPUTE Handling on the market. Compared to PAYPAL they simply offer "nothing". They do not help in the communication with the buyer, so the buy has no other option than to start a dispute with the bank. In 15 years I never had one BANK-CHARGEBACK with Paypal - simply because Paypal has installed a communication system between BUYER and SELLER. Stripe not. On Paypal I can work it out with the customer every time, or Paypal will say: "We send back that money", or tells the custome "you got the goods, you loose"

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.

bodomalo10• 3 years ago

Simple. Add a 5 Cent Payment fee to every STRIPE Payment.

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.

Stripe increases fees for EU and UK-based businesses in April

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