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Stripe increasing "instant payout" fees by 50%

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Re: Stripe increasing "instant payout" fees by 50%

#31

Post by lxgr »

gjsman-1000 wrote: post #6

If I remember correctly, payouts always take two or three days to clear, to comply with all of the settlement and legal processes. The “instant payout” is actually a temporary loan from an entity already approved as having all funds available for immediate disposal at multiple links in the chain. This is then used to create the illusion of an instant payout… while the “loan” guarantor receives payment 2-3 days later.…

> payouts always take two or three days to clear, to comply with all of the settlement and legal processes

No, that's usually just how long ACH transfers can take. In most cases, it's more like next-day these days, in my experience (e.g. from paying out from PayPal to my checking account or between checking accounts), but that depends on the specific ACH type and timeline, I believe.

> The “instant payout” is actually a temporary loan

It's usually not. Actual settlement of both card and ACH payments usually happen on the next business day, but since that goes for both legs of most transactions, the settlement periods "cancel each other out".

Re: Stripe increasing "instant payout" fees by 50%

#32

Post by lxgr »

contingencies wrote: post #7
gjsman-1000 wrote: post #6

If I remember correctly, payouts always take two or three days to clear, to comply with all of the settlement and legal processes. The “instant payout” is actually a temporary loan from an entity already approved as having all funds available for immediate disposal at multiple links in the chain. This is then used to create the illusion of an instant payout… while the “loan” guarantor receives payment 2-3 days later.…

Sounds like a blockchain startup in the making!

How would blockchain accelerate ACH transfers (or make wire transfers cheaper, or convince banks to support FedNow)?

Re: Stripe increasing "instant payout" fees by 50%

#33

Post by bananamerica »

cplat wrote: post #12
VoidWhisperer wrote: post #3

The title feels a bit disengenious. Technically, yes, it was increased by 50% of what it was, but it is a shift from 1% to 1.5%, not up to 50% of each transaction.

The title is correct. But I agree that saying "50% increase" conveys less information than saying "1% to 1.5%" (because you don't know 50% of what), and seems to have been used only to make the title more dramatic.

I interpreted it as a increase in the fee.

Re: Stripe increasing "instant payout" fees by 50%

#34

Post by BillyTheKing »

tananaev wrote: post #4

Why is this such an important news? Do people regularly use instant pay out? I would think that it's mostly for emergency situations. Normal payout is still free.

for Fintechs who're using Stripe as a way to allow users to purchase stock/remittances/e-wallet balances etc. instant payouts are very important since in most cases people who load with stripe also consume those funds on the platform instantly

Re: Stripe increasing "instant payout" fees by 50%

#35

Post by dataflow »

VoidWhisperer wrote: post #3

The title feels a bit disengenious. Technically, yes, it was increased by 50% of what it was, but it is a shift from 1% to 1.5%, not up to 50% of each transaction.

I don't feel it's disingenuous at all. When I read the title I instantly understood it to mean multiplying the fee by 1.5. In what world would anyone take this to mean that they're charging 50% of each transaction?

Re: Stripe increasing "instant payout" fees by 50%

#36

Post by dataflow »

VoidWhisperer wrote: post #3

The title feels a bit disengenious. Technically, yes, it was increased by 50% of what it was, but it is a shift from 1% to 1.5%, not up to 50% of each transaction.

I don't feel it's disingenuous at all? They're increasing the fee by 50%... of the fee, obviously. In what world would anyone take this to mean that they're charging 50% of each transaction?

Re: Stripe increasing "instant payout" fees by 50%

#37

Post by [deleted] »

tiffanyh wrote: post #30
toomuchtodo wrote: post #23

Earlier quoted context omitted.

Stripe could choose to support FedNow instant payments and push these funds for pennies (up to $100k at a time), assuming the receiving institution hosting the deposit account(s) is set to receive on those rails. They would arrive within 20 seconds, per FedNow’s SLA. Only costs ~$25/month to plug into these rails, plus a few cents per transaction. https://www.frbservices.org/financial-services/fednow/organi... https:…

Interesting to see from that list that Bank of America, Citigroup, Capital One & PNC missing from the list. Appears they are still lagging in adopting FedNow (while Wells Fargo and US Bank have adopted)

[deleted]

Re: Stripe increasing "instant payout" fees by 50%

#38

Post by frandroid »

ec109685 wrote: post #25
tananaev wrote: post #4

Why is this such an important news? Do people regularly use instant pay out? I would think that it's mostly for emergency situations. Normal payout is still free.

For gig workers, instant payout is a nice deal and increases the value of the platform, so being able to flow from customer to worker seamlessly is a value add.

[flagged]

Re: Stripe increasing "instant payout" fees by 50%

#39

Post by abnercoimbre »

csomar wrote: post #27
VoidWhisperer wrote: post #3

The title feels a bit disengenious. Technically, yes, it was increased by 50% of what it was, but it is a shift from 1% to 1.5%, not up to 50% of each transaction.

I think people who know/use Stripe will have no confusion about this.

Although rare, I use instant payout for my small business. It's a lovely convenience and the extra 1% hit (on top of the usual transaction fees) can be a worthwhile tradeoff. I can't explain it, but the new 1.5% fee killed the motivation to use it entirely.

Re: Stripe increasing "instant payout" fees by 50%

#40

Post by internetter »

toomuchtodo wrote: post #23
tjbiddle wrote: post #21

Earlier quoted context omitted.

They likely meant the ACH is 2 business days.

Stripe could choose to support FedNow instant payments and push these funds for pennies (up to $100k at a time), assuming the receiving institution hosting the deposit account(s) is set to receive on those rails. They would arrive within 20 seconds, per FedNow’s SLA. Only costs ~$25/month to plug into these rails, plus a few cents per transaction. https://www.frbservices.org/financial-services/fednow/organi... https:…

> Stripe could choose to support FedNow

But then they wouldn't be able to charge more fees

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