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Stripe increases price for business in the European Economic Area

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

#191

Post by woofcat »

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.

I'll be the naysayer here. I very much disagree with this. A Visa is a Visa is a Visa. If you don't like it then don't take visa.

Charging me as the end user more money because I have a "Premium" card would be a very fast way for me to not shop with you.

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

#192

Post by rgbrenner »

avianlyric wrote: post #162
rgbrenner wrote: post #138

Earlier quoted context omitted.

"because high interchange + cashback creates a nasty regressive tax" There's an interchange surcharge for rewards cards. Stripe bundles this all together to make the pricing simpler.. but most merchants use traditional merchant accounts, and they are charged based on the type of card used. Edit: For example, here's visa's interchange fees: https://usa.visa.com/content/dam/VCOM/download/merchants/vis...

Doesn’t really change anything. VISA and Mastercard rules also prevent merchants from discriminating based on card type, either you except all VISA/Mastercard cards, or you except none. So the exact manner in which they’re billed to merchants is kinda irrelevant, the cost ends up being spread over all consumers, regardless of their ability to recover the money via cashback or rewards.

Prices aren't set based on costs. Prices are set at the maximum the market will bear. If you've ever set prices for a product, you would see this yourself. Price*Volume=Revenue

Consumers dont care if you can pay for the inputs to your product. They obtain a certain value from your product and have a certain expectation of what the price should be, and if your costs are above that, consumers are happy to watch you go out of business. In fact, inability to increase prices over time while inflation increases the cost of inputs, is one of the ways the economy pushes marginal business out of the market.

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

#193

Post by mytailorisrich »

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.

The EU cap only applies if both payer and payee are local. If you have an US card and uses it in the EU then the cap does not apply.

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

#194

Post by csomar »

The carding ecosystem is going down. In the last two years, I saw a surprising uptick in the number of businesses that will charge a 2-3% fee if you pay with card. This is from the US to Europe to SEA.

My guess is that most commerce will start offloading this cost to customers especially as new payment methods become available (ie: wallets)

Lest government impose cards monopoly and force transactions with them, I think we have reached/are close to the peak of mastercard/visa.

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

#195

Post by bombcar »

csomar wrote: post #194

The carding ecosystem is going down. In the last two years, I saw a surprising uptick in the number of businesses that will charge a 2-3% fee if you pay with card. This is from the US to Europe to SEA. My guess is that most commerce will start offloading this cost to customers especially as new payment methods become available (ie: wallets) Lest government impose cards monopoly and force transactions with them, I thi…

Iirc in the US at least the gov’t finally struck down the “must charge same as cash” requirement that the credit card companies were forcing on everyone.

And inflation has given them incentive to start actually doing it - at least two restaurants here have a cash discount now.

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

#197

Post by jkaplowitz »

titaniumtown wrote: post #166
sschueller wrote: post #48

In Switzerland Stripe is already 2.9% + CHF0.30 which is higher than the new rate in the EU. If you want a local solution that also can do Twint (Swiss p2p payments) without extra contracts then I would recommend you try Payrexx[1]. Per transaction fees are also less than what Stripe is charging although you have a monthly fixed fee. [1] https://www.payrexx.ch

Switzerland isn't in the EEA though? or am I mistaken

You're correct. It's in EFTA and the Schengen Area, but not in the EEA or the EU.

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

#198

Post by 01acheru »

candiodari wrote: post #156
pancrufty wrote: post #145

Earlier quoted context omitted.

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 alimentat…

Well... yeah, but no one on their sane mind would build the backend of a mobile app or of a web app in COBOL.

Of course you can have all your COBOL and your mainframes down below rolling and churning like it's 1975, but the authentication of an app is layers up above in a totally distinct system. Or this or you're crazy.

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

#199

Post by dexterdog »

bombcar wrote: post #195
csomar wrote: post #194

The carding ecosystem is going down. In the last two years, I saw a surprising uptick in the number of businesses that will charge a 2-3% fee if you pay with card. This is from the US to Europe to SEA. My guess is that most commerce will start offloading this cost to customers especially as new payment methods become available (ie: wallets) Lest government impose cards monopoly and force transactions with them, I thi…

Iirc in the US at least the gov’t finally struck down the “must charge same as cash” requirement that the credit card companies were forcing on everyone. And inflation has given them incentive to start actually doing it - at least two restaurants here have a cash discount now.

So few places actually followed that rule anyway, especially every gas station.

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

#200

Post by conductr »

poxrud wrote: post #190

Stripe stopped being competitive when they began keeping all of the transaction fees, including a percentage of the entire transaction, when issuing refunds. A customer changed their mind... well you just lost a lot of money.

I agree but to be fair, that was always an expense to them. They just took it on the chin and used it as a competitive advantage/point of differentiation and it helped them grow. Especially makes sense as they initially targeted markets where software trials were being sold.
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