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Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

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Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#41

Post by radicalbyte »

solardev wrote: post #34
comprev wrote: post #31

Earlier quoted context omitted.

iDEAL in the Netherlands is an instant credit from your account directly into the receivers. The KYC part has already been handled by your bank.

So basically, if you use that to buy something, you have no post-purchase protections from the payment provider itself (chargebacks, extended warranties, price protections, etc.?) like the kind credit cards will often provide?

In a very limited form only. The fees are very low though. You still have all of your legal rights etc so as long as the retailer / manufacturer stays in business you get the warranty etc (EU law gives a warranty on "expected lifetime" but many try to limit that to 2 years - you have to sue to get more).

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#42

Post by darth_avocado »

oldprogrammer2 wrote: post #9

Stripe, Block, and PayPal each solved a massive pain point. PayPal provided a way to pay people and vendors without giving away your credit card number. Square made it easy to accept payment in person on a phone, without an extensive upfront underwriting experience and without expensive fixed monthly fees. Stripe did the same as Square, but for accepting online payments. Fraud and Risk come in many forms, and these p…

And the value prop isn’t just the payments. Once you add things like inventory management, front/back of the house integration, taxes and a bunch of other things, you’re simplifying a lot of things for the business at a lower cost than having them pay for every one of those things.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#43

Post by alwa »

Alcatros552 wrote: post #10

I can tell you it isn't difficult to build something like they have. The issue is more likely to get banks onboard to issue cards/payment instruments for your unknown payment network which has no terminals, the barrier to entry is very high.

Isn’t the second part—getting counterparties to trust you—an essential part of building something like they have?

I’m reminded of the old joke about the tech who thumps a machine to fix it, then sends a $5000 bill. $5 for coming out and thumping, $4995 for knowing where to thump.

Maybe instead of “3% to update some tables in a money database,” it’s more properly “.001% for the database update, 2.999% for being trustworthy enough that everyone is willing to trade goods and services on the strength of our promise that they’ll get paid”

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#44

Post by popcalc »

solardev wrote: post #34
comprev wrote: post #31

Earlier quoted context omitted.

iDEAL in the Netherlands is an instant credit from your account directly into the receivers. The KYC part has already been handled by your bank.

So basically, if you use that to buy something, you have no post-purchase protections from the payment provider itself (chargebacks, extended warranties, price protections, etc.?) like the kind credit cards will often provide?

Blik in Poland is another example. Every single domestic bank supports it. Marketplaces like OLX (Polish ebay) will sometimes offer a moneyback guarantee for a small percentage of the transaction amount. You can use the same system to pay at the grocery store or the local doner kebab place. We’ve been using cash for far longer than credit cards.

And in the EU if you’re buying new physical goods online the merchant is required to give you a week or two to return it for free.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#46

Post by SoftTalker »

xyst wrote: post #18

> In total these companies have profit in double digit billions If you think about it. Stripe, Block, PayPal only exist because of credit card networks (Visa, Mastercard, American Express, JCB, Discover) and issuing banks (JPM, WF, BoA, foreign banks). Those last two groups of entities have such terrible integrations/interfaces and fail to improve due to their oligopoly on the entire process of facilitating buyer and…

Yeah I'm a big fan of cash but do you remember the days when that's all there really was? You had to go the bank every week to get it. There was risk of theft or loss for both individuals and businesses.

You could write personal checks, but not every business accepted them and if you were a business there was a period of days, sometimes weeks where you didn't know if a payment was good. I did pizza delivery in the 1980s, we accepted cash or check and I would guess about 1 in 10 checks were no good. That's a huge loss to absorb. And drivers would make occasional mistakes handling cash.

I remember when Visa and Mastercard started to get popular and widely accepted. Before that you had store credit cards, gas station credit cards, you were carrying around maybe half a dozen different cards just to do your normal purchases, or you were writing checks everywhere. e-commerce didn't exist yet but it would never have been possible paying by cash or check.

Visa/MC and later Paypal, Stripe, etc. solved real problems and provided real conveniences. That's worth something.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#47

Post by _heimdall »

solardev wrote: post #34
comprev wrote: post #31

Earlier quoted context omitted.

iDEAL in the Netherlands is an instant credit from your account directly into the receivers. The KYC part has already been handled by your bank.

So basically, if you use that to buy something, you have no post-purchase protections from the payment provider itself (chargebacks, extended warranties, price protections, etc.?) like the kind credit cards will often provide?

Correct, systems like iDeal intentionally don't support charge backs [1].

I believe the argument is that as long as they can ensure all transactions are secure and can only be initialized by those with access to the bank account, there shouldn't be a need for charge backs.

[1] https://www.mollie.com/growth/how-ideal-payment-method-works

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#48

Post by BeetleB »

thesausageking wrote: post #39
oldprogrammer2 wrote: post #9

Stripe, Block, and PayPal each solved a massive pain point. PayPal provided a way to pay people and vendors without giving away your credit card number. Square made it easy to accept payment in person on a phone, without an extensive upfront underwriting experience and without expensive fixed monthly fees. Stripe did the same as Square, but for accepting online payments. Fraud and Risk come in many forms, and these p…

The challenger to these will solve for a different problem. Not every transaction needs complex fraud detection or being able for the customer do to chargebacks. For a 3% discount, would customers agree to use something that worked just like cash, where the transfer was instant and couldn't be undone? Then you don't have to worry about fraud, chargebacks, etc.

> For a 3% discount,

It is fantasy to think they'd get a 3% discount. The goods in stores that take only cash do not tend to be cheaper than those that do.

They know what people are willing to pay and will charge the price. If they see people are willing to pay $99 with a credit card, then they'll be willing to pay that with cash.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#49

Post by [deleted] »

_heimdall wrote: post #47
solardev wrote: post #34

Earlier quoted context omitted.

So basically, if you use that to buy something, you have no post-purchase protections from the payment provider itself (chargebacks, extended warranties, price protections, etc.?) like the kind credit cards will often provide?

Correct, systems like iDeal intentionally don't support charge backs [1]. I believe the argument is that as long as they can ensure all transactions are secure and can only be initialized by those with access to the bank account, there shouldn't be a need for charge backs. [1] https://www.mollie.com/growth/how-ideal-payment-method-works

[deleted]

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#50

Post by Aachen »

solardev wrote: post #34
comprev wrote: post #31

Earlier quoted context omitted.

iDEAL in the Netherlands is an instant credit from your account directly into the receivers. The KYC part has already been handled by your bank.

So basically, if you use that to buy something, you have no post-purchase protections from the payment provider itself (chargebacks, extended warranties, price protections, etc.?) like the kind credit cards will often provide?

I never needed any of these things in the EEA

When I wasn't happy with a product, I either used the warranty or (mandatory) 14-day return option depending on the reason why the product wasn't conforming expectations

Perhaps warranty extras are more relevant outside of the EU where warranty laws may be less strict? How even does a payment system do warranty, it knows nothing of the product?

And what is price protection, it sounds like merchants would draw more from the account than you authorised? How would that even work? With iDeal at least, you approve a certain amount for a certain merchant (displayed on a second-factor device so it's not impacted by phishing) and they cannot later charge you more

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