Some European alternatives you might be able to find/negotiate better fees with:
- mollie (Netherlands)
- adyen (Netherlands)
- Klarna (Sweden)
- Paylike (Denmark)
- Mangopay (Luxembourg)
- Quickpay (Denmark) (added in edit)
The ones I've tried of those, have an OK development experience, maybe not as polished as Stripe, but much better than the alternatives that were around before Stripe (huge hassle back then). Ideally, you'll support at least two providers you can switch between, if you can afford the development of supporting two, as at one point or another, it'll save your ass or at least a bit of money as fee structures change between providers. It'll also be easier to integrate a third one in the future when you eventually find the perfect one (until they turn into the next Stripe).
> Dispute fees (also known as chargebacks) will increase from €15 to €20. Due to costs for managing dispute evidence submissions, we'll no longer refund this fee if the customer's bank resolves the dispute in your favor.
This strikes me as weird. User buys something from me, regrets it and issues a chargeback, dispute gets started and bank says I did nothing wrong, so the charge still sticks, but Stripe gets to keep the fee for handling the dispute?
Also, as far as I can understand https://stripe.com/docs/disputes/how-disputes-work, Stripe doesn't actually do anything manual in the process, it's all handled by the users bank or automatically by Stripe (notifications, taking fees and so on). So how it got more expensive for Stripe?
> This strikes me as weird. User buys something from me, regrets it and issues a chargeback, dispute gets started and bank says I did nothing wrong, so the charge still sticks, but Stripe gets to keep the fee for handling the dispute?
It's about risk. This requires time and effort to reconcile. Someone has to do something. The fee covers this. Does it suck? For you, sure. For the customer? No. It's peace of mind. It's why people willingly shop online. Don't like it? Negotiate your own terms with a bank for your own merchant account.
And yes the charge sticks. If you have 1000 purchases and all 1000 people dispute, that's a hassle the bank needs to deal with. Compared to someone with 1000 purchases with 1 dispute, even if that dispute is valid, it's much less work. Much less costly for the bank. So part of your responsibility as a merchant is to prevent that as much as possible.
> Stripe gets to keep the fee for handling the dispute?
No, the bank is keeping the money. Stripe had the money taken. This is passed on to you.
It is still weird and one-sided. Merchants are still being abused and in some cases that still causes them serious harm through no fault of their own. Unregulated chargebacks should still be legislated out of existence - preferably along with the whole anachronistic card payments system. It is still insane that so much everyday commerce relies on such an antiquated, dangerous, inefficient system in the 21st century.
So it's entirely reasonable for someone who isn't intimately familiar with how all of this actually works to be surprised by the situation and think it's broken. Because it is. It's not really Stripe's fault here though.
>This strikes me as weird. User buys something from me, regrets it and issues a chargeback, dispute gets started and bank says I did nothing wrong, so the charge still sticks, but Stripe gets to keep the fee for handling the dispute?
You should include this in your contract terms with the customer and collect the dispute fee from them.
It's not reasonable of you to expect Stripe to just absorb this cost.
> Ideally, you'll support at least two providers you can switch between, if you can afford the development of supporting two
It is however not that simple if you want to remember your customers payment information, and don’t want any PCI-DSS liability or obligations. You’ll need a card vaulting solution in the middle, which comes as additional burden (and cost!) on top of the other payment provider integration. There’s big volumes you need to process to offset all of this, and probably not ROI sensible for many.
Do you have any suggestion for "card vaulting providers"? This is interesting actually, store cards without PCI-DSS obligations and use those cards with the payment provider that makes the most sense at that point in time.
Even with a card vaulting solution I think it may be difficult to support more than one provider, at least for Visa and MasterCard, due to Visa's Stored Credentials Framework (SCF). SCF was a set of requirements for using stored cards that Visa originally announced would be required starting sometime around 2017, and MasterCard said they would adopt it too.
So many payment processors were going to fail to meet the deadline to implement it they moved it back a year. The main payment processor we use met that deadline and we started using it. But many others did not and it was pushed back another year. I'm not sure when it finally actually came into effect because I didn’t pay much attention after that.
Under SCF when you charge a card and intend to store that card you have to set a flag in the transaction signaling that intent. After the transaction you need to save the Visa or MasterCard assigned transaction ID.
Later, when you use the stored card there's flag you have to set that marks this transaction as using a stored card, a flag you have to set if the charge is merchant initiated (e.g., an automatic subscription renewal) rather than customer initiated (e.g., they order something from website and elect to put it on their on file card), and you have to provide the transaction ID of the transaction that was done when you first stored the card.
It's that prior transaction ID that is the problem. With many payment processors the transaction ID they give you is one they generate, not the one that Visa or MasterCard generates.
As part of implementing SCF those processors will remember the Visa or MasterCard transaction associated with transactions that had the "we are going to store this card" flag set, and so later when you use the stored card you just have to provide the transaction ID they gave you and they look up the Visa/MasterCard transaction ID to send to the card company.
So say you charge a new Visa card through provider X, setting the "we are going to store this card" flag. X gives you an X transaction number X-1234, which you remember, and X remembers that X-1234 means Visa transaction ID V918273.
A year later it is time to auto-renew that customer, and you want to do that through provider Y. But Y's interface expects a Y transaction ID. You can't give them X-1234 and have them do anything sensible with it.
As far as I can tell for many combinations of X and Y there is simply no way to do an on file charge at Y with a card that was put on file after an X transaction, except perhaps by at the time of the X transaction also doing something like a $1 authorize with Y and hoping that the Y transaction ID for that will work with Y for later doing an actual charge.
You need some way to get the Visa/MasterCard transaction ID, and you need X and Y to allow you to provide a Visa/MasterCard transaction ID for the SCF stuff.
It’s very normal. It’s why a lot of services immediately ban you for life if you ever issue a chargeback (regardless of validity).
Stripe was the sole sensible service out there (that I know of) where chargebacks wouldn’t hit a small business as hard as long as they could prove they were in the right.
But it seems Stripe is becoming everything it originally railed against.
> User buys something from me, regrets it and issues a chargeback, dispute gets started and bank says I did nothing wrong, so the charge still sticks, but Stripe gets to keep the fee for handling the dispute?
I am surprised how little Stripe charges. I processed close to 100MM since 2012 via different merchants, including Polcard, banks such as Harris, Wells, BOA, etc, and even 10 years ago typical fee was $35. And no, they never give you the fee back; if you win they give you the charge amount back, but the processing fee always remained with MSP.
On the upside, over the years credit cards vendors made it harder to file the dispute. Yes its easier to do it online with few clicks, but that's not a dispute yet. These days most people sit in banks and research into charge, including calling merchant, before they submit a CB with the card system.
Devils advocate: is dis-incentivises businesses that causes a lot of charge back requests even if those requests are ultimately unsuccessful.
There was a spate of people selling PS5 boxes on Ebay a while back. They clearly said PS5 "box" but the word box is small and surrounded by "New" "Unwanted gift" etc and priced at the RRP of a PS5. So people bought them and mistakenly thinking they were getting a PS5. Ebay ultimately banned such products (I believe). But I can see a payment provider wanting to dissuade crappy products with a lot of unhappy customers.
It would be nice if some services like Github Sponsor or Substack or Hashnode would allow different providers integration. Right now, Stripe dominates the market still.
I doubt any of those payment providers mentioned does not take the chargeback fee on a credit-card dispute.
Anyway, they might handle customer-communication with the merchant better.
Stripe offers nothing. If the customer could "contact" the seller, everyhting would work out better.
Just think - you have only 11 CHARS(!!!) to describe your service, thats what the customer sees on his monthyl CC bill. I am unable to describe it to everc customer in 11 chars, so 1 out of 1000 belives it was fraud because people do not remember what they bought online.
If I'm going to be charged 20 euros whether I succeed or not then for small disputes I may not bother spending the time to submit evidence anymore...
Edit:
I see that they have a Chargeback Protection product with costs 0.4% per transaction in which case they "cover the disputed amount and waive any dispute fees without needing to submit any evidence" (another comment by smca)... So cynically that sounds like a commercial tactic to sell that product!
The fee gets taken regardless. Also, too many disputes (guessing overturned disputes are calculated differently than uphold ones) can lead to further fines:
> If the dispute activity for your business exceeds the thresholds set by the networks for a prolonged period of time (usually multiple months), you might be subject to fines.
If you exceed dispute thresholds dictated by card networks, they can place you in a "dispute monitoring program".
The fines imposed can be very high if you don't take steps to mitigate disputes. We have a vested interest in ensuring businesses on Stripe aren't affected by these programs. https://stripe.com/docs/disputes/monitoring-programs
If a customer has already entered its credit card through Stripe for a recurring subscription, how do you migrate to another provider without asking again credit card?
Adyen is relatively solid if you know what you're doing, Mangopay felt like a small hippie solution in comparison.
The upside is Mangopay was pretty reactive when we needed a human to talk to, the downside being that many requests would just end in "tough luck, we're too smal for that"
No, they have to be with to a payment processor. But you can get a better deal than Stripe if you have a business mid-size and up. You can program that connection yourself, but honestly, if you are able to pull it off you will start selling that solution for a suitable price and that's where we are at today. And I think that is good.
The processor saves you significant effort for card transactions by simplifying your merchant relationship with the card processor. Technically, you can just talk directly to them over their API: https://developer.mastercard.com/apis
None of these services is Merchant of Record (that handles taxes). Neither is Stripe.
At this day and age, I don't understand why would any small to medium business that sells online internationally use anything else but Merchant of Records. International taxes are just a PITA that it's not worth trading a few percent of payment processor fee for a full-blown team of international tax accountants.
Something needs to change in the digital payments sector. 1.5% is ok-ish but 3.25% to accept foreign cards in the EU is a lot of money!
I understand that costs are higher when using credit cards because of the credit part that introduces risk, but in my case for example I have a debit card that runs also over Mastercard, so either I have the money or I don't. Why should a merchant be charged the same fee of using a real credit card if the risk is highly reduced?
I still don't understand why it is so hard to break the Visa/Mastercard duopoly on card payments. Why isn't there a standard for payments that banks can implement? Why are Visa/Mastercard/Amex required? SEPA in EU is already something but it is taking ages for it to become an actual payment platform in everyday's life.
India built rupay, an alternative to visa and mastercard which has 0 charge to merchants. It is expanding internationally and works in neighboring countries.
Aside from this, most local payments happen over UPI so they cost 0 as well.
Visa and mastercard usage is declining in India since a few years despite rapid increase in digital adoption. Government banned master card, diners, express, etc issuance for not complying with local data storage rules for over a year and it did not impact much.
I think the solution is to run payment infrastructure at public level like many countries have done in Asia.
This is exactly what I mean and what I would like to see in the EU. I think the digital Euro is meant to be something similar but it is still vaporware ATM.
The problem with SEPA payment, is that it's great for the merchant and a net loss for the user, especially individual consumers.
From a UX perspective today, it will always be more cumbersome to initiate a SEPA transfer to the merchant. Some integrations offer a semblance of interactivity with your banking app in an attempt to streamline it, but nothing beats the simplicity entering your cards details or just showing your face to Apple pay. Then from a consumer protection perspective, if something wrong happen with your order or the merchant goes bust, you have no recourse if you initiated a SEPA CT. Card payments on the other hand give you a nice chain of large entities exposing themselves to the merchant's credit risk in front of you.
It can probably work in specific situations (e.g. if you have a niche website with a sophisticated audience ready to overcome the hurdles to acquire your widgets), but for these reasons alone I just can't see SEPA payments going anywhere near even a ridicule fraction of the market share held by legacy card networks yet.
There are multiple types of SEPA payments, I think you're talking about SEPA Credit Transfer (essentially making the bank transfer yourself).
On the other hand, for SEPA Direct Debit, not only is the interface quite reasonable (you enter your IBAN and confirm a mandate), but consumer protection is very high. You can chargeback no questions asked for 8 weeks, it will be immediately accepted and the merchant can't do anything about it. And as a customer, besides the 8 weeks no questions asked policy, you have 13 months to ask for a refund of an unauthorised transaction, with supporting evidence. In practice, the bank will always accept such a request too.
This. I would never do a SEPA payment vs a credit card transaction unless there's a significant advantage to me as a user to go with SEPA. And the merchant can't give me a discount for using a specific payment which is not allowed under EU rules, so there's not much the merchant can do there.
SEPA Direct Debit has pretty good UX, I find. Just enter the bank account number, accept terms, done. In theory it's a bit more complicated as for B2C you're supposed to collect a real signature (which no one does) and for B2B there are additional rules (which most merchants also ignore), but in practice it works reasonably well. B2B SEPA direct debit is also much better for the merchant as money that has been successfully transferred cannot be refunded, unlike credit card payments where you can get chargebacks for 120 days...
In Finland with my fairly large bank the barrier is pretty much same if the card isn't already saved. Actually SEPA is easier as I only need to log in and confirm instead of having to provide CC details and log in to confirm the transfer.
It's the chicken and egg problem... If you started a new card provider today, you'd need to get consumers onboard, banks onboard, merchants onboard, and every card machine in the world replaced to accept your new card type.
The closest we get to that is loyalty cards and gift cards that only work in one shop. Some of those have managed to be compatible with a few shops, but nowhere near what would be needed for a consumer to consider it a replacement for visa.
I totally understand you and you are perfectly right IMHO. This is why I don't understand why isn't there a payment standard, we are in 2023 already, the economic burden of keeping fattening those "old-school" card networks is absurd, it is billions and billions of dollars each year.
Lobbying is the only reason I see that keeps a payment standard from being implemented.
One funny thing is that some card transactions (e.g. contactless payments without PIN entry over 100€ for at least one payment processor, needs to be enabled by the merchant) actually don't go trough Visa/Mastercard but are already done via SEPA.
> SEPA in EU is already something but it is taking ages for it to become an actual payment platform in everyday's life.
Is there anything stopping merchants from offering different prices to people based on different payment methods?
I assume the reason merchants do not list a discount for paying via SEPA or ACH or debit card or whatever local non credit card (and non Visa/Amex/MC) option, is because merchants benefit from the higher prices that people are willing to pay when using credit cards (compared to the cost of accepting credit cards).
In the US, Target is the only big retailer I know that discounts for using ACH (debiting directly from bank account). They give 5% off.
In some countries it is illegal to charge different prices based on which payment method is used.
Here in Italy for example there is a lot of discussion around this topic now that most stores are legally bound to accept digital payments but cannot charge a different price if you pay with card instead of cash.
I think this indirectly happens. I live in Haarlem, Netherlands, and some popular supermarkets in my area would not accept a VISA/Mastercard. They only accept Maestro(Which I think is cheaper for them because it is a debit card that Dutch banks give out). I found it surprising because that should mean they lose out on some business from so many expats that visit/live in Netherlands, but apparently not.
> Is there anything stopping merchants from offering different prices to people based on different payment methods?
Yes, it is usually not allowed in your contract with the card payment providers. If you start doing it anyway - as some do - you risk them terminating the contract.
As far as I understand, you can payout in USD on a EEA domiciled account, and you won’t be incurring any fees.
It’s the crossborder settlement which they charge for, which I don’t think is crazy, as it just reflects the underlying costs Stripe must be incurring themselves.
As someone who ran a business in multiple countries, the bank always charged similar fees for these transfers between accounts. Stripe letting me settle directly in the account where I want the money to land, rather than me having to log in to my bank and initiating a transfer manually where fees are ~the same is definitely a better option, which I’m happy they offer.
1% is enormous for this. I think the cost of a SWIFT transfer is maybe $3 to them, regardless of amount. If you're doing $100k/month of USD sales and payout once a week, it is a huge markup.
They are clearly losing money on their (really expensive) forex fees so are trying to recoup this by this payment.
There is no intrinsic reason I see why the fees are so high for this.
Edit to add: they actually use ACH for US bank USD payouts, so even less cost than SWIFT.
This was previously not possible but looks like they have allowed it now. That is the reason why I had a US USD account in the first place, for Stripe USD payouts. They did not allow USD payouts to any European accounts last time I checked a few years ago, only to US accounts.
The 1% is for all non local currency payouts. Example: "The primary currency for Stripe accounts in France is EUR. All other currencies fall under alternative currencies." "1% Of the payout amount, when you choose to payout in select alternative currencies." Ref https://stripe.com/docs/payouts/alternative-currencies
So basically this will result in very expensive payouts for anyone doing USD charges outside US or EUR charges outside Europe. Like many SaaS companies are. Charging any other currency is problematic for many customers so it is not really an option. Like I don't want to be charged in pesos for a SaaS that I am using.
The alternative is to have Stripe convert USD to my local currency. For a small 2% fee.
This has also been the case in Australia since Stripe added the ability to pay out to a USD account last year.
I was excited to ditch the 2% currency conversion fee - nope, just reduced to 1%. For what? A currency conversion fee can be somewhat defended, or, at the very least, “everyone else does it”...
Now I want my funds in the same currency you accepted them, and I have to pay for the privilege?
For non-us citizens, USD's either incur a conversation fee to another currency, or an international withdrawal fee. There is no way to get money out without paying one or other fee.
Took me years to find out how they're scamming me on the conversion charges/exchange rate.
Say you want to buy product in USD, and you come from non-USA country. Paypal would "helpfully" convert USD to your local currency using their own exchange rate (worse than any other one - goes without saying), charge the linked bank account (which probably is in USD anyway, to avoid paying for conversion fees), then the local bank would charge you again by converting the payment from the local currency to say USD because the account is in USD. Those practices probably cost me thousands over the years until I've figured out what was happening.
I've turned on the option (intentionally buried and difficult to find) that tells Paypal to charge me in the currency I've was purchasing (USD), and not to do the conversion. But the fuckers had a habit of flipping that option so you're caught off guard. Needless to say, been Paypal-free for years now. One can imagine how much Paypal and banks profit from this scammy/dark-pattern behaviour on a global scale.
> payouts will be higher due to increases in network costs (in recent years, major card networks have introduced several new fees and increased existing fees), as well as increases in underlying service costs.
Can someone from the industry offer more colour on what this actually means?
It strikes me that pricing for companies like Stripe should go down, not up in the long run. They're fairly well insulated from inflation (as pricing is % of transaction value), so the only reason I can think of for price _increases_ would be increased regulatory burden or some sort of structural industry change.
The vagueness with which Stripe justifies the price increase makes me think this is not supported by actual cost increases, but by a desire to increase profits. (which, hey, if you can put prices up and customers won't leave, then great - but it would be good to know the actual reason)
Banks starting to charge more for (crossborder) transfer, Visa/MC charge more for tokenized card payments, which they mandate adoption of, and most likely more of this.
At first I thought, "well, inflation is affecting everyone." Then I realized if prices are going up due to inflation, Stripe's collected fees go up anyway. So now they're benefitting to the second degree with a higher percentage of already inflating revenues ;-) We'll put up our prices more to counteract it, and on it goes.
It's not a terrible deal even at this level. We routinely see 4-5% creamed off the top of wire transfers we receive from the US through exchange rate variations, random bank fees, etc. It's the cost of doing global business for us.
> We routinely see 4-5% creamed off the top of wire transfers we receive from the US through exchange rate variations, random bank fees, etc.
Hmm, I'm in the UK, and the variance in currerncy exchange we see is usually 2.4% in the bank's favour, usually with an additional fixed fee of £20. 5% sounds like madness!
For EU bank transfers, it's more like a 2% exchange variance, with zero fixed fee... so Stripe is now looking expensive, at least for our UK and EU payments :(
Hmm, I'm in the UK, and the variance in currerncy exchange we see is usually 2.4% in the bank's favour, usually with an additional fixed fee of £20. 5% sounds like madness!
I'm including variance from HMRC's published rates as well, so that can be a few percent on its own if the USDGBP shifted. We do find that some customers are worse than others though. I suspect some use local banks and are eating fees along the route and it all adds up. With some customers we get every single penny expected. Wire transfers seem to be quite messy and unpredictable compared to card payments.
And what's this new nonsense about increased costs for "premium" cards?
From here[0], it describes these cards as "Commercial, corporate, or business cards issued by Visa and Mastercard" - but why would Stripe charge more for the use of such cards? Surely the chargeback rate for businesses must be orders of magnitude lower than that of consumer cards?
Isn't it the case that these 'premium' cards usually require full balance settlement each month? In which case there is no opportunity for the card issuer to earn interest on outstanding balances as there is with personal credit cards so the card issuers add the 'lost' income to the transaction fee?
3.25% for USD card for EU business + 0.5% for stripe tax + 0.4% for invoice + 0.5% for stripe checkout. It really adds up!
MasterCard and Visa are mostly to blame here. They haven't innovated at all in the past 30 years and the fees they charge are wildly out of balance with the service they provide. They're awful, and I can't wait to see these credit card companies crash and burn when they get some real competition.
MasterCard and Visa as long as keep their moat, they don't need to innovate. Big companies like that will not innovate enough to make fees low. Yearly operating expenses of VISA as a company is nearly $10B with a net income of almost $15B. Not hard to make the math how fees just make the income and moat bigger.
We use Wise but their USD accounts are US-domiciled. So we have 3 options:
- Continue paying out to Wise and incur an additional 1% fee (~$30k per year)
- Use Stripe for currency conversion which is additional 2% fee (~$60k per year
- Find a UK-domiciled USD account to pay out to. Might be possible - no idea really. Need to look into it.
Readit News
- mollie (Netherlands)
- adyen (Netherlands)
- Klarna (Sweden)
- Paylike (Denmark)
- Mangopay (Luxembourg)
- Quickpay (Denmark) (added in edit)
The ones I've tried of those, have an OK development experience, maybe not as polished as Stripe, but much better than the alternatives that were around before Stripe (huge hassle back then). Ideally, you'll support at least two providers you can switch between, if you can afford the development of supporting two, as at one point or another, it'll save your ass or at least a bit of money as fee structures change between providers. It'll also be easier to integrate a third one in the future when you eventually find the perfect one (until they turn into the next Stripe).
> Dispute fees (also known as chargebacks) will increase from €15 to €20. Due to costs for managing dispute evidence submissions, we'll no longer refund this fee if the customer's bank resolves the dispute in your favor.
This strikes me as weird. User buys something from me, regrets it and issues a chargeback, dispute gets started and bank says I did nothing wrong, so the charge still sticks, but Stripe gets to keep the fee for handling the dispute?
It's about risk. This requires time and effort to reconcile. Someone has to do something. The fee covers this. Does it suck? For you, sure. For the customer? No. It's peace of mind. It's why people willingly shop online. Don't like it? Negotiate your own terms with a bank for your own merchant account.
And yes the charge sticks. If you have 1000 purchases and all 1000 people dispute, that's a hassle the bank needs to deal with. Compared to someone with 1000 purchases with 1 dispute, even if that dispute is valid, it's much less work. Much less costly for the bank. So part of your responsibility as a merchant is to prevent that as much as possible.
> Stripe gets to keep the fee for handling the dispute?
No, the bank is keeping the money. Stripe had the money taken. This is passed on to you.
Seriously, this is payment processing 101.
It is still weird and one-sided. Merchants are still being abused and in some cases that still causes them serious harm through no fault of their own. Unregulated chargebacks should still be legislated out of existence - preferably along with the whole anachronistic card payments system. It is still insane that so much everyday commerce relies on such an antiquated, dangerous, inefficient system in the 21st century.
So it's entirely reasonable for someone who isn't intimately familiar with how all of this actually works to be surprised by the situation and think it's broken. Because it is. It's not really Stripe's fault here though.
You should include this in your contract terms with the customer and collect the dispute fee from them.
It's not reasonable of you to expect Stripe to just absorb this cost.
What are you going to do, sue over 20 euro?
It is however not that simple if you want to remember your customers payment information, and don’t want any PCI-DSS liability or obligations. You’ll need a card vaulting solution in the middle, which comes as additional burden (and cost!) on top of the other payment provider integration. There’s big volumes you need to process to offset all of this, and probably not ROI sensible for many.
So many payment processors were going to fail to meet the deadline to implement it they moved it back a year. The main payment processor we use met that deadline and we started using it. But many others did not and it was pushed back another year. I'm not sure when it finally actually came into effect because I didn’t pay much attention after that.
Under SCF when you charge a card and intend to store that card you have to set a flag in the transaction signaling that intent. After the transaction you need to save the Visa or MasterCard assigned transaction ID.
Later, when you use the stored card there's flag you have to set that marks this transaction as using a stored card, a flag you have to set if the charge is merchant initiated (e.g., an automatic subscription renewal) rather than customer initiated (e.g., they order something from website and elect to put it on their on file card), and you have to provide the transaction ID of the transaction that was done when you first stored the card.
It's that prior transaction ID that is the problem. With many payment processors the transaction ID they give you is one they generate, not the one that Visa or MasterCard generates.
As part of implementing SCF those processors will remember the Visa or MasterCard transaction associated with transactions that had the "we are going to store this card" flag set, and so later when you use the stored card you just have to provide the transaction ID they gave you and they look up the Visa/MasterCard transaction ID to send to the card company.
So say you charge a new Visa card through provider X, setting the "we are going to store this card" flag. X gives you an X transaction number X-1234, which you remember, and X remembers that X-1234 means Visa transaction ID V918273.
A year later it is time to auto-renew that customer, and you want to do that through provider Y. But Y's interface expects a Y transaction ID. You can't give them X-1234 and have them do anything sensible with it.
As far as I can tell for many combinations of X and Y there is simply no way to do an on file charge at Y with a card that was put on file after an X transaction, except perhaps by at the time of the X transaction also doing something like a $1 authorize with Y and hoping that the Y transaction ID for that will work with Y for later doing an actual charge.
You need some way to get the Visa/MasterCard transaction ID, and you need X and Y to allow you to provide a Visa/MasterCard transaction ID for the SCF stuff.
It’s very normal. It’s why a lot of services immediately ban you for life if you ever issue a chargeback (regardless of validity).
Stripe was the sole sensible service out there (that I know of) where chargebacks wouldn’t hit a small business as hard as long as they could prove they were in the right.
But it seems Stripe is becoming everything it originally railed against.
Easier to just lifeban every customer that does a chargeback vs spend 10 hours dealing with stripe + bank, and still losing, no matter the reason.
I am surprised how little Stripe charges. I processed close to 100MM since 2012 via different merchants, including Polcard, banks such as Harris, Wells, BOA, etc, and even 10 years ago typical fee was $35. And no, they never give you the fee back; if you win they give you the charge amount back, but the processing fee always remained with MSP.
On the upside, over the years credit cards vendors made it harder to file the dispute. Yes its easier to do it online with few clicks, but that's not a dispute yet. These days most people sit in banks and research into charge, including calling merchant, before they submit a CB with the card system.
There was a spate of people selling PS5 boxes on Ebay a while back. They clearly said PS5 "box" but the word box is small and surrounded by "New" "Unwanted gift" etc and priced at the RRP of a PS5. So people bought them and mistakenly thinking they were getting a PS5. Ebay ultimately banned such products (I believe). But I can see a payment provider wanting to dissuade crappy products with a lot of unhappy customers.
Anyway, they might handle customer-communication with the merchant better.
Stripe offers nothing. If the customer could "contact" the seller, everyhting would work out better.
Just think - you have only 11 CHARS(!!!) to describe your service, thats what the customer sees on his monthyl CC bill. I am unable to describe it to everc customer in 11 chars, so 1 out of 1000 belives it was fraud because people do not remember what they bought online.
If I'm going to be charged 20 euros whether I succeed or not then for small disputes I may not bother spending the time to submit evidence anymore...
Edit: I see that they have a Chargeback Protection product with costs 0.4% per transaction in which case they "cover the disputed amount and waive any dispute fees without needing to submit any evidence" (another comment by smca)... So cynically that sounds like a commercial tactic to sell that product!
> If the dispute activity for your business exceeds the thresholds set by the networks for a prolonged period of time (usually multiple months), you might be subject to fines.
https://stripe.com/docs/disputes/measuring
The fines imposed can be very high if you don't take steps to mitigate disputes. We have a vested interest in ensuring businesses on Stripe aren't affected by these programs. https://stripe.com/docs/disputes/monitoring-programs
Stripe locked us in.
PAN Migrations.
https://stripe.com/docs/account/data-migrations/pan-export
Different payment providers also can help you with the import, here is an example on how to import data from Stripe to Adyen:
https://docs.adyen.com/development-resources/migrating-payme...
> If you decide to leave Stripe for another payment processor, we’ll work with your new processor’s team to securely transfer your credit card data.
You're not locked in. People migrate off Stripe all the time.
The upside is Mangopay was pretty reactive when we needed a human to talk to, the downside being that many requests would just end in "tough luck, we're too smal for that"
We ended up moving to Adyen for that reason.
Erm, isn't Klarna a BNPL company ?
Important not to conflate BNPL with merchant services (card payments).
e.g. Sofort is run by Klarna for some reason - https://www.klarna.com/pay-now/business/merchant-support/wha...
So it seems conceivable that they have options to process regular card payments too
Actually, I can find several emails that say something along the lines of "Klarna - Card payment" or "Klarna Checkout". Never done BNPL.
From memory they have legal obligation to open an API and give access, but no real penalty if it doesn't work or is utterly garbage or impractical.
At this day and age, I don't understand why would any small to medium business that sells online internationally use anything else but Merchant of Records. International taxes are just a PITA that it's not worth trading a few percent of payment processor fee for a full-blown team of international tax accountants.
I understand that costs are higher when using credit cards because of the credit part that introduces risk, but in my case for example I have a debit card that runs also over Mastercard, so either I have the money or I don't. Why should a merchant be charged the same fee of using a real credit card if the risk is highly reduced?
I still don't understand why it is so hard to break the Visa/Mastercard duopoly on card payments. Why isn't there a standard for payments that banks can implement? Why are Visa/Mastercard/Amex required? SEPA in EU is already something but it is taking ages for it to become an actual payment platform in everyday's life.
Aside from this, most local payments happen over UPI so they cost 0 as well.
Visa and mastercard usage is declining in India since a few years despite rapid increase in digital adoption. Government banned master card, diners, express, etc issuance for not complying with local data storage rules for over a year and it did not impact much.
I think the solution is to run payment infrastructure at public level like many countries have done in Asia.
Thanks for sharing!
From a UX perspective today, it will always be more cumbersome to initiate a SEPA transfer to the merchant. Some integrations offer a semblance of interactivity with your banking app in an attempt to streamline it, but nothing beats the simplicity entering your cards details or just showing your face to Apple pay. Then from a consumer protection perspective, if something wrong happen with your order or the merchant goes bust, you have no recourse if you initiated a SEPA CT. Card payments on the other hand give you a nice chain of large entities exposing themselves to the merchant's credit risk in front of you.
It can probably work in specific situations (e.g. if you have a niche website with a sophisticated audience ready to overcome the hurdles to acquire your widgets), but for these reasons alone I just can't see SEPA payments going anywhere near even a ridicule fraction of the market share held by legacy card networks yet.
On the other hand, for SEPA Direct Debit, not only is the interface quite reasonable (you enter your IBAN and confirm a mandate), but consumer protection is very high. You can chargeback no questions asked for 8 weeks, it will be immediately accepted and the merchant can't do anything about it. And as a customer, besides the 8 weeks no questions asked policy, you have 13 months to ask for a refund of an unauthorised transaction, with supporting evidence. In practice, the bank will always accept such a request too.
1. Click "Pay with Mobilepay"
2. Enter phone number, or confirm it if if the merchant already knows this
3. Press notification on phone, fingerprint, and swipe right to approve.
I'm not sure how this appears to the business, but to me it looks like any other payment or transfer on my bank statement.
The closest we get to that is loyalty cards and gift cards that only work in one shop. Some of those have managed to be compatible with a few shops, but nowhere near what would be needed for a consumer to consider it a replacement for visa.
Lobbying is the only reason I see that keeps a payment standard from being implemented.
Is there anything stopping merchants from offering different prices to people based on different payment methods?
I assume the reason merchants do not list a discount for paying via SEPA or ACH or debit card or whatever local non credit card (and non Visa/Amex/MC) option, is because merchants benefit from the higher prices that people are willing to pay when using credit cards (compared to the cost of accepting credit cards).
In the US, Target is the only big retailer I know that discounts for using ACH (debiting directly from bank account). They give 5% off.
Here in Italy for example there is a lot of discussion around this topic now that most stores are legally bound to accept digital payments but cannot charge a different price if you pay with card instead of cash.
https://europa.eu/youreurope/citizens/consumers/shopping/pri...
Yes, it is usually not allowed in your contract with the card payment providers. If you start doing it anyway - as some do - you risk them terminating the contract.
I think there's an EU rule about that. I've seen a business (justeat) charge a card-processing fee for cash-on-delivery orders.
Deleted Comment
https://nordicpayments.eu/
Ethereum solves this, just use stablecoins
This is absurd. A 1% fee to transfer USD to a USD bank account?
The alternative is to charge in another currency - which Stripe will put a 2% currency fee on.
This is already on top of their expensive transaction costs.
Will actively look for alternatives now.
It’s the crossborder settlement which they charge for, which I don’t think is crazy, as it just reflects the underlying costs Stripe must be incurring themselves.
As someone who ran a business in multiple countries, the bank always charged similar fees for these transfers between accounts. Stripe letting me settle directly in the account where I want the money to land, rather than me having to log in to my bank and initiating a transfer manually where fees are ~the same is definitely a better option, which I’m happy they offer.
They are clearly losing money on their (really expensive) forex fees so are trying to recoup this by this payment.
There is no intrinsic reason I see why the fees are so high for this.
Edit to add: they actually use ACH for US bank USD payouts, so even less cost than SWIFT.
The 1% is for all non local currency payouts. Example: "The primary currency for Stripe accounts in France is EUR. All other currencies fall under alternative currencies." "1% Of the payout amount, when you choose to payout in select alternative currencies." Ref https://stripe.com/docs/payouts/alternative-currencies So basically this will result in very expensive payouts for anyone doing USD charges outside US or EUR charges outside Europe. Like many SaaS companies are. Charging any other currency is problematic for many customers so it is not really an option. Like I don't want to be charged in pesos for a SaaS that I am using.
The alternative is to have Stripe convert USD to my local currency. For a small 2% fee.
People from Stripe will probably appear in this discussion any moment now. It’ll be interesting seeing them try to explain this one.
I was excited to ditch the 2% currency conversion fee - nope, just reduced to 1%. For what? A currency conversion fee can be somewhat defended, or, at the very least, “everyone else does it”...
Now I want my funds in the same currency you accepted them, and I have to pay for the privilege?
For non-us citizens, USD's either incur a conversation fee to another currency, or an international withdrawal fee. There is no way to get money out without paying one or other fee.
Say you want to buy product in USD, and you come from non-USA country. Paypal would "helpfully" convert USD to your local currency using their own exchange rate (worse than any other one - goes without saying), charge the linked bank account (which probably is in USD anyway, to avoid paying for conversion fees), then the local bank would charge you again by converting the payment from the local currency to say USD because the account is in USD. Those practices probably cost me thousands over the years until I've figured out what was happening.
I've turned on the option (intentionally buried and difficult to find) that tells Paypal to charge me in the currency I've was purchasing (USD), and not to do the conversion. But the fuckers had a habit of flipping that option so you're caught off guard. Needless to say, been Paypal-free for years now. One can imagine how much Paypal and banks profit from this scammy/dark-pattern behaviour on a global scale.
Can someone from the industry offer more colour on what this actually means?
It strikes me that pricing for companies like Stripe should go down, not up in the long run. They're fairly well insulated from inflation (as pricing is % of transaction value), so the only reason I can think of for price _increases_ would be increased regulatory burden or some sort of structural industry change.
The vagueness with which Stripe justifies the price increase makes me think this is not supported by actual cost increases, but by a desire to increase profits. (which, hey, if you can put prices up and customers won't leave, then great - but it would be good to know the actual reason)
It's not a terrible deal even at this level. We routinely see 4-5% creamed off the top of wire transfers we receive from the US through exchange rate variations, random bank fees, etc. It's the cost of doing global business for us.
Hmm, I'm in the UK, and the variance in currerncy exchange we see is usually 2.4% in the bank's favour, usually with an additional fixed fee of £20. 5% sounds like madness!
For EU bank transfers, it's more like a 2% exchange variance, with zero fixed fee... so Stripe is now looking expensive, at least for our UK and EU payments :(
I'm including variance from HMRC's published rates as well, so that can be a few percent on its own if the USDGBP shifted. We do find that some customers are worse than others though. I suspect some use local banks and are eating fees along the route and it all adds up. With some customers we get every single penny expected. Wire transfers seem to be quite messy and unpredictable compared to card payments.
And what's this new nonsense about increased costs for "premium" cards?
From here[0], it describes these cards as "Commercial, corporate, or business cards issued by Visa and Mastercard" - but why would Stripe charge more for the use of such cards? Surely the chargeback rate for businesses must be orders of magnitude lower than that of consumer cards?
https://support.stripe.com/questions/what-s-the-difference-b...
Processing a "Visa Infinite Business Credit" @ 1.5% would lose them money.
Commercial card fees are not capped and are more around 1.5% to 2.0%
If anything, now that they have split consumer and commercial cards in their fees, it's the consumer card fees that are shockingly high.
MasterCard and Visa are mostly to blame here. They haven't innovated at all in the past 30 years and the fees they charge are wildly out of balance with the service they provide. They're awful, and I can't wait to see these credit card companies crash and burn when they get some real competition.
So if we get paid out a USD payment, into a USD account. We get charged just because we're registered in the UK? That's a huge impact on our business.
If you have a bank account in another currency, you’ll be charged a 2% currency conversion fee from USD to your currency.