[HN Gopher] Stripe increases price for business in the European ...
___________________________________________________________________
Stripe increases price for business in the European Economic Area
Author : mike97
Score : 171 points
Date : 2023-02-07 10:16 UTC (12 hours ago)
(HTM) web link (support.stripe.com)
(TXT) w3m dump (support.stripe.com)
| metacritic12 wrote:
| Preparing for an IPO, I see.
| throwaway67743 wrote:
| It says something when traditional banks are basically the same
| price now and are almost as good in features (and many other card
| processors are cheaper, especially if eg you stick to a processor
| in the EU for EU cards) - I'm not sure why anyone would pick
| Stripe anymore, especially as they have just as many "hidden"
| costs as others (eg fraud stuff)
| pancrufty wrote:
| Having seen many of these systems myself, I doubt they're
| "almost as good in features."
|
| My European bank (one of the largest in my country) doesn't
| accept passwords longer than 8 characters. Imagine how bad the
| rest of the systems is.
| candiodari wrote:
| If you're working with COBOL records then changing the number
| of characters of any field, or adding or removing a field is
| pretty much impossible.
|
| Which leads to funny questions at development time like "how
| many characters do we reserve in the customer record for the
| third child of the second wife of customer X, when they're
| remarried, this third child is not a child of the customer
| but there does exist an alimentation 'agreement' between the
| customer and their third wife". You must make this decision
| knowing that whatever your answer ... it can _never_ be
| changed again.
|
| >500kb per record. And, of course, mostly it just has first
| and last name, address, birthdate and balance, nothing else.
|
| Makes the web look efficient.
| 01acheru wrote:
| Well... yeah, but no one on their sane mind would build the
| backend of a mobile app or of a web app in COBOL.
|
| Of course you can have all your COBOL and your mainframes
| down below rolling and churning like it's 1975, but the
| authentication of an app is layers up above in a totally
| distinct system. Or this or you're crazy.
| bryanrasmussen wrote:
| is one of the features that they're as easy to set up?
|
| on edit: actually serious question, have been away from this
| area for a while but thinking about making a personal project
| soon.
| throwaway67743 wrote:
| For quite a while they've been trying to emulate fintech
| style ease, and to some degree they have made it (although
| most still insist on their own hosted gateways, which is fine
| as SAQ D compliance is a real chore) - they do things like
| OOB webhooks etc, like Stripe/Paypal/whoever do, so really
| the flow and integration is pretty much the same
|
| edit: my experience only applies to UK (which were better and
| cheaper way before EU) and EU banks, the US is a minefield
| that actually is better avoided by just paying higher fees to
| a popular processor rather than deal with banks who think its
| the 1800s)
| poxrud wrote:
| Stripe stopped being competitive when they began keeping all of
| the transaction fees, including a percentage of the entire
| transaction, when issuing refunds. A customer changed their
| mind... well you just lost a lot of money.
| segmondy wrote:
| Imagine you sold a product on the internet, you paid Fedex to
| ship it. Your customer decides they don't want your product
| anymore. You refund them their money, but then you have to
| refund them the shipping cost. Not just the cost to ship it to
| them, but they want you to handle the return for free. Yeah,
| that costs money. Transaction fees are not free. Stripe doesn't
| own the credit card network.
| poxrud wrote:
| No that is incorrect. The credit card network returns most of
| the fees. They absolutely do not keep a percentage of the
| full amount. The credit card network might keep $0.3, but
| Stripe decided to keep the full 3-4%.
| conductr wrote:
| I agree but to be fair, that was always an expense to them.
| They just took it on the chin and used it as a competitive
| advantage/point of differentiation and it helped them grow.
| Especially makes sense as they initially targeted markets where
| software trials were being sold.
| ComputerGuru wrote:
| It's not and never was a "competitive advantage." The "real"
| existing players all returned the fees (modulo some fixed
| amount).
| jambojumbo wrote:
| the beginning of the end of stripe. Instead of attracting more
| customers and building the ground for a healthy startup
| ecosystem, stripe chose the shortsighted 'let's just charge
| more'. this immediately makes other alternatives like adyen more
| attractive...bad move and I don't get how patrick collison who
| roams around here let this happen. the 2.9%+0.25 was already
| allowing for healthy margins, and was higher than competitors.
| moneywoes wrote:
| Is Aden the only competitor here?
| makestuff wrote:
| Square is as well. I think there are several players which is
| good because if you design your payment systems to support
| multiple integrations you can switch between them without a
| ton of friction (source: last company switched a few times
| based on the terms they negotiated).
| sensibar wrote:
| So what to do as a German company to avoid the 1% fee on payouts
| to US USD bank accounts?
|
| Does anyone know if one can add a German USD-bank account to
| Stripe by now? (Was not possible a year ago)
|
| Does the 1% fee also apply if the company is based in
| Switzerland? (strictly not the EEA)
|
| Does anyone at which MRR scale one can negotiate fees down with
| Stripe?
| chinathrow wrote:
| > Does the 1% fee also apply if the company is based in
| Switzerland?
|
| Yes.
| [deleted]
| m3nu wrote:
| Together with the new payout fee this is a +46% increase for
| charging USD cards. 2.9% to 4.25%.
| glintik wrote:
| <<Dispute fees (also known as chargebacks) will increase from
| EUR15 to EUR20. We'll also no longer refund this fee if the
| customer's bank resolves the dispute in your favor, due to the
| costs Stripe incurs for managing dispute evidence submissions
| (regardless of the outcome).>>
|
| That's very interesting. Stripe is so greedy and dishonest.
| zhuzhu wrote:
| Stripe said: Amazon is my sugar daddy now. What do you want to
| do?
| reisse wrote:
| I don't know how Stripe can justify these pricing, except for "oh
| we can extract more money, let's do that!". In other (non-
| Western) countries pricing for local payment systems can be less
| than half of what Stripe charges, e. g. Alipay (one of the
| biggest Chinese payment services) charges about 0.55% merchant
| fee without per-transaction cost.
| hocuspocus wrote:
| Even in the EEA if you only care about payments, nothing stops
| you from going to a cheaper alternative. For instance
| https://www.stancer.com/en/pricing
|
| And I don't know the rates big players negotiate with Adyen but
| it's probably similar.
| chinathrow wrote:
| I got hit by the same price increase today - I assume they're
| prepping up for the IPO.
| xwolfi wrote:
| Yeah but it's not the same economy of scale, you'll reckon.
| Alipay is also completely systemic in China and cant exactly be
| considered a private entreprise anymore: they're "more famous
| than Jesus" in their own way.
|
| I barely ever heard of Stripe as a European, and now that I
| live in China, it's almost mandatory to have alipay.
| tbihl wrote:
| Why don't Stripe customers shift to Alipay? I don't know
| anything about the service, but that seems like a pretty
| straightforward win, if they're as similar as you suggest.
| lima wrote:
| More work to support multiple payment providers (and their
| respective APIs, conflict resolution procedures, fraud
| prevention systems...).
| reisse wrote:
| Because countries where both work are not completely
| overlapping. It'd be very interesting to compare Stripe
| market share in countries where there are strong competitors.
| PeterisP wrote:
| The key part of the parent comment was 'local payment
| systems' - that rate is for Alipay payments from China-issued
| payment instruments, it's not for accepting Visa or
| Mastercard. It wouldn't be enough for Stripe customers
| (merchants) to switch to a cheaper payment system, the actual
| consumers would have to do it as well.
| HPsquared wrote:
| Different regulations probably.
| puzzlingcaptcha wrote:
| Higher costs of compliance in the EU perhaps?
| kzrdude wrote:
| EU has limited the fees credit card companies can apply on
| transactions in Europe, doesn't that mean Stripe should have
| lower overhead costs there?
| Symbiote wrote:
| That is the case. Stripe will be charging the American
| businesses with American customers 2.9% + 30C/, and their
| European businesses with European customers 1.5% + 25C/.
| throwaway67743 wrote:
| That only applies to the card networks not merchants or
| processors, but there is also a dual rate system that the
| EU are obsessed with where intra EU is much cheaper, they
| mandated the same for voice calls too, it's very dumb and
| just insulates the EU further (which is their plan it
| seems)
| Symbiote wrote:
| Yours is a rare anti-EU comment arguing that the EU
| should extends its regulation beyond its
| borders/citizens.
| throwaway67743 wrote:
| It is neither an anti EU comment nor arguing for
| extending regulation beyond its borders, but alright
| hocuspocus wrote:
| It doesn't apply to the card scheme, it applies to
| interchange, i.e. the part that goes back to the card
| issuer.
|
| I don't see how that is dumb, the EU cannot do anything
| about issuers outside of it, and PSPs have to reflect the
| huge difference in interchange fees one way or another.
| throwaway67743 wrote:
| Correct, merchants do not charge interchange,
| banks/networks do, and its dumb because it increases the
| costs of doing business in the EU (which as I said, makes
| it more insular)
| hocuspocus wrote:
| How does lowering fees increase the cost of doing
| business exactly?
|
| The only businesses suffering from the cap are issuing
| banks.
| throwaway67743 wrote:
| Fees are not the only cost of business, compliance is too
| - and things like if you want to enjoy lower intra-EU
| costs then you need to be in the EU which is an added
| cost as a non-EU business, etc - it's not as simple as
| "fees more eu bad"
| hocuspocus wrote:
| That's true pretty much everywhere on Earth.
|
| Some countries smaller than the EU bloc have more complex
| regulations regarding online payments.
|
| The EU managed to cut fees in half for its population and
| businesses, if you want to stay outside then why do you
| care?
| throwaway67743 wrote:
| You're kind of agreeing at this point, despite what the
| EU believe they are not self sufficient and require
| international business - the only people who lose out by
| that not happening are citizens and there are already
| enough reasons doing business (or even buying) stuff from
| outside the EU is a tedious and expensive chore
| yywwbbn wrote:
| Fees in the EU tend to be considerably lower than in the US
| Traubenfuchs wrote:
| The old rules of supply and demand, competition and vendor lock
| in?
|
| As long as they do not lose customers / don't miss out on new
| customers, it was the right decision.
| switch007 wrote:
| Everyone is increasing prices in Europe. Inflation in the UK is
| crazy. I'm standing in my local coffee place and a basic
| Americano went up PS0.50 overnight
|
| It's crazy and a lot of gouging is happening (not so much these
| smaller companies. They do have it tough. The owner does drive
| an expensive BMW though)
| brmgb wrote:
| > Everyone is increasing prices in Europe. Inflation in the
| UK is crazy.
|
| Yes but payment processors generally take fees as a share of
| transactions. That naturally shields them for inflation.
|
| Raising their percentage fees is just a naked cash grab.
| switch007 wrote:
| I wasn't attempting to justify it. The opposite.
| prepend wrote:
| It's interesting how these fees slowly inch up. It's a slippery
| slope argument or more like a glacier. But once the market
| stabilizes, I think there's lots of pressure to eat these fees
| over time.
|
| I wonder if everyone will end up with the apple model of only
| getting 70% and letting some huge conglomerate fight over fees,
| or just vertically integrate.
|
| I'm not a fan of government regulation but this is an area where
| it may be worth having some digital cash mediated exchange where
| the transaction fees are meant to be absurdly low, like 1% or 5
| cents whichever is lower. It would provide all the insurances of
| cash, so none, but would be a strong financial infrastructure
| that helps consumers and business.
|
| This has been my hope for crypto since 2009, but the fees have
| always been higher than visa for consumer purchases.
| kylehotchkiss wrote:
| > Dispute fees (also known as chargebacks) will increase from
| EUR15 to EUR20. We'll also no longer refund this fee if the
| customer's bank resolves the dispute in your favor, due to the
| costs Stripe incurs for managing dispute evidence submissions
| (regardless of the outcome).
|
| Is Stripe testing dispute fees for all chargebacks out in EU
| before rolling out in the US?
|
| 1) This is gonna be bad for NGOs
|
| 2) So now people can just DDOS an org with chargebacks to put
| them in the red?
| gnicholas wrote:
| I wondered if it's a practice run for the US, although it's
| possible the process for "managing dispute evidence
| submissions" is more involved in the EU. They seem to do next
| to nothing in the US -- just forward the docs you upload to the
| customer bank, I assume.
|
| I agree with 2 -- this would be really bad if a business were
| targeted with chargebacks. There would need to be some
| defensive mechanism that kicks in and retroactively refunds all
| these fees in such cases.
|
| I also wonder if this is just a way to pump up their margins in
| advance of an IPO.
| matips wrote:
| Interesting, I did not know that internet payments are so
| expensive. In Poland (UE) max interchange is 0,3%. Blue Media
| (Polish payment gate) cost 1,19%. 1.9%-3,25% + EUR0.25 looks
| expensive.
| [deleted]
| zhuzhu wrote:
| UK too. I think I need to try other payment processor?
| TekMol wrote:
| How can Europeans use Stripe when they can't use Google Fonts and
| Google Analytics on the grounds that sending even a single IP
| packet to a server under the control of a US company violates the
| GDPR?
| PeterisP wrote:
| One aspect of this is that data processing which is necessary
| to do what the customer explicitly requested is permitted (GDPR
| article 6.1.b). Making the payment for your purchase is such a
| thing and this processing is lawful, but doing analytics or
| tracking who viewed the site through fonts is not, and
| generally requires explicit opt-in consent.
| that_guy_iain wrote:
| In theory, they can't. But no one is enforcing it because there
| is a plan to change the law.
| sgjohnson wrote:
| No. Technically it's illegal to provide such service, not
| receive it.
|
| Fun fact, this very website is not GDPR compliant. I've never
| ever seen a cookie notice on HN, which is legally required.
|
| Of course, none of this is relevant, because AFAIK HN has no
| physical presence in the EU, but still, this site is not GDPR
| compliant, which just outlines how stupid GDPR actually is.
| Semaphor wrote:
| > I've never ever seen a cookie notice on HN, which is
| legally required.
|
| What for? The GDPR does not require consent for purely
| functional cookies, and the only data I see stored is my
| account cookie. So the existing privacy policy should cover
| them.
| dgb23 wrote:
| Cookie notices are required if you for example use them to
| pass data to third parties.
|
| A login cookie that is just for auth is not that. It is
| specifically requested by the user and implies that the
| user's data is managed on that site and can be evicted.
|
| Same with analytics. The problem is not that you're doing
| analytics. It's that the user doesn't know that your doing
| it and that you're passing on that data to a third party.
| Semaphor wrote:
| It's not just about third parties. I still need to
| consent to any PII you gather for your analytics, even if
| it's completely first-party.
| dgb23 wrote:
| Would have assumed that anonymous logging is fine?
| Generating usage data? Error logs? As long as it's not
| sold, private data or used to identify the user?
|
| Highly doubt that kind of gathering is a problem. If it
| were you could close 95% of the web.
| Semaphor wrote:
| As I said, PII. So if your only PII is storing the IP
| one-way hashed and salted, keeping the salt only for a
| day as like (I think) Plausible does, it's
| probably/possibly okay.
|
| Besides that, intent also matters. For example, we had to
| start logging IPs for every newsletter change, or you can
| log IPs in your access log for security reasons without
| consent. Logging the same IP into your analytics tool
| becomes an issue.
| berkes wrote:
| > I've never ever seen a cookie notice on HN, which is
| legally required.
|
| For clarity: it isn't _always_ required. Only if you have
| third party (tracking) cookies.
|
| I don't know about HN. But its perfectly possible to have
| analytics, ads and other functional cookies, without
| pestering your users with cookie popups.
|
| Again: cookie popups and concent-banners aren't required.
| They are only required if you have "invasive" tracking in
| place.
|
| e.g. I've worked on web-apps that were tracked by a
| selfhosted matomo, by plausible or some other tracking,
| that did not have any GTM or other tag-managers, that had
| no ads or only ads which were served from their own domain
| and without any 3rd party trackers, lacked all the GAFAM-
| pixels, had their fonts and other assets self-hosted (or on
| a simple, non-tracking CDN) and so on. Non of these needed
| any form of banner, popup or wizard.
| that_guy_iain wrote:
| It's illegal for you to provide a service that isn't
| compliant. So if you use Stripe, therefore transfer data to
| a non-compliant country, you would be illegally providing a
| service that isn't complaint.
|
| Also, the cookie notice is not GDPR it's a separate law.
| And if you only use functional cookies such as login
| cookies no notice is required.
| enedil wrote:
| I don't think you are right. Right now, the only cookie
| present is my session cookie. This should fall under
| obvious reason to have a cookie (it's not a tracking
| cookie). The sets of required and of all cookies are
| identical. Therefore, a dialog like this changes nothing.
| Escapado wrote:
| Is that how it works? I thought as long as the user gives
| explicit consent to that happening it's fine. Most checkouts I
| have seen have a checkbox you need to check before being
| redirected to stripe/paypal and the likes which asks for
| explicit consent to the privacy policy rules.
| that_guy_iain wrote:
| The issue is, giving a US org data is considered a transfer
| of data to that the US since a US court can force a US org to
| turn over the data no matter where in the world it is
| located. US data laws are not compliant with GDPR. It's
| basically just down to the spy laws they have, for FISA
| letters I believe, without those they would be fine.
| TekMol wrote:
| The issue is not related to consent but to "safeguards".
|
| GDPR requires that user data is guarded in certain ways, and
| European courts have ruled that no data can be sufficiently
| safeguarded if it is under control of a US company.
|
| Google "analytics gdpr safeguards" or see here for example:
|
| https://piwik.pro/blog/is-google-analytics-gdpr-compliant/
|
| Especially the section "Does collecting visitors' consent
| solve compliance issues with Google Analytics?".
| jon-wood wrote:
| It's not even slightly how it works, and your interpretation
| is correct, so long as the customer has consented then you're
| fine. The issue with Google Fonts and Analytics is that the
| customer has very rarely consented to tracking (particularly
| with fonts), and in a great many cases even where there is a
| "I consent to tracking cookies" dialog the cookies were
| dropped before it was displayed.
| that_guy_iain wrote:
| With Google Font decisions have been about consent. With
| Google Analytics it's been about the transfer of data to a
| US org when a US court can issue a FISA letter. Basically,
| a privacy lawyer from the Netherlands has been hammering
| Google in court repeatedly.
| smeagull wrote:
| Sick of those stupid dialogs.
| latexr wrote:
| I find them to be good indicators of how bad a
| website/service is. The harder it is to dismiss the
| dialog while rejecting everything, the worse the service
| tends to be in other metrics. I think of those dialogs as
| big bright banners which advertise loud and clear how
| disrespectful a website is of its users. Noticing the
| pattern means I waste considerably less time on websites
| which aren't worth it.
| jeroenhd wrote:
| You and me both, I wish websites would stop being so full
| of tracking crap so these stupid popups can finally
| disappear.
| kzrdude wrote:
| Yes, I can't believe we've created a system where those
| are the norm. But we also have real world cities
| plastered with billboards, so it's not like everything is
| clean, perfect and rational in our worlds.
| parminya wrote:
| Me too, I wish the companies would obey the law without
| putting in the consent banner. It's not like there's any
| law obliging them to put in the consent banners. They
| freely chose to piss us all off even though they had the
| alternative of behaving like perfectly profitable pre-
| internet businesses and ... not tracking us.
| iso1631 wrote:
| Sick of sites tracking me
| [deleted]
| ptman wrote:
| Visa and MasterCard aren't in EU either. So you end up with US
| companies even when you use a local processor
| trollied wrote:
| If anybody is wondering what the parent comment is referencing:
| https://www.theregister.com/2022/01/31/website_fine_google_f...
| Anon4Now wrote:
| Those charges don't look exorbitant. They seem to be inline with
| what PayPal charges.
| Semaphor wrote:
| For comparison:
|
| PayPal normal: 2.99% + 0.39EUR
|
| PayPal Microtransactions: 4.99% + 0.09EUR
|
| So Stripe still has some edge vs PayPal in all but non-EU
| cards. Not sure if they offer a microtransaction optimized fee
| schedule, if not, PP is far better there.
| mihaic wrote:
| Since these charges are from the gross, it all depends on your
| profit margins. If they're >50%, sure, it's not a big thing. If
| it's 5%, that means that 0.5% extra on Stripe eats 10% of your
| profit.
| burdapoint wrote:
| _UK /EEA 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$2.50._
|
| My business does most of it's sales in USD and pays out to a US
| bank account, I don't understand this fee at all. Just because
| they can I guess? Stripe is really becoming the new PayPal. Will
| definitely be exploring options to move to Adyen or continue
| moving more customers over to Paddle as we've found Stripe to be
| increasingly frustrating to deal with.
|
| Now we're looking at 3.25% + PS0.20 for the card payment in the
| US, 0.5% for Billing to handle subscriptions, 1% to payout, 0.4%
| if you want invoices, 0.5% if you need to handle sales tax.
| Already at 5.65% + PS0.20 - that's without any of the paid radar
| tools.
| a1371 wrote:
| I thought just the base fee was high but these rates are
| insane. Where I live, the taxes we pay are less than this. It's
| not like stripe needs this money to build roads, they are just
| moving digits.
| [deleted]
| freedude wrote:
| I know this is in the EU, but do yourself and the businesses you
| love a favor. Pay with CA$H. The value you receive from local
| small businesses is worth the time it takes to avoid the tax on
| our economy.
| jeroenhd wrote:
| I dunno, the 25 cents surcharge payment processors take on my
| EUR10+ payment isn't really worth that much of a hassle to me.
| Ads have encouraged me to pay by card for years.
|
| I don't know why Stripe is taking a percentage on top of the
| normal processing fee, I'm guessing it's to deal with
| percentage differences for people paying using credit cards.
| There are many cheaper alternatives out there if Stripe is
| getting too expensive.
| dehrmann wrote:
| Cash isn't free, either. Processing cash involves trips to the
| bank, and it comes with the risk of theft, loss, and
| counterfeiting.
| rr888 wrote:
| Its crazy there isn't more competition. I was hoping that would
| be one thing cryptos would be good for.
|
| One thing I think regulators could do is force cc fees to be
| added to the price instead of hidden. Eg a $10 item costs $10,
| $10.20, $10.40 depending on which payment method you use.
| Zuiii wrote:
| > I was hoping that would be one thing cryptos would be good
| for.
|
| It already is. While still not many, there are companies that
| will pass the savings realized from avoiding traditional
| payment processors fees by giving you discounts if you pay them
| in crypto (e.g. mullvad).
|
| > One thing I think regulators could do is force cc fees to be
| added to the price instead of hidden.
|
| I agree. Increasing competition by nullifying this part of
| merchant pgw agreements (standard in most agreements) would
| definitely be better than the status quo. Another option is to
| simply impose limits on cc fees and ban non-compliant
| processors but I believe your method is better. Give the
| customer the information and power to choose.
| Laaas wrote:
| > Dispute fees (also known as chargebacks) will increase from
| EUR15 to EUR20. Due to costs for managing dispute evidence
| submissions (regardless of outcome), we'll no longer refund this
| fee if the customer's bank resolves the dispute in your favor.
|
| > If you or your users have an account located in an EEA country
| that has not adopted the Euro, here are the fixed fees of EUR20
| in local currencies: Bulgaria: LV40; Czech Republic: 550Kc;
| Denmark: 200kr; Hungary: 7,000Ft; Liechtenstein: 20CHF, Poland:
| 90zl; Romania: 100LEU, Sweden: 200kr.
|
| 200 DKK is almost 27 EUR. This seems a bit expensive considering
| that you don't get refunded if you're in the right anymore.
| gnicholas wrote:
| They're claiming that it costs them 20 euros to manage evidence
| that the merchant uploads? What does this process entail, other
| than forwarding that evidence on to the customer's bank?
|
| I find the dispute fees to be high already, since a customer
| can initiate a dispute with near-zero effort, but then I have
| to run around and gather evidence showing that their claim (for
| which they have to provide zero evidence) is not true. If
| someone has a subscription with me and it's renewed for several
| years, and then they decide they don't want it anymore (but
| don't tell us), they can initiate a "fraud" claim with their
| bank, which means that I have to prove it wasn't someone else
| who used their card -- with their email address -- to set up
| the account years ago.
|
| I have usually been able to email the customer, ask if/when
| they asked to terminate their account, and submit that as
| evidence that no request was made prior to the fraud
| allegation.
|
| But there should be a higher standard for the initial claim
| (some evidence should be required, which would at least ensure
| that claims are correctly categorized as "third party fraud"
| versus "I forgot this was a subscription").
| throwaway67743 wrote:
| It makes taking cards via Stripe completely untenable as anyone
| can dispute a legit charge and you're still out of pocket -
| imagine being charged 20 EUR for a 3 eur order even if the
| customer actually ordered it and just felt like being a dick
| ivan_gammel wrote:
| You just refund 3EUR order and move on. This is the reason
| why marketplaces implement sophisticated solutions for
| returns -- sometimes it is cheaper to let a few customers to
| get their product for free than to spend ton of money on
| returns, refunds and legal disputes. You can always reflect
| this risk in your prices.
| throwaway67743 wrote:
| My comment was specifically where the customer is being a
| dick, ie; not asking for a refund, or being refunded and
| then disputing it anyway (in which case you're now
| 20+3+fees down which is even worse)
| remus wrote:
| > You just refund 3EUR order and move on.
|
| That's fine if the customer actually asks for a refund in
| the first place. All the chargebacks I've handled through
| work (admittedly only in single digits), the customer just
| started a chargeback with no prior communications.
|
| It's a pretty frustrating process as we've got no issues
| giving refunds in most cases.
| tyingq wrote:
| That merchants hold almost 100% of the liability for fraud even
| if they do everything "right" to vet a transaction is crazy to
| me. The other parties (issuing bank, payment processor, payment
| network) are in a much better position to combat and detect
| fraud, since they see ALL the transactions. But the incentive
| to do better is low, since the merchant not only holds the bag,
| but sends them a penalty fee.
| ivan_gammel wrote:
| Disputes are not always fraud on customer side and it's
| really not the job of the bank to figure out who is wrong.
| Imagine two wallets disputing the fate of a coin on a bazaar
| - does it really make sense? E.g. if content of the package
| is stolen at warehouse or something else happens, where you
| think you sent the product and customer got nothing, customer
| may dispute your point of view and request chargeback.
| There's no easy universal answer here, so it's better to look
| at it in a constructive way and factor the risks into the
| price. Of course, bank or payment processor can offer an
| insurance product in this case and include this risk in price
| of transaction instead of collecting the fees. But this is
| just a game with financial models and putting labels.
| tyingq wrote:
| >Disputes are not always fraud on customer side
|
| Agreed, though the other 3 parties know a lot more about
| the customer, past disputes, and so on.
|
| Also, the argument applies for any kind of chargeback.
| Again, the other three parties combined see all
| transactions and have lots of context. And, if they
| required things like ip address, shipping address (they
| only ask for billing), they could really improve fraud
| detection. But they don't...there is an incentive problem.
| ivan_gammel wrote:
| This is convenient for merchants to offload fraud
| prevention to banks by sharing more data, but then this
| should be a service for which you pay and a section in
| your privacy policy, so that your customers know which
| data is shared with the bank and why (I'd say that would
| be too much data). Fraud levels are different for
| different merchants, so bundling this service with core
| product would be unnecessary tax for those businesses
| which rarely deal with fraud.
| petesergeant wrote:
| > premium cards [are] commercial, corporate, or business cards
| issued by Visa and Mastercard [and attract more expensive fees,
| even compared to Amex]
|
| Does anyone know more about that? Why are they more expensive? Is
| there a different underlying cost structure, or simply price
| discrimination by some intermediary?
|
| There's more information on "premium cards" here[0], but it
| doesn't explain the price difference or why a separate category
| is needed.
|
| 0: https://support.stripe.com/questions/what-s-the-
| difference-b...
| RC_ITR wrote:
| First some background:
|
| About 85% of payment fees are taken by the bank that issues the
| credit cards (this portion is called interchange). The
| remaining 15% is split between the card network and the
| merchant acquirer (in this case Stripe).
|
| Stripe collects some amount of of money from their merchant
| customers for each transaction. They _could_ set their take
| rate to be whatever they'd like it to be, this is and
| unregulated part of the market and is the reason you hear about
| crazy 10%+ fees for porn, gambling, etc. websites.
|
| Stripe then sends a subset of that fee (interchange plus a
| network fee) to Visa. Visa has a public ratebook saying exactly
| how much Stripe needs to send them for a ton of different kinds
| of transactions.
|
| Visa keeps their fee and passes the interchange to the issuing
| bank and the transaction is settled.
|
| Issuing banks feel like they "earn" interchange by acquiring
| customers and taking on their credit risk.
|
| Now it's important to remember that until _very_ recently, Visa
| was wholly owned by the banks. This is because Visa is
| basically a "don't shoot the messenger" actor who acts on the
| behalf of banks while taking a relatively small part of the pie
| for themselves.
|
| Now, on to premium cards. One of the things banks have started
| to do recently is say "Hey, we acquire really good customers
| _and_ we give them airline miles so they use their cards way
| more than they would otherwise. We should be compensated for
| that!"
|
| The same thing happens for corporate cards, except worse since
| most regulations on interchange target consumer cards.
|
| What that looks like in practice is new classes of Visa cards
| (Google: Visa Infinite) that have higher interchange rates
| (because the banks do _all_ the hard work of having rich
| customers). Because Visa is a "neutral party," they can get
| away with "if you want to accept any Visa cards, you have to
| accept them all."
|
| Therefore, cash/debit consumers continue to subsidize lavish
| vacations and corporate spend for the wealthy, because _of
| course they do_.
| smca wrote:
| > it doesn't explain the price difference
|
| Commercial interchange isn't regulated in Europe. The card
| networks have increased their interchange rates for commercial
| and business cards in many European countries.
|
| > or why a separate category is needed
|
| These fees have been moved into a separate category to contain
| increases to cards where network costs have increased
| significantly. (Rather than apply them more broadly.)
| Symbiote wrote:
| The EU regulation limiting card transaction fees does not apply
| to corporate cards or foreign cards.
|
| https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
| thiscatis wrote:
| Because they give more benefits (insurance, lounge access,
| cashback etc...) and someone has to pay for this (i.e. the
| merchants).
|
| For example Revolut Metal premium cards and corporate cards
| which offers benefits such as lounge access to pay-to-use
| lounges, travel insurance, cashback etc.. are mostly designed
| by the schemes in parternship with the issuing banks.
|
| Also note that mostly in the US and Europe AMEX works in
| another way than Visa and MasterCard. Where V and MC are in a 4
| party model (Issuing Bank that gets interchange, Processor
| (like Stripe) that processes the payment and gets a cut,
| Merchant that pays the merchant discount rate (or processing
| fee) and the customer that got their card from their issuing
| bank getting some benefits) Amex mostly cuts out the issuing
| bank and issues the cards to the customers directly.
|
| Hence because they don't have to share the interchange with the
| banks they offer way better benefits on their cards (airmiles,
| centurion lounges, travel benefits, extensive insurance) but
| also at a high cost for the merchant because these are really
| premium cards.
|
| Some consumer banks do issue AMEX cards so they will get their
| interchange.
|
| In Asia there's also Amex Debit cards, I think definitely less
| popular in the rest of the world.
|
| Something to note, also a lot of people in Europe think Visa or
| MasterCard == a Credit Card, this is not true. A credit card is
| an actual revolving credit instrument issued to the consumer by
| a credit institution such as a bank that then uses Visa or
| MasterCard rails.
|
| A card that you get from Lloyds or HSBC when you open an
| account in the UK might say Visa or MasterCard but it's on a
| prepaid or debit programme with the scheme but using Visa and
| MasterCard payment rails. The interchange on these (pre-brexit)
| and still in Europe is capped by law.
|
| Furthermore a lot of EU, Latam and Asian countries have their
| local payment rails which run at way lower costs than Visa and
| MasterCard to the merchants (Wechat, Alipay, Giropay, Payconiq
| etc.. to name a few).
|
| One last thing, I do think Open Banking in the UK and Europe,
| especially when Variable Recurring Payments are coming will be
| a game changer. The banks have been lobbying to delay most of
| the UX improvements for the users because they just make too
| much money as an issuer to get interchange.
| avianlyric wrote:
| > The banks have been lobbying to delay most of the UX
| improvements for the users because they just make too much
| money as an issuer to get interchange.
|
| To quote Hanlon's razor "never attribute to malice that which
| is adequately explained by stupidity."
|
| Having been involved in these conversations, I can tell you
| with some confidence, that banks are far more worried about
| being unable to deliver the technical work on time, than
| they're worrying about interchange.
|
| There will be fees to pay for OpenBanking Variable Recurring
| Payments, it's not going to be free for merchants to use.
| Which makes sense, contrary to popular opinion, running a
| bank account, and transacting, costs quite a bit of money.
| Every Faster Payment you send costs your bank a couple of
| pennies, not much on an individual level, but it sure adds
| up.
| thiscatis wrote:
| Having been in some of the same conversations, although I'm
| a big believer in Hanlon's razor, if someone suggests that
| for an OpenBanking payment the "authentication" should be
| the bank calling the user and having them listend to a 45
| second message to then key in a confirmation code it's no
| longer stupidity, it's creating artificial barriers. The
| same bank can perfectly do quicker ACS with OTP or tap to
| confirm using a push notification but for OB PISP it
| requires a phone call...
| avianlyric wrote:
| You should see some of the fraud cases that happen via
| open banking and faster payments.
|
| It's an extremely difficult problem to deal with because
| there is no dispute mechanism in the faster payment flow,
| and Faster Payments are not interested in adding one. As
| a consequence, once the payment is authorise, the moneys
| gone, and getting back is almost impossible.
|
| Fraudsters have been taking huge advantage of this, and
| regulators are demanding that banks protect customers
| from these scams, or eat the cost of reimbursement.
|
| Having worked on this specific problem, I can say that
| calling the customer for authentication is one of the
| most effective ways to prevent these scams. The call
| normally forces the customer to hang up on the scammer,
| which is incredibly powerful because it removes the
| primary source of pressure on the customer, and gives
| them space to think. Most customers then realise they're
| being scammed, and stop there.
|
| You may say that there's other ways of warning customers,
| like in app notifications etc. Well I've tired all that,
| they're not effective, regardless of how big, scary and
| red you make them. Even when tuned so the false positive
| rate is almost zero, so most customers only every see
| them when they're actually about to be scammed, they
| still don't work. Reason why they're not effective,
| customer mentions what they see to the scammer on the
| phone, scammer explains it away and pressures the
| customer to continue.
|
| This isn't to say there isn't some better balance, or
| that the banks aren't being lazy. But the fraud question
| is serious one, and a very difficult one to answer.
| Simply ignoring it when discussing Open Banking is either
| naive, or intellectually dishonest (I'm not claiming that
| you're intellectually dishonest, but there are plenty of
| people who like to gloss over the fraud issues, or just
| victim blame).
| thiscatis wrote:
| I'm very happy that the banks take fraud seriously, even
| if it delays innovation because the current chargeback
| flow is horribly broken for everyone involved except the
| schemes.
| GordonS wrote:
| > Because they give more benefits (insurance, lounge access,
| cashback etc...) and someone has to pay for this
|
| The company (or cardholder) pays for this - corporate cards
| and the like aren't free, they come with an annual fee. So
| it's not all on the merchant.
| petesergeant wrote:
| > example the Revolut Metal card
|
| Right but that's not a premium card and neither is Amex, so
| this doesn't follow
| thiscatis wrote:
| The Revolut Metal (personal, not revolut business) example
| might not be the best one (see also my other reply) however
| the reason I mention is still the same, someone has to pay
| for the benefits these premium cards offer, the interchange
| on these is higher.
| petesergeant wrote:
| This appears to not be true, because this is specifically
| commercial cards, and not consumer cards. The correct
| answer seems to be this one:
|
| https://news.ycombinator.com/item?id=34691714
| throwaway67743 wrote:
| re Open Banking, it's still a system where everyone but the
| actual customer gets useful access to financial services (ie;
| I can't get an API from a bank as the account holder, but I
| can give API access to a third party) - unfortunately that
| isn't mandated as part of the system and for me makes it
| completely useless.
| BasedInfra wrote:
| >premium cards [are] commercial, corporate, or business cards
| issued by Visa and Mastercard
|
| Revolut Metal (personal) is not one of these cards.
|
| Commercial cards (business banking, business credit etc) are
| what these cards are and they have less regulation in the EU.
|
| For instance no cap on interchange fees and they can show
| prices excluding the card fee and add that on at checkout for
| business card users.
| thiscatis wrote:
| I'm not saying Revolut Metal is one of these, I'm just
| saying the card schemes create different segments for cards
| that have their own benefits, for these benefits the cost
| is actually mostly going to either the user paying a
| membership fee or the MDR paid by the merchant to cover the
| cost. The benefits are not just a freebie given by the
| issuer or scheme, it's a marketint cost that someone has to
| pay for.
| Benjamin_Dobell wrote:
| Where are these fees documented?
|
| Corporate cards, or cards with more "features" (lounge
| access, insurance etc.) tend to have yearly fees associated
| with them, at least in Australia. I was under the impression
| the customer covers the cost of these extras, not merchants.
| [deleted]
| baby-yoda wrote:
| Assuming this is related to Stripe trying to decrease the effect
| of the next funding devaluation. [0]
|
| Hard to imagine they are still in a cashflow burn despite being
| around for so long and seemingly capturing a large marketshare of
| payments. Perhaps its primarily for insiders to take money off
| the table before an IPO lockup, with a not-so-great 6 month post
| IPO forecast?
|
| [0] https://techcrunch.com/2023/01/27/fintech-stripe-tried-to-
| ra...
| CalRobert wrote:
| Well as it so happens I'm only in the first day or so of
| integrating Stripe in to my subscription-based side project in
| the EEA. What should I use instead? Molliepay?
| 12907835202 wrote:
| So what are the main alternatives to Stripe?
| switch007 wrote:
| I thought they would be benefitting from everyone else raising
| their prices. Isn't this double dipping?
|
| Edit: and isn't it quite likely it's easy for companies just to
| pass this charge straight on to customers, given the climate?
| Maybe that was Stripe's intention with the timing
| bjackman wrote:
| I have been pondering transaction costs lately. Seems like this
| is an area where intervention could have massive impact: these
| costs are effectively a tax that incurs deadweight loss so
| according to prevailing economic theory if we can reduce it the
| whole economy should be catalysed.
|
| IIUC governments already introduce price caps for certain
| elements of this market but I think we could be doing more? Like
| mandating incumbents to implement open standards and subsidising
| their competitors?
|
| Dunno though I'm not very informed about the topic, just suddenly
| discovered recently how much of my income is just funding a
| fairly small number of payment providers.
| Timshel wrote:
| I wish those transaction cost would be made visible. Imo the
| seller should not care which card the client use, if it's more
| expensive to use a "premium" card then it should be made
| visible to the client and he should be the one to pay the
| overhead.
| IshKebab wrote:
| Yes this is all that needs to happen. The EU should mandate
| that sellers can pass transaction costs on to consumers if
| they want (but no _more_ than transaction costs, looking at
| you airlines).
| doikor wrote:
| > EU should mandate that sellers can pass transaction costs
| on to consumers
|
| EU actually mandates the opposite. It is illegal to pass
| the transaction costs to the consumer. The price you see on
| an item has the be the final price you end up paying.
| concerned_user wrote:
| In many online shops in EU you can see "Administrative
| fee" if your order is too small for example. So while
| companies are not allowed to do "Credit card fee" they
| still do it indirectly in one way or another, those that
| don't impose extra fee usually have higher delivery fee.
| marcosdumay wrote:
| Brazil has a similar rule, but the price you see on an
| item is the largest one you may end up paying. So, the
| seller can still reduce it if you choose a cheaper
| payment means, and many of them do that.
| pancrufty wrote:
| I love them for it. When I don't live in Europe it's
| infuriating to see the price levitate after every
| checkout step. Thankfully it's still not as bad as it
| used to be like 10-15 years ago.
| rightbyte wrote:
| It is important that the fee is printed on the receipt too
| no matter what since the card holder always pay one way or
| the other.
| chrismorgan wrote:
| Australia has exactly this rule.
|
| One influence in the setting of this rule was that payment
| card processors had been throwing their weight around
| requiring that merchants _not_ pass on cost, which was
| fairly clearly an abuse of their position of power. (For
| most in-person business, which was largely what was being
| dealt with at the time, cash is essentially costless, and
| so for some small businesses being forced to swallow
| payment card fees was genuinely an unreasonable burden.)
| woofcat wrote:
| I'll be the naysayer here. I very much disagree with this. A
| Visa is a Visa is a Visa. If you don't like it then don't
| take visa.
|
| Charging me as the end user more money because I have a
| "Premium" card would be a very fast way for me to not shop
| with you.
| dmurray wrote:
| Let me guess, you _do_ have a premium card that gives you
| 1% or more cashback on your purchases.
| woobar wrote:
| In US sales tax is made visible, i.e. it is not included in
| the listed price. And first thing foreign visitors do is
| complain about this.
| Dayshine wrote:
| That's not what visible means. Visible means a breakdown.
| List price should always include all fees.
| boc wrote:
| A breakdown into what part of the price is set by the
| business and what part is set by the government seems to
| fit your provided definition of "visibility".
| dahfizz wrote:
| I don't see transaction fees as fundamentally different than
| any other cost to the business. Do consumers also need to
| know how much the business pays in electricity, or the rent
| the business pays?
| pancrufty wrote:
| Not the same. The business can choose rent and electricity
| provider, but can't choose a customer's card (except maybe
| rejecting a whole circuit)
| scrollaway wrote:
| My years in fintech have taught me that it'll be very difficult
| to get these charges down without legislation. What they are
| is, essentially, insurance.
|
| For Visa/MC, "running the network" at cost is possible on much
| less money, but the network involves a lot of elements along
| the chain that can get transactions reverted. The "insurance"
| (1-3% of tx) pays for the legal-adjacent issues related to
| handling those transactions being contested.
|
| Go to a restaurant, use a US terminal? Great, the restaurant
| owner can modify the transactions after it's been authorized
| and long after you're gone, "because tip". There's zero checks
| on this, it's a matter of "it works because most people don't
| do it". So when it happens, sometimes the payer notices and
| issues a dispute and the _dispute management_ is part of the
| network. This is where a lot of costs go.
|
| Anyway, the network is ridiculously bad. The fraud/aml checks
| are not usually shared among payment providers, because they
| can just milk each other instead by selling their checks. No
| wonder it's hard to get the transaction fees down.
|
| And yeah, it's a duopoly. The solution by the way isn't to
| directly try to build a global visa/mc competitor; with the
| moat, that's impossible. Rather, it's to build on top of what
| European countries are doing. EU countries have built their
| local competitors (Bancontact, EPS, BLIK, iDEAL, Sofort, ...).
| Those have lower costs, and so would any locally-targeted
| provider because they each have to deal with less risk and
| complexity. Any aggregator (like Stripe is, by the way) can
| take payments for all of them and push people away from card
| payments. The problem with that very last part is a UX issue,
| people like paying by card.
|
| It's a difficult problem. What makes it especially difficult
| IMO is that once you're down this path and become successful,
| it takes some very specific, very early business choices in
| order to be able to turn down the mountains of cash that show
| up to your doorstep in the form of "align your fees with the
| rest of the industry".
| ptman wrote:
| https://www.epicompany.eu/ and https://nordicpayments.eu/
| instead of Visa/MC
| scrollaway wrote:
| Yup exactly, but you need to take that strategy and apply
| it beyond europe. For this you need local networks in the
| US as well for example. Right now, there aren't really any;
| some crypto based local networks but that's all.
|
| But the US is undergoing some serious banking network
| updates this year and that likely means some new local
| networks are being built. This idea will look very
| different by 2024 and maybe even be feasible.
| hocuspocus wrote:
| Unfortunately EPI has stalled, I don't know if we'll ever
| see MC/Visa cards co-branded with a pan-European scheme.
|
| However, the free market approach seems to work for
| mobile payments solutions such as the extremely popular
| ones in nordic countries. They have started to build an
| interoperable and federated network in Europe and beyond.
| For instance, there's a real demand from businesses that
| want to let Chinese or Indian tourists pay with AliPay or
| UPI.
|
| Don't get me wrong, I think DSP is one of the greatest
| thing the EU has ever done, but it looks like physical
| cards just need to die before we can see a true
| competition.
| krinchan wrote:
| You're referring to the launch of FedNow, right? It's
| interesting because most of the analysis I've seen keeps
| assuming it'll be more B2B and that people will just
| continue to use P2P apps. However, I don't see any reason
| said apps won't move to FedNow themselves. The underlying
| ACH should be fairly easy to swap out with FedNow, right?
| Venmo and CashApp have only free money (in the form of
| lower fees and faster settlement) and better security to
| gain, it feels like.
| scrollaway wrote:
| Yeah FedNow. It will be b2b but this means an easier time
| to launch fintechs in that space that make use of it.
| Consumers will benefit, the iteration time is just a bit
| longer.
| rendaw wrote:
| I assumed it was mostly to pay for chargebacks and fraud. What
| I think is crazy is basically anything < $10 doesn't need
| chargebacks, fraud protection, etc, and the fee is inordinately
| burdensome for those transactions.
|
| On a $1 itunes song it would have been an >30% cut, you can
| forget about selling any small digital thing worth less than
| that.
| gergov wrote:
| on the contrary, smaller transaction amounts are prone to
| MORE chargebacks because they are attractive targets for card
| testers
| rendaw wrote:
| I agree, but that's saying because credit card suck in way
| X, they should suck in way Y as well to accommodate. Stolen
| credit card information shouldn't be a thing, and people
| shouldn't be passing security critical 20+4 digit codes
| around (think oauth).
| Thorrez wrote:
| Why wouldn't small items have chargeback costs? Do credit
| cards ban chargebacks for them? If someone buys something
| cheap, it doesn't come, and the credit card company refuses
| to allow a chargeback, that's going to make some customers
| mad.
| rendaw wrote:
| Would you really file the chargeback paperwork for a $1
| purchase? Even if you're scammed, it's at the level where
| you say "I'll be careful next time" and move on.
| flangola7 wrote:
| I don't see a reason something as critical as transaction
| networks should remain privatized, it should be operated by
| society (via democratic government), not private interests.
|
| We don't have private corporations operate highways or the
| federal mail system. They may operate (heavily regulated)
| airlines, but not the traffic control that manages their
| interactions.
|
| Imagine having to pay a "takeoff clearance fee" or a toll
| station at every highway on-ramp.
| diogocp wrote:
| Private highways are very common in Europe. So is mail
| delivery by private companies (Deutsche Post is a big one).
|
| In Portugal, the mail company is private and 90% of the
| highways are operated by private companies. And this is a
| country where the Socialist party has been in power for 20 of
| the last 30 years.
| PeterisP wrote:
| Stripe provides value-added 'premium' service which competes
| with merchant banking solutions offered by most EU banks, and
| Stripe does not have a dominant position. But in general, yes,
| EU does place a LOT of attention to these deadweight
| transaction costs, and has had large interventions - for
| example, if you look at the price listed in this very article,
| the reason why 'international cards' have 3.25% fee and
| 'standard EU cards' have a 1.5% fee is primarily caused by EU-
| imposed changes to interchange fees which get paid by the
| acquiring/merchant institution (including Stripe) to the
| issuing bank.
| moneywoes wrote:
| Is there a list of competitors out there?
| abm53 wrote:
| On the other hand, transaction networks clearly add massive
| value, so it's very likely that net of fees (without which the
| network may not exist at all) these networks still add value.
|
| So it's more a question of finding the optimal equilibrium
| rather than viewing fees as "deadweight".
| bjornsing wrote:
| "Dead weight" might be too harsh a term, but I think "rent
| seeking" is spot on. And it's generally not a good idea to
| let rent seekers extract value in proportion to the damage
| they could potentially cause.
| dahfizz wrote:
| "Dead weight loss" is an economic term. It sounds like a
| generic English phrase but it has a very specific meaning and
| formula.
|
| [1] if you are interested. Particularly the section on the
| dead weight loss of taxes - in this case, transaction fees
| operate the same as taxes.
|
| https://en.m.wikipedia.org/wiki/Deadweight_loss
| runnerup wrote:
| > transaction fees operate the same as taxes.
|
| Absolutely. And for the colloquial English phrase "dead
| weight" that would correspond to the portion of these fees
| which go above and beyond the cost of running the (high-
| utility) transaction network. Reducing the rent-seeking on
| this network also reduces both the colloquial and technical
| meanings of "deadweight".
|
| But for the economic term "deadweight", additional
| deadweight loss can be reduced by anyone who can provide
| similar functionality to the current interchange network
| but at lower cost than the current network. This wouldn't
| reduce the colloquial "deadweight" because in theory 100%
| of the fees could already be going towards necessarily
| funding the existing network. But it would still reduce the
| economic deadweight of 1-4% tax on every transaction.
| psychlops wrote:
| Given any problem, someone will find use of authority as the
| answer.
| cma wrote:
| Solving coordination problems through voting. Something as
| fundamental as the payment system should have people
| competing on making the underlying processes more efficient,
| not building the biggest network lock in effects.
| psychlops wrote:
| By raising prices, they are encouraging competition.
| Eventually the prices will reach a point where people stop
| using the product. Until then, I guess people can try to
| get some laws passed to force their favorite company to do
| what they want. Of course, more laws usually raise the
| price of entry for competitors.
| MrBuddyCasino wrote:
| > IIUC governments already introduce price caps for certain
| elements of this market but I think we could be doing more?
| Like mandating incumbents to implement open standards and
| subsidising their competitors?
|
| This is a _very_ dangerous path to go down. Direct price
| control by governments usually leads to unforeseen consequences
| and often to disaster. Mandating open standards is probably a
| good idea.
| avianlyric wrote:
| The EU introduced price caps on interchange in 2015 capping
| interchange on credit cards at 0.3% and debit cards at 0.2%.
|
| That's almost an order-of-magnitude lower than interchange fees
| in the US, which are usually around the 1%-2% level.
|
| This is big part of the reason you don't see high value reward
| cards or cashback program in the EU. There simply isn't the
| interchange revenue to fund them, which is good thing, because
| high interchange + cashback creates a nasty regressive tax that
| transfers vast amounts on wealth from those with poor credit
| ratings (usually the least well off society) to those with high
| credit ratings (usually the most well off in society).
| dkjaudyeqooe wrote:
| > This is big part of the reason you don't see high value
| reward cards or cashback program in the EU.
|
| Interestingly my US 1.5%-3% (regular, also 5% special)
| cashback cards keep paying out on transactions here in the
| EU. I've always wondered who is losing out in that equation.
| triceratops wrote:
| You probably pay for it with the exchange rate spread. Your
| card may say no foreign transaction fees but they're
| already taking a 3% profit margin on the currency
| conversion.
| dkjaudyeqooe wrote:
| I definitely don't. Visa/MC takes about 0.5% and the bank
| takes nothing. I've check many times.
| lotsofpulp wrote:
| I expected this, but I have tested this theory many
| times, and my credit card issuing bank or even debit card
| issuing bank offer exchange rates extremely close to the
| spot rate.
|
| For credit card, I have tried this with Bank of America,
| Chase, and AmEx. For debit card, I tried with Schwab. And
| in all cases, I checked the currency exchange rate, and
| it was very close to the spot rate.
|
| Where you do get hammered is by international merchants,
| who ask if you want to pay in local currency or USD (if
| you are American I guess). You should always choose to
| pay in local currency (meaning the merchant requests the
| payment in local currency from your card), because your
| credit card issuing bank will give you a much better
| currency conversion rate than the merchant will.
|
| If you say you want to pay in USD, then the merchant will
| calculate a USD price that is much higher than the local
| currency price.
| pembrook wrote:
| This. There's so much funny business that goes on with FX
| rates that it makes me almost pro-crypto.
|
| Even the people who claim to offer raw spot market rates
| (ie. Interactive Brokers), in fact do not offer that. I
| would not be surprised in Visa & Mastercard do the same--
| although they claim otherwise.
| triceratops wrote:
| Come to think of it, would Visa/MC be doing the
| conversion? I believe that's the issuing bank's job. But
| they offer the rewards, not Visa/MC, so it doesn't change
| the original answer much.
| Denatonium wrote:
| When I took my Schwab debit card to Europe, the exchange
| rates that I got were identical to the ones posted on
| Visa's website, suggesting that it's Visa doing the ForEx
| conversions.
|
| A lot of banks do charge a percentage fee on top of
| Visa/MC's exchange rate, but my bank does not.
| Cyph0n wrote:
| Schwab and Fidelity debit cards are the only ones that do
| this AFAIK. In addition, you get unlimited ATM fee
| rebates, even outside the US. I've stopped taking cash
| home and instead withdraw from my Schwab account :)
| ar0 wrote:
| The answer is in the original Stripe article: The merchant
| pays much higher fees when you pay with your US credit card
| than when you pay with a EEA credit card because the
| interchange limits only apply to purchases within the EEA
| made with a "standard" EEA credit card (corporate cards are
| also exempt, which is why Stripe is charging higher fees
| for them as well).
| mytailorisrich wrote:
| The EU cap only applies if both payer and payee are local.
| If you have an US card and uses it in the EU then the cap
| does not apply.
| rgbrenner wrote:
| _" because high interchange + cashback creates a nasty
| regressive tax"_
|
| There's an interchange surcharge for rewards cards. Stripe
| bundles this all together to make the pricing simpler.. but
| most merchants use traditional merchant accounts, and they
| are charged based on the type of card used.
|
| Edit: For example, here's visa's interchange fees: https://us
| a.visa.com/content/dam/VCOM/download/merchants/vis...
| avianlyric wrote:
| Doesn't really change anything. VISA and Mastercard rules
| also prevent merchants from discriminating based on card
| type, either you except all VISA/Mastercard cards, or you
| except none.
|
| So the exact manner in which they're billed to merchants is
| kinda irrelevant, the cost ends up being spread over all
| consumers, regardless of their ability to recover the money
| via cashback or rewards.
| [deleted]
| rgbrenner wrote:
| Prices aren't set based on costs. Prices are set at the
| maximum the market will bear. If you've ever set prices
| for a product, you would see this yourself.
| Price*Volume=Revenue
|
| Consumers dont care if you can pay for the inputs to your
| product. They obtain a certain value from your product
| and have a certain expectation of what the price should
| be, and if your costs are above that, consumers are happy
| to watch you go out of business. In fact, inability to
| increase prices over time while inflation increases the
| cost of inputs, is one of the ways the economy pushes
| marginal business out of the market.
| mensetmanusman wrote:
| I feel bad about our high CC rewards in the US for exactly
| this reason. Usury was a sin in all religions for millennia,
| but not in the US.
| adrr wrote:
| How do credit cards provide 60 day interest free loan with
| only 0.3% charge to the merchants? I can see low interchange
| rates for debit cards like the US the interchange for debit
| card for major banks is capped at 0.05%.
| hocuspocus wrote:
| 0.3% over 60 days (in practice more like 15 to 45, only
| commercial cards have longer billing cycles) was really not
| that bad during a decade of near zero interest rates.
|
| And now that banks will finally make a bit more money on
| mortgages and other kinds of loans, I assume they don't
| mind the increasing cost of their customers' credit
| balance.
| dagw wrote:
| There is often a small annual fee connected with having a
| credit card (I think I pay on the order of $25 a year).
| Also effective interest rates are in the 15-25% range for
| most cards if you don't pay it off in full, which I'm sure
| quickly adds up.
| hocuspocus wrote:
| Zero-fee credit cards exist: https://www.advanzia.com/en-
| gb/customers
| sofixa wrote:
| > How do credit cards provide 60 day interest free loan
| with only 0.3% charge to the merchants
|
| They don't. They're rare, only do 30 days, and are often
| paid (you pay monthly/yearly for the pleasure).
| adrr wrote:
| 30 day billing cycle with 30 days to pay. Between 30 days
| and 60 days before payment.
| sofixa wrote:
| Not how they work in EU countries i know of (France and
| Bulgaria). You have a 30 days billing period, and then
| around a week to pay.
| ar0 wrote:
| There are lots of other ways credit card companies can make
| money: - Higher interchange fees when you purchase
| something outside of the EEA - Currency conversion when you
| buy something not in EUR - High interest payments when you
| do not pay off your balance in full on time
|
| On average, it will also not be a 60 day interest free
| loan: the "average" transaction will happen in the middle
| of the billing cycle, so that gives you 15 days until the
| invoice is sent, and many people I know pay their invoices
| much earlier than after the 30 days payment term.
| axelthegerman wrote:
| By charging exorbitant interest for folks who don't pay off
| their balance in full.
|
| Which kind of reminds me of SaaS products that offer a free
| tier to sell you on the premium subscriptions
| hocuspocus wrote:
| I really doubt that many credit card holders are actually
| using the revolving credit in Europe.
|
| For starters in most European countries, you are probably
| not going to qualify unless you're rich enough to pay
| your bills in full every month.
| tialaramex wrote:
| You can doubt it if you want, but the Credit Reference
| Agencies make a big fraction of their money because this
| is in fact possible.
|
| Say I'm Big Bank, and I want to launch a card I'm calling
| "Bonus Credit". I want to target customers who mostly
| _will_ pay me, eventually, but aren 't so flush that they
| can pay their full balance every month (e.g. they buy
| their summer break in January, pay it off over the next
| 3-4 months). I call Jumbo National Credit and I offer
| them PS25 per sign-up if they give me customers who have
| no super-negative credit events in the past say, 12
| months but are say 75-95% on recent payment history.
| Jumbo present this as a "Pre-qualified" instant Credit
| Card option for customers who match the profile, on their
| free web site. Click now, you are _guaranteed_ to be
| accepted. Customers don 't even realise they're reading
| an advert.
|
| You may have noticed that although 30 years ago "Credit
| score" was something you needed to go out of your way to
| discover, today you can get your score on a web site -
| sign up today to see it instantly. Why are these
| companies telling you something that was once an
| important trade secret ? Because these sites are now
| effectively marketing for 3rd party credit products. AIUI
| Experian invented this, I worked with people who were in
| a small rogue group at Experian which proposed instead of
| fighting the government to keep it secret they should
| turn access into a revenue source, they were laughed at
| internally more or less up until the record profits
| rolled in and then suddenly it was champagne and bonuses.
| khuey wrote:
| Debit card fees in the US have been capped at $0.22 + 0.05%
| for more than a decade.
| dagw wrote:
| Which is still over 1% for purchase under $20
| woobar wrote:
| Why do merchants in Germany have minimum transaction
| amounts for card purchases then?
| mardifoufs wrote:
| But still less than the EU's 0.2% cap for any serious
| purchase. (Over ~120$, so I'm sure it evens out)
| MarkSweep wrote:
| Only for large banks. Search " durbin exempt interchange".
| khuey wrote:
| Last I looked at the numbers most transactions were
| covered by the Durbin Amendment. Interchange fees for
| exempt single message (PIN) transactions had also fallen
| to basically the cap. It was really only exempt double
| message (signature) transactions that were still
| expensive.
| kmlx wrote:
| > you don't see high value reward cards or cashback program
| in the EU.
|
| this seems like a false statement.
|
| here is an article from 2021 that highlights some of the
| numerous cashback offers:
|
| https://medium.com/@danminea/best-cashback-cards-with-
| reward...
|
| and Amex usually has cashback cards as well.
|
| disclaimer: i have used some of these cashback cards both in
| the EU and outside of it.
| TheCoelacanth wrote:
| Key part of the phrase "high value". Some US cards give
| back ~2% on all purchases.
|
| The best of those appears to be 1% on purchases at six
| specific retailers or 0.1% on purchases in the EU/1%
| outside of the EU. Many of them don't even give _cash_
| back, they give their own cryptocurrency that they made up
| out of thin air.
| avianlyric wrote:
| From the very article you link too, about three paragraphs
| in:
|
| > Why then are there so few and apart offers for cashback
| cards that can be used in Europe?
|
| >
|
| > One explanation I've seen is this: they're not so common
| in the EU because our debit/credit card fees are regulated
| and very low.
| conductr wrote:
| This is the answer. In the US the business essentially
| funds the rewards these cards provide because they can
| charge whatever interchange fee that card has decided.
| hocuspocus wrote:
| > and Amex usually has cashback cards as well.
|
| The cap applies on 4-party schemes, not Amex (nor Diners,
| Discovery).
| triceratops wrote:
| These are not high value rewards cards. You should see what
| the US has.
| traceroute66 wrote:
| > nasty regressive tax that transfers vast amounts on wealth
| from
|
| As long as you're not a well off person with an AMEX card
| that regularly makes purchases outside of your AMEX card
| currency.
|
| AMEX is nuts in that all non-home currency transactions go
| via USD.
|
| So, for example, if you have a EUR AMEX and you make a GBP
| purchase, your conversion will go GBP -> USD -> EUR with AMEX
| taking a cut at each step along the way.
| csomar wrote:
| The carding ecosystem is going down. In the last two years, I saw
| a surprising uptick in the number of businesses that will charge
| a 2-3% fee if you pay with card. This is from the US to Europe to
| SEA.
|
| My guess is that most commerce will start offloading this cost to
| customers especially as new payment methods become available (ie:
| wallets)
|
| Lest government impose cards monopoly and force transactions with
| them, I think we have reached/are close to the peak of
| mastercard/visa.
| bombcar wrote:
| Iirc in the US at least the gov't finally struck down the "must
| charge same as cash" requirement that the credit card companies
| were forcing on everyone.
|
| And inflation has given them incentive to start actually doing
| it - at least two restaurants here have a cash discount now.
| dexterdog wrote:
| So few places actually followed that rule anyway, especially
| every gas station.
| sschueller wrote:
| In Switzerland Stripe is already 2.9% + CHF0.30 which is higher
| than the new rate in the EU.
|
| If you want a local solution that also can do Twint (Swiss p2p
| payments) without extra contracts then I would recommend you try
| Payrexx[1].
|
| Per transaction fees are also less than what Stripe is charging
| although you have a monthly fixed fee.
|
| [1] https://www.payrexx.ch
| hocuspocus wrote:
| > In Switzerland Stripe is already 2.9% + CHF0.30 which is
| higher than the new rate in the EU.
|
| We're outside the EEA cap on interchange fees, that's not
| surprising.
| stanislavb wrote:
| Thanks. I'm wondering, are you affiliated with Payrexx?
| titaniumtown wrote:
| Switzerland isn't in the EEA though? or am I mistaken
| jkaplowitz wrote:
| You're correct. It's in EFTA and the Schengen Area, but not
| in the EEA or the EU.
| traceroute66 wrote:
| > Switzerland ....
|
| Everything's outrageously expensive in Switzerland, so why
| shouldn't Stripe be too !
| mtmail wrote:
| related 6 days ago "Stripe increases fees for EU and UK-based
| businesses in April "
| https://news.ycombinator.com/item?id=34609182
___________________________________________________________________
(page generated 2023-02-07 23:01 UTC)