Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Stripe increases price for business in the European Economic Area

support.stripe.com

Post reply on HN
Print view View original

151–160 of 237 posts

Re: Stripe increases price for business in the European Economic Area

#151

Post by dkjaudyeqooe »

avianlyric wrote: post #78
bjackman wrote: post #10

I have been pondering transaction costs lately. Seems like this is an area where intervention could have massive impact: these costs are effectively a tax that incurs deadweight loss so according to prevailing economic theory if we can reduce it the whole economy should be catalysed. IIUC governments already introduce price caps for certain elements of this market but I think we could be doing more? Like mandating in…

The EU introduced price caps on interchange in 2015 capping interchange on credit cards at 0.3% and debit cards at 0.2%. That’s almost an order-of-magnitude lower than interchange fees in the US, which are usually around the 1%-2% level. This is big part of the reason you don’t see high value reward cards or cashback program in the EU. There simply isn’t the interchange revenue to fund them, which is good thing, beca…

> This is big part of the reason you don’t see high value reward cards or cashback program in the EU.

Interestingly my US 1.5%-3% (regular, also 5% special) cashback cards keep paying out on transactions here in the EU. I've always wondered who is losing out in that equation.

Re: Stripe increases price for business in the European Economic Area

#152

Post by triceratops »

dkjaudyeqooe wrote: post #151
avianlyric wrote: post #78

Earlier quoted context omitted.

The EU introduced price caps on interchange in 2015 capping interchange on credit cards at 0.3% and debit cards at 0.2%. That’s almost an order-of-magnitude lower than interchange fees in the US, which are usually around the 1%-2% level. This is big part of the reason you don’t see high value reward cards or cashback program in the EU. There simply isn’t the interchange revenue to fund them, which is good thing, beca…

> This is big part of the reason you don’t see high value reward cards or cashback program in the EU. Interestingly my US 1.5%-3% (regular, also 5% special) cashback cards keep paying out on transactions here in the EU. I've always wondered who is losing out in that equation.

You probably pay for it with the exchange rate spread. Your card may say no foreign transaction fees but they're already taking a 3% profit margin on the currency conversion.

Re: Stripe increases price for business in the European Economic Area

#154

Post by hocuspocus »

axelthegerman wrote: post #132
adrr wrote: post #107

Earlier quoted context omitted.

How do credit cards provide 60 day interest free loan with only 0.3% charge to the merchants? I can see low interchange rates for debit cards like the US the interchange for debit card for major banks is capped at 0.05%.

By charging exorbitant interest for folks who don't pay off their balance in full. Which kind of reminds me of SaaS products that offer a free tier to sell you on the premium subscriptions

I really doubt that many credit card holders are actually using the revolving credit in Europe.

For starters in most European countries, you are probably not going to qualify unless you're rich enough to pay your bills in full every month.

Re: Stripe increases price for business in the European Economic Area

#155

Post by triceratops »

kmlx wrote: post #111
avianlyric wrote: post #78

Earlier quoted context omitted.

The EU introduced price caps on interchange in 2015 capping interchange on credit cards at 0.3% and debit cards at 0.2%. That’s almost an order-of-magnitude lower than interchange fees in the US, which are usually around the 1%-2% level. This is big part of the reason you don’t see high value reward cards or cashback program in the EU. There simply isn’t the interchange revenue to fund them, which is good thing, beca…

> you don’t see high value reward cards or cashback program in the EU. this seems like a false statement. here is an article from 2021 that highlights some of the numerous cashback offers: https://medium.com/@danminea/best-cashback-cards-with-reward... and Amex usually has cashback cards as well. disclaimer: i have used some of these cashback cards both in the EU and outside of it.

These are not high value rewards cards. You should see what the US has.

Re: Stripe increases price for business in the European Economic Area

#156

Post by candiodari »

pancrufty wrote: post #145
throwaway67743 wrote: post #12

It says something when traditional banks are basically the same price now and are almost as good in features (and many other card processors are cheaper, especially if eg you stick to a processor in the EU for EU cards) - I'm not sure why anyone would pick Stripe anymore, especially as they have just as many "hidden" costs as others (eg fraud stuff)

Having seen many of these systems myself, I doubt they’re “almost as good in features.” My European bank (one of the largest in my country) doesn’t accept passwords longer than 8 characters. Imagine how bad the rest of the systems is.

If you're working with COBOL records then changing the number of characters of any field, or adding or removing a field is pretty much impossible.

Which leads to funny questions at development time like "how many characters do we reserve in the customer record for the third child of the second wife of customer X, when they're remarried, this third child is not a child of the customer but there does exist an alimentation 'agreement' between the customer and their third wife". You must make this decision knowing that whatever your answer ... it can never be changed again.

>500kb per record. And, of course, mostly it just has first and last name, address, birthdate and balance, nothing else.

Makes the web look efficient.

Re: Stripe increases price for business in the European Economic Area

#157

Post by dehrmann »

freedude wrote: post #153

I know this is in the EU, but do yourself and the businesses you love a favor. Pay with CA$H. The value you receive from local small businesses is worth the time it takes to avoid the tax on our economy.

Cash isn't free, either. Processing cash involves trips to the bank, and it comes with the risk of theft, loss, and counterfeiting.

Re: Stripe increases price for business in the European Economic Area

#158

Post by woobar »

dagw wrote: post #116
khuey wrote: post #110

Earlier quoted context omitted.

Debit card fees in the US have been capped at $0.22 + 0.05% for more than a decade.

Which is still over 1% for purchase under $20

Why do merchants in Germany have minimum transaction amounts for card purchases then?

Re: Stripe increases price for business in the European Economic Area

#159

Post by pembrook »

triceratops wrote: post #152
dkjaudyeqooe wrote: post #151

Earlier quoted context omitted.

> This is big part of the reason you don’t see high value reward cards or cashback program in the EU. Interestingly my US 1.5%-3% (regular, also 5% special) cashback cards keep paying out on transactions here in the EU. I've always wondered who is losing out in that equation.

You probably pay for it with the exchange rate spread. Your card may say no foreign transaction fees but they're already taking a 3% profit margin on the currency conversion.

This. There's so much funny business that goes on with FX rates that it makes me almost pro-crypto.

Even the people who claim to offer raw spot market rates (ie. Interactive Brokers), in fact do not offer that. I would not be surprised in Visa & Mastercard do the same--although they claim otherwise.

Re: Stripe increases price for business in the European Economic Area

#160

Post by woobar »

Timshel wrote: post #79
bjackman wrote: post #10

I have been pondering transaction costs lately. Seems like this is an area where intervention could have massive impact: these costs are effectively a tax that incurs deadweight loss so according to prevailing economic theory if we can reduce it the whole economy should be catalysed. IIUC governments already introduce price caps for certain elements of this market but I think we could be doing more? Like mandating in…

I wish those transaction cost would be made visible. Imo the seller should not care which card the client use, if it's more expensive to use a "premium" card then it should be made visible to the client and he should be the one to pay the overhead.

In US sales tax is made visible, i.e. it is not included in the listed price. And first thing foreign visitors do is complain about this.
Post reply on HN