[HN Gopher] Stripe increasing "instant payout" fees by 50%
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Stripe increasing "instant payout" fees by 50%
Author : cemerick
Score : 137 points
Date : 2024-05-21 01:31 UTC (10 hours ago)
(HTM) web link (support.stripe.com)
(TXT) w3m dump (support.stripe.com)
| qmarchi wrote:
| Anyone have a list of providers that use Stripe Connect?
| danpalmer wrote:
| There are going to be thousands. I've seen several small
| businesses in niche areas that happen to use Stripe Connect to
| offload all of the payments to a company's existing Stripe
| account.
|
| All companies taking funds via Stripe Connect will know they
| are doing so via Stripe, so I don't think a list of Connect
| providers would help here.
| joshstrange wrote:
| I'm confused by your question. They mention Connect in the FAQ
| but this only applies to instant payouts, honestly it seems
| more confusing that they mention Connect at all in this
| context. What are you getting at or trying to figure out with
| your question?
|
| I'm interested because my business used Stripe Connect but this
| change seems to have zero change for me. If businesses want
| instant payouts they can decide that on their own and if they
| want to eat the fee, it doesn't matter to me.
| VoidWhisperer wrote:
| The title feels a bit disengenious. Technically, yes, it was
| increased by 50% of what it was, but it is a shift from 1% to
| 1.5%, not up to 50% of each transaction.
| colecut wrote:
| That is what a 50% increase means.
| adolph wrote:
| Kinda. To the degree that the object of increase is also a
| percentage the statement "increasing _X_ (where x is
| quantified as a pct) by _Y_ %" could mean that X of 20% is
| increased to 70% or to 30%. It would be more clear to state "
| _X_ increases from _Y_ % to _Z_ %."
| colecut wrote:
| 20% to 70% would be quite the fee increase, but I suppose
| that is a way of thinking of it.
| clipsy wrote:
| No, not kinda. In the example you present, if 20% increased
| to 70% the appropriate description is either a 250%
| increase or a 50pp ("percentage point"[0]) increase.
|
| [0]: https://en.wikipedia.org/wiki/Percentage_point
| mtnGoat wrote:
| Math doesn't do "kinda". If you are paying $100 for
| something, and then it is $150, that's is a 50% increase
| and is an undeniable fact.
| DangitBobby wrote:
| Percent increases are kind of a weird metric in a lot of
| cases. This is one of them. It's not particularly
| informative.
| qntty wrote:
| Percent vs percentage points. It's slightly confusing but the
| title is correct.
| cplat wrote:
| The title is correct. But I agree that saying "50% increase"
| conveys less information than saying "1% to 1.5%" (because you
| don't know 50% of what), and seems to have been used only to
| make the title more dramatic.
| bananamerica wrote:
| I interpreted it as a increase in the fee.
| SoftTalker wrote:
| Yes, it's editorialized. The actual title is "June 2024 pricing
| update for Instant Payouts for businesses in the United States"
| wmf wrote:
| I understand why companies want to bury bad news under
| generic titles but that doesn't mean we have to play along.
| This is a case where "editorializing" the title seems
| helpful.
| m3kw9 wrote:
| Choose between "now 1.5%" or "50% increase"
| paulpauper wrote:
| A rule of thumb: if it is really bad it will not be reported by
| the actual company doing it. It will be buried in the TOS and
| then discovered by angry users, and picked up by media.
| csomar wrote:
| I think people who know/use Stripe will have no confusion about
| this.
| abnercoimbre wrote:
| Although rare, I use instant payout for my small business.
| It's a lovely convenience and the extra 1% hit (on top of the
| usual transaction fees) can be a worthwhile tradeoff. I can't
| explain it, but the new 1.5% fee killed the motivation to use
| it entirely.
| dataflow wrote:
| I don't feel it's disingenuous at all. When I read the title I
| instantly understood it to mean multiplying the fee by 1.5. In
| what world would anyone take this to mean that they're charging
| 50% of each transaction?
| dataflow wrote:
| I don't feel it's disingenuous at all? They're increasing the
| _fee_ by 50%... of the fee, obviously. In what world would
| anyone take this to mean that they 're charging 50% of each
| transaction?
| beAbU wrote:
| It's a common problem when reporting on changes of some
| percentage value. I guess it's more dramatic to say "increased
| by 50%" rather than "increased by 0.5 points"
|
| Common example headline: "Inflation up by 100%" when it went
| from 1% to 2%. The headline implies goods & services are now 2x
| more expensive than before, which is not the case.
| tananaev wrote:
| Why is this such an important news? Do people regularly use
| instant pay out? I would think that it's mostly for emergency
| situations. Normal payout is still free.
| notatoad wrote:
| I don't think the bar for appearing on the front page of HN is
| "important news"
|
| This is mildly interesting, and maybe important for a few
| people. That's enough.
| immibis wrote:
| It's apparently lower than "I made a raycaster in 256 bytes"
| and higher than "I got banned from Stack Exchange for not
| supporting Israel". I can't really tell where the bar is.
| amatecha wrote:
| Did I miss something? The most recent post with the word
| "banned" in the title was apparently 5 days ago...
| alborzb wrote:
| It was this I believe --
| https://news.ycombinator.com/item?id=40281699
| amatecha wrote:
| Oh, good find, thanks. I guess flagged/dead posts don't
| show in search results >_>
| Gasp0de wrote:
| I can't see where the original post links to, but if what
| the commenter said is true, you got banned not for "not
| supporting Israel" but instead for "supporting the
| slaughter of 200 teenagers".
| immibis wrote:
| Well, yes. That's how this works. In politics, nobody
| ever says they are punishing you for
| $obviously_insane_thing_to_punish_someone_for - they make
| a more plausible excuse to accuse you of. That woman
| arrested in Russia for holding a blank sign wasn't
| arrested for holding a blank sign - she was arrested for
| attempting to destroy Russia or something like that.
|
| But this is too far off-topic. The point is, that was
| evidently below the bar of what's allowed on Hacker News
| even though I'd think as many people would have wanted to
| know what's going on on SE, as want to see a cool
| raycaster.
| xyst wrote:
| I think stripe was a YC funded company at some point. Algos on
| hn pump them hard.
|
| Founder still lurks HN as well.
| internetter wrote:
| I get stripe was YC, but its basically handling the entire
| SaaS economy at this point, and then some. 1 trillion dollars
| flew through the platform in the past year, which is similar
| to paypal
| ec109685 wrote:
| For gig workers, instant payout is a nice deal and increases
| the value of the platform, so being able to flow from customer
| to worker seamlessly is a value add.
| frandroid wrote:
| These are words
| faeyanpiraat wrote:
| Approximately 30 of them words
| DANmode wrote:
| Ask your Uber driver on a Thursday!
|
| I've met drivers who have had to pay out multiple times per
| day.
| ffpip wrote:
| Uber can easily just have 2 days of revenue ready in cash (or
| even a loan will be much cheaper than 1.5%) to not pay 1.5%
| every time.
| BillyTheKing wrote:
| for Fintechs who're using Stripe as a way to allow users to
| purchase stock/remittances/e-wallet balances etc. instant
| payouts are very important since in most cases people who load
| with stripe also consume those funds on the platform instantly
| ffpip wrote:
| Won't they have a rolling period, since a lot of customers
| just add funds and might not use it?
|
| So you can use the balances from the people who added money 2
| days ago, today.
| withinboredom wrote:
| In many countries (including most states in the US),
| comingling funds between users is how you go to "jail" as
| it is usually a criminal offense.
|
| see: Money Transmission laws
| iJohnDoe wrote:
| Genuine question. In what way free? Stripe still takes their
| fees? Or is there a way to avoid fees when sending an invoice
| to a client?
| figassis wrote:
| In some industries, for example where tipping is important,
| getting payouts at or almost at the speed of sales is often a
| differentiating factor.
| jefozabuss wrote:
| I'd guess advertisers might like this feature as they could do:
|
| - Buy ads targeting your page selling stuff (for example a
| course) - Generate revenue - Instant payout - Repeat
|
| In this flow you don't need to wait 1 month for a payout so you
| are not limited doing this once a month, you can do this for
| example 12 times a month therefore generating much more
| revenue.
| gjsman-1000 wrote:
| If I remember correctly, payouts always take two or three days to
| clear, to comply with all of the settlement and legal processes.
|
| The "instant payout" is actually a temporary loan from an entity
| already approved as having all funds available for immediate
| disposal at multiple links in the chain. This is then used to
| create the illusion of an instant payout... while the "loan"
| guarantor receives payment 2-3 days later.
|
| This is also why there's actually a "instant payout" limit on
| your Stripe account, almost like a credit limit - because it
| basically is credit.
| contingencies wrote:
| Sounds like a blockchain startup in the making!
| vel0city wrote:
| Where you'll pay fees on the chain, fees at the exchange
| trading for fiat, and then fees sending the fiat back to your
| bank so you can actually make payroll with money normal
| people actually use.
| lxgr wrote:
| How would blockchain accelerate ACH transfers (or make wire
| transfers cheaper, or convince banks to support FedNow)?
| twelvechairs wrote:
| Yes as noted on the page
|
| > You can always pay out your funds using our standard schedule
| (2 business days) for free.
| lxgr wrote:
| > payouts always take two or three days to clear, to comply
| with all of the settlement and legal processes
|
| No, that's usually just how long ACH transfers can take. In
| most cases, it's more like next-day these days, in my
| experience (e.g. from paying out from PayPal to my checking
| account or between checking accounts), but that depends on the
| specific ACH type and timeline, I believe.
|
| > The "instant payout" is actually a temporary loan
|
| It's usually not. Actual settlement of both card and ACH
| payments usually happen on the next business day, but since
| that goes for both legs of most transactions, the settlement
| periods "cancel each other out".
| lazyant wrote:
| > Navigate to the Payouts section of your Balances page > Filter
| by "method"
|
| I have no "method" filter on that page, only "date", "amount" and
| "status". Also they talk about 2 business days payments as
| default but in the settings you can only choose between automatic
| every day / week / month.
|
| Since the instant payout is kind of a loan and you have to
| request it, pretty sure it doesn't affect me but it's all very
| confusing.
| tjbiddle wrote:
| They likely meant the ACH is 2 business days.
| toomuchtodo wrote:
| Stripe could choose to support FedNow instant payments and
| push these funds for pennies (up to $100k at a time),
| assuming the receiving institution hosting the deposit
| account(s) is set to receive on those rails. They would
| arrive within 20 seconds, per FedNow's SLA.
|
| Only costs ~$25/month to plug into these rails, plus a few
| cents per transaction.
|
| https://www.frbservices.org/financial-
| services/fednow/organi...
|
| https://www.frbservices.org/resources/fees/fednow-2024
|
| https://www.frbservices.org/binaries/content/assets/crsocms/.
| ..
| tiffanyh wrote:
| Interesting to see from that list that Bank of America,
| Citigroup, Capital One & PNC missing from the list.
|
| Appears they are still lagging in adopting FedNow (while
| Wells Fargo and US Bank have adopted)
| toomuchtodo wrote:
| Congress directed the Fed to create FedNow so the largest
| commercial banks couldn't gate smaller regional banks
| access to real time payments via the private consortium
| The Clearinghouse (owned by the banks you list). FedNow
| directly competes with this private network. Think what
| IRS' Direct File is to TurboTax, reducing unnecessary
| economic drag at scale.
| silisili wrote:
| Those listed(and many others) support RTP, which came
| first and accomplished the same thing. They probably see
| little incentive in adding FedNow any time soon.
| internetter wrote:
| > Stripe could choose to support FedNow
|
| But then they wouldn't be able to charge more fees
| toomuchtodo wrote:
| Indeed, that was where the comment was leading.
| gnicholas wrote:
| What would be the reason for them to boost this fee right now? Is
| it just a pure profit play? That is, they think they can extract
| more cash from the people who are reliable instant-payout users
| (rather than losing them to standard payouts)?
|
| Does this portend anything for the company, in the way that not
| backfilling positions means that layoffs may be imminent? Or
| perhaps a corporate transaction like an IPO?
| mike_d wrote:
| For any payment processor part of the fees you pay go to
| offsetting fraud (it is a cost just like servers or people).
|
| Instant payout is much riskier because if a bad actor is using
| Stripe to cash out stolen credit cards they have less time for
| the banks to detect and report it before the money is gone. As
| a result it has a higher cost to the company.
| Brystephor wrote:
| Genuine question: Is fraud actually something that costs
| Stripe money when it comes to payouts?
|
| The reason credit card fraud for charges costs money to
| processors is because of charge backs. I believe charge back
| fees originate from the card networks themselves (Visa,
| MasterCard, etc). These processors also enforce a variety of
| limits when it comes to chargebacks for each merchant. This
| means if you're the layer between the merchant and the
| network, the merchants generally will rely on you to pre-
| emptively detect fraud. Those systems all cost money too.
|
| As far as I know when it comes to payout rails such as ACH,
| real time payments (RTP), Zelle, I don't believe the payment
| processor holds any liability for fraudulent transactions. In
| other words, if a fraudulent payout occurs through stripe via
| RTP then The Clearing House banks aren't going to come after
| stripe for the money. They'll tell the end user "whoops,
| should've taken better care of your digital info. Bye!"
|
| source: Worked at a payment processor and worked on payout
| rails and integrating with banks. Also do work now as an end
| user of a different payment processor that does charging,
| payouts, etc.
| mike_d wrote:
| It's not that simple. Charge backs are a game of hot potato
| originating at the card issuing bank and making its way
| back to the merchant.
|
| If Stripe instantly pays out funds to a merchant and there
| is a charge back, they have to claw that money back. This
| is normally done by drafting the funds from the deposit
| account, but if that is empty Stripe (or whatever
| processor) eats it and it becomes a collections issue.
|
| Processors normally handle this by holding funds on
| suspicious transactions for 180 days (the max chargeback
| window). What is suspicious? For most processors it is
| literally whatever adds up to a [fraud rate]% of your
| volume over a 180 day window. Stripe doesn't do this
| because they are "the friendly processor" so they just take
| a bigger slice and cover losses out of that.
|
| source: I spend a non-trivial amount of time monitoring
| threat actors and figuring out exactly how they are doing
| bad stuff, which means understanding the risk/abuse side of
| the house
| gnicholas wrote:
| Yeah I'm wondering why it's happening _now_. Is there an
| indication that fraud is going up, and that 's why they're
| raising the fee? Given the percentage increase, it would have
| to be a pretty dramatic increase.
| bitmasher9 wrote:
| I think "quarterly profits" is a perfectly acceptable
| answer to the question "why now."
| gnicholas wrote:
| Did they IPO when I wasn't looking? That is, what's
| different about this quarter versus last quarter? If the
| answer is "things are going worse this quarter than last
| quarter" then that's the nugget I was looking
| for/wondering about.
| Ekaros wrote:
| Maybe they are going for that or acquisition. In which
| case juicing up the numbers will make things look better.
| gnicholas wrote:
| Who would be in the market to acquire them? This is the
| sort of thing I was wondering about. I had heard they
| were planning to IPO for a while, and thought perhaps
| that 'optimizations' like this might be an indication
| that things were heating up.
| neurostimulant wrote:
| I imagine it's due to the increasing number of card-testing
| attacks which cost them money, increasing risk for instant
| payout.
| pentagrama wrote:
| A more honest title to me:
|
| Stripe increasing "instant payout" fees from 1% to 1.5% on US
|
| Current title:
|
| Stripe increasing "instant payout" fees by 50%
| epgui wrote:
| The current title is fine. It's a 50% increase (unambiguously),
| or a 0.5 percentage point increase (also unambiguously).
| sitzkrieg wrote:
| lets run away from math if it sounds bad!
| Gasp0de wrote:
| Ok so if something previously was free and now costs 1c per
| transaction, you would think "Stripe increasing price
| infinitely" would be a good title? Just because it is true
| that doesn't make it a good title. A good title should
| create a realistic expectation of the article content.
| Yujf wrote:
| No that would not be good. I agree that you should choose
| the correct way to represent something.
|
| But here a 50% increase creates a realistic expectation
| to me.
| pytness wrote:
| Using percentages as means of manipulating the masses has
| always been a thing.
|
| "There has been a 1000% increase in traffic deaths this year,
| we must do something!"
|
| Ah yes, we went from 1 death per year to 11 because there was
| a fatal bus accident, surely we need to do something.
| 0wez wrote:
| exactly. so tired of people saying: huehuehue this is correct,
| its just 50% comon bro the only reason i clicked is because i
| was like: wtf you need to pay 50% fee of the 100%?
|
| i dont care about anyone trying to say: huehehue thats how its
| written. no its not.
|
| but yeh i guess ppl rather focus on shitposts and talk
| endlessly
| 0wez wrote:
| and even on a hacker site its just a shame for ppl actually
| defending this title. its #1 phishing/SE method to trick
| people
| ggm wrote:
| Fees on payment methods are a good example of the kind of
| friction we wanted to get rid of, agreeing to use these
| intermediaries.
|
| If we've just replaced stupid inter-bank 3 day cheque clearing
| bullshit fees with stupid microtransaction fees which are
| variable at-will by the guy in the middle, whats the point?
|
| Money is regulated. Money flows should be regulated. This
| industry should be regulated, and the fees set to cost recovery,
| not profit point. If that reduces to one interchange agency per
| economy, I'd be fine: Nationalise them all.
|
| Does it cost the CPU more to process $1b in one transaction than
| to process 10c?
| encoderer wrote:
| Stripe will nickel and dime you to death.
|
| The last time I created an invoice manually it tried to upsell me
| on a far more expensive plan just so I can group things on an
| invoice. Even worse, adding a recurring product to a quote
| results in an upsell.
|
| It's honestly embarrassing. Feature-gating things with 0 marginal
| cost feels desperate.
| mysore wrote:
| welcome to every business in america.
| Animats wrote:
| 1.5% for a 2 day loan is an APR of what? More than 270%.
| wnc3141 wrote:
| In other news, the cost of no ey has increased several hundred
| percent since 2019.
| teddyX wrote:
| Payday loans are cheaper
| southernplaces7 wrote:
| Yawn. In some countries at least, (mine for example) Paypal does
| the same. If I get a payment (and let me add that I detest paypal
| but, such are the choices of some employers), I can wait 24 to 48
| hours for my money, or I can get it instantly at any time Monday
| to Friday between 6:15 am and 10 pm, but at an additional cost of
| roughly 3 dollars. Bear in mind that this is on top of their
| atrocious, thieving obligatory exchange rates and any other fees
| they tack onto payments sent to you.
|
| Of course I'm nearly certain that sending me that money instantly
| costs Paypal nothing, but enshittification creeps into all
| things, sort of like the dust created by dead skin and human
| trash. It permeates. Though in Paypal's case, shitty service has
| been a byword for decades already.
|
| Edit: when occasionally receiving payments in crypto on the other
| hand, I get charged minimal fees, can convert to my local
| currency at essentially market exchange rate, and can have the
| money transferred to my actual bank account at any time 24/7 for
| free. Yes yes, HN hates crypto and blah blah, but outside the
| bubble, there are people who find these things useful.
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