Instant Payouts for Marketplaces • Hacker News Board

Re: Instant Payouts for Marketplaces

#11

Post by bkrausz » Mon, Sep 19, 2016, 7:00 PM UTC

JoshTriplett wrote: post #6

bkrausz wrote: post #5

Earlier quoted context omitted.

@devbug I work at Stripe. nope—neither, we’ve worked with Visa and Mastercard to get funds on to debit cards instantly. This isn’t a refund or a loan. Without getting too into the weeds, in the same way you can make a payment at 10PM on a Sunday, you’re able to be paid out instantly through Instant Payouts.

If the customer issues a chargeback, who ultimately owns the liability? The person corresponding to the managed account, or the owner of the marketplace that manages the accounts? Will the owner of the marketplace be held responsible for the requirements like maintaining a low chargeback percentage, or is that requirement passed on to the managed account (which could be closed if that becomes an issue)?

With managed accounts the platform owns ultimate liability. This is because with managed accounts we agree not to contact the account holder directly under normal circumstances, so we are more limited in our ability to ask for more information or quickly shut down potentially fraudulent accounts.

As for things like chargeback rate, it depends more on your type of business than the particular Stripe product you use. For example, if you are running a shopping cart hosting service, we recognize that each of your stores are different, and will consider them somewhat separately. However, as the direct line to your customers, if you're attracting a huge amount of fraud on your platform, we would expect you to take steps to reduce that, and would work with you to figure out what the best steps may be.

We are working to figure out the best balance between giving platforms control and using our expertise to help them with challenges like fraud. If you have any suggestions on how we could improve this balance I'd love to hear them, either here or via email at bkrausz@stripe.com

Re: Instant Payouts for Marketplaces

#12

Post by singlow » Mon, Sep 19, 2016, 7:01 PM UTC

intrasight wrote: post #10

I've no idea what they mean by "marketplace"

Common term for a site like eBay or Etsy where multiple sellers run stores that share a centralized cart and check-out.

Re: Instant Payouts for Marketplaces

#13

Post by samtho » Mon, Sep 19, 2016, 7:02 PM UTC

intrasight wrote: post #10

I've no idea what they mean by "marketplace"

A place where users can sell products or services to other users on the site. This creates a logistical problem where you are collecting payments from users and (potentially) paying out to the same users.

Re: Instant Payouts for Marketplaces

#14

Post by flibble » Mon, Sep 19, 2016, 7:10 PM UTC

pyronite wrote: post #9

> Instant Payouts cost 1.5% of the payout amount, with a minimum fee of 50¢. This is the killer for us and, I'm guessing, many other marketplaces without a Lyft-sized (20%) rake. Our current solution for marketplace payouts charges one quarter per payout. The funds are direct deposited in the user's account the next business day. Maybe we have a sweet deal, but to go from this to 1.5%, in addition to Stripe's other (…

I would guarantee that Lyft did not pay $7,500,000 in fees for this.

Re: Instant Payouts for Marketplaces

#15

Post by swalsh » Mon, Sep 19, 2016, 7:14 PM UTC

matthewarkin wrote: post #4

caseyf wrote: post #2

This looked exciting at first, but I hadn't heard about "managed accounts" and they (understandably) shift the work to the platform/API user: Handling information requests: instead of requesting it directly from the account holder, Stripe will request information, such as a social security number or passport scan, from you. You must collect this information from the user and provide it to Stripe, otherwise Stripe may…

Financial liability is also shifted to the platform / api user.

If you're a market place, why shouldn't you be responsible for that stuff? Isn't that part of the value you're providing as middle man?

Re: Instant Payouts for Marketplaces

#16

Post by bamazizi » Mon, Sep 19, 2016, 7:24 PM UTC

1.5% additional cost to already high transaction fees is ridiculous!

Re: Instant Payouts for Marketplaces

#17

Post by jonlucc » Mon, Sep 19, 2016, 7:40 PM UTC

intrasight wrote: post #10

I've no idea what they mean by "marketplace"

Essentially a marketplace accepts funds and disperses some of those funds to another party. One example is Uber: they take payment from the rider and give some of that to the driver.

Re: Instant Payouts for Marketplaces

#18

Post by octaveguin » Mon, Sep 19, 2016, 7:41 PM UTC

pyronite wrote: post #9

> Instant Payouts cost 1.5% of the payout amount, with a minimum fee of 50¢. This is the killer for us and, I'm guessing, many other marketplaces without a Lyft-sized (20%) rake. Our current solution for marketplace payouts charges one quarter per payout. The funds are direct deposited in the user's account the next business day. Maybe we have a sweet deal, but to go from this to 1.5%, in addition to Stripe's other (…

Does this mean that they're charging 1.5% + $0.50 on top of their 2.9% + $0.30 total?

It's unclear how all the pricing works. Does the normal stripe fee occur for the user of the market place in addition to the marketplace fee or does it only trigger when you the marketplace owner receives the payments? Or does it not trigger at all?

Re: Instant Payouts for Marketplaces

#19

Post by ci5er » Mon, Sep 19, 2016, 7:42 PM UTC

bamazizi wrote: post #16

1.5% additional cost to already high transaction fees is ridiculous!

How so? About 1% for about a month (30 days) is in the ballpark for A/R acceleration, isn't it? The "about 1%" for the 20 day lag on the issuing side collections cycle is from the merchant paying for about one month of cardholder interest.

The Visa/Mastercard oligopoly's fee structure isn't Stripe's fault...

EDIT: Gosh - it looks like they're building it around ACH in the US and taking the risk "on us". That's bold. I wouldn't even for 1.5%.

Re: Instant Payouts for Marketplaces

#20

Post by matthewarkin » Mon, Sep 19, 2016, 7:47 PM UTC

swalsh wrote: post #15

matthewarkin wrote: post #4

Earlier quoted context omitted.

Financial liability is also shifted to the platform / api user.

If you're a market place, why shouldn't you be responsible for that stuff? Isn't that part of the value you're providing as middle man?

If you use standalone accounts, then the liability is with Stripe. With managed accounts you're collecting all this information, Stripe charges an additional .5% and financial liability switches to you if Stripe cannot debit the merchant. I'm not saying one shouldn't be responsible for it, but it is a difference.

I would argue that the .5% you are paying to use managed accounts would include some sort of "insurance" against fraudulent merchants especially since one would hope Stripe is providing platforms with a similar level of verification compared to standalone accounts.

Ideally platforms would be aware of the differences and make the best decision based on their risk tolerance and UX goals, but after spending a fair amount of time in Stripe's IRC room in the past, people just want to build something and don't always go into the deep documentation listing some of these gotchas.