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Hello,
We’re writing to let you know that we’re making some changes to cross-border fees in Europe and the UK starting 1st July 2022.
Based on your Stripe transaction history, this change won’t impact [Company], and all other pricing will remain the same. You can review the most up to date fees for international transactions on our pricing page.
You can contact us, and find more details about this pricing update, managing or closing your account, or any other next steps, on our dedicated support page.
- The Stripe team
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Of course they don't actually mention what the changes are, but looking at the pricing page [0], it seems like there is now an additional 1.1% (making it 2.5% in total) for EU companies taking UK payments and for UK companies taking EU payments.
I imagine this is related to Visa and Mastercard price increases post-Brexit? [1]
[0] https://stripe.com/gb/pricing
[1] https://www.ft.com/content/4820b619-4d35-4c6a-8523-fc685c047...
That's because you are not affected by this changes. They are actually very transparent about it. In my case, since I do cross-border business, they've provided all the details in the email:
* * *
> As a result of the UK leaving the EU, major card networks now
> consider transactions between the UK and European Economic Area
> (EEA) to be cross-border. In light of this, we will be making some
> changes to fees between Europe and the UK on your account,
> starting 1 July 2022.
>
> Your current Stripe fees are:
>
> - 1.4% + £0.20 on card transactions for all of Europe, including the UK
> - 2.9% + £0.20 on international card transactions
>
> Your new Stripe fees will be:
>
> - 1.4% + £0.20 on domestic card transactions in the UK
> - 2.5% + £0.20 on card transactions between the UK and the EEA
> - 2.9% + £0.20 on other international card transactions
This is exactly the point of nationalistic policies. Make foreign trade more expensive and you're effectively subsidizing your national industries.
This reminds me of how the US spent 2 decades moving factories overseas while aiming at becoming a white collar economy. When the factory jobs did finally disappear, US politicians did the "Surprised Picachu" face at the situation they explicitly aimed at creating, and then successfully created.
To express this ironic economic situation in millennial: https://i.imgflip.com/6bhb1y.jpg
So stripe here would charge an EU card from its EU entity, US from the US, GB from GB etc etc, regardless of where the merchant is actually located. Maybe there is something fundamentally different with the workings of Visa / MC payments and clearing though that means this is not possible?
TransferWise also have larger profit margins than you think, both explicit and implicit by playing funny games cherry-picking rates etc.
So for both of the above reasons, this is why TransferWise can do what they do about giving people accounts cross-border. A lot (most) of it is legal flexibility, the rest is by eating the costs.
There are very few UK banks left that will give you a true EUR account.
Financial services were not part of the Brexit "deal". Which is why UK peeps can't open bank accounts in Europe and vice-versa, too many unaddressed regulatory issues.
Cross-border card fees may well be a similar kettle of fish to the phone roaming charges, i.e. there was protection under EU, but now the UK is outside of the EU it's dog eat dog.
Its a bit like why Amazon UK stopped accepting Visa for a while. Because post-Brexit Visa hiked their rates mostly just because they could.
I'm afraid that given the hard brexit that the UK government has chosen, the UK is only going to see a lot more of this. Brexit itself was bad enough, a dogged persuit of the hard form is, to put it politely, not exactly helping matters.
I'll be honest, it was a struggle to get a EUR account in the UK before Brexit. I'm not aware of any high street banks that offered it easily, although I have been told it is possible. Most said something along the lines of "you want the international version of our bank" which roughly means either Isle of Man, Channel Islands or Gibraltar established outfit with similar branding. In contrast, I have a EUR account in Switzerland and can easily get a USD or GBP one. Most
This is the least of your worries when selling globally. VAT is where the real fun starts.
Not really. The transaction happens on the country the merchant Operates.
If you are a merchant within the EU and stripe accepts a txn on your behalf, if that txn is from a card issued by a UK institution you will be charged the extra fee.
In order to achieve what parent said, the merchant will have to have a legal entity in every single country where they have customers in, and setup payment processing account within those jurisdiction.
So I am wonder at what sort of revenue does it make sense to do this. Assuming this process could somehow be automated / abstracted and the only cost are legal and accounting. ( i.e Cost that cant be avoided )
They do their best abstracting the country- and payment method specific stuff to make it easy for you to accept people's money, but not to shuffle it around countries.
Some services in each of these territories charge just the interchange fee.
Like: https://staxpayments.com/pricing/
https://www.adyen.com/blog/interchange-fees-explained
> On average, interchange fees are around 0.3-0.4% of the transaction amount in Europe and 2% in the US.
Snark aside, this will likely just be pushed forward to customers sadly. Combined with the ever increasing prices in the UK, this is will only exacerbate the issues.
The pricing has gone from a single rate for all EU+UK payments, to cross EU-UK being 0.9% more than intra-EU.
Inflation doesn't seem relevant. Whereas implementing a policy that makes international trade harder, with countries that were previously in the same trading bloc, seems entirely pertinent.
If the policy is working so well why not pursue the trend and put up more trade barriers to improve your economy.
Except whenever they mention their concerns it's usually a) wrong b) not relevant or c) missing the context of how modern commerce works. Just as the issue with Stripe payments show.
Just ask around how many people think Brexit would mean less south-asians in the UK. Or ask them where does their food comes from.
There's a difference between "caring" about something and thinking they have the best solutions for that.
It's maddening and on top of inflation, it's just another kick in the teeth.