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Stripe Is the New PayPal

news.ycombinator.com

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Re: Stripe Is the New PayPal

#321

Post by jliptzin »

georgerobinson wrote: post #312
jliptzin wrote: post #286

Earlier quoted context omitted.

We were booted from stripe when a couple of customers just decided to chargeback all of their previous transactions, each of which was pretty small, without first contacting us, so it was too late to issue refunds. That pushed our chargeback rate over the 2% threshold, so we were booted. Unfortunately the chargeback rate is measured as % of transactions and not volume. Seems like a great way to screw with a competito…

Is there anything that makes this sort of practice unlawful?

Not that I know of, plus it would be extremely difficult to detect as each chargeback would appear to be coming from a completely different customer (different name, different address, different card number). I'd imagine this kind of attack would be especially stressful to SaaS businesses or subscription businesses in general.

Re: Stripe Is the New PayPal

#322

Post by jkestner »

dangrossman wrote: post #279
jkestner wrote: post #276

Earlier quoted context omitted.

But that doesn't include the credit card association's 2.10% or whatever, does it? Stripe does. Yes, collapsing the confusing levels of this process is certainly worth something.

No, it does include that fee. That 0.05% + $0.21 I referenced is the interchange fee charged by Visa. That fee was capped at that low level by the Durbin Amendment of the Dodd-Frank financial reform legislation in 2010. Stripe's pricing has been 95%+ markup when it comes to debit/check cards since then. Other card types don't have such an enormous fee spread, but unless all your customers are paying with corporate ca…

At the risk of being dense, are you sure you're not talking about debit cards? I've never seen interchange fees lower than about 1% for credit cards. In what I read from the Durbin Amendment, I've only found the specific numbers you mentioned in reference to debit cards.

If I'm wrong, I want the name of your merchant processor!

Re: Stripe Is the New PayPal

#323

Post by dangrossman »

jkestner wrote: post #322
dangrossman wrote: post #279

Earlier quoted context omitted.

No, it does include that fee. That 0.05% + $0.21 I referenced is the interchange fee charged by Visa. That fee was capped at that low level by the Durbin Amendment of the Dodd-Frank financial reform legislation in 2010. Stripe's pricing has been 95%+ markup when it comes to debit/check cards since then. Other card types don't have such an enormous fee spread, but unless all your customers are paying with corporate ca…

At the risk of being dense, are you sure you're not talking about debit cards? I've never seen interchange fees lower than about 1% for credit cards. In what I read from the Durbin Amendment, I've only found the specific numbers you mentioned in reference to debit cards. If I'm wrong, I want the name of your merchant processor!

I am most definitely talking about debit cards. I said "fee for charging a debit/check card". They make up 25% of my online processing volume despite being a mostly B2B business. They're probably more than 25% of Stripe's volume.

Visa interchange fees: http://usa.visa.com/download/merchants/Visa-USA-Interchange-...

A screenshot of a transaction report at my processor: http://i.imgur.com/fSycwUS.png

Feel free to e-mail me if you'd like any other clarification or information. It's in my profile.

Re: Stripe Is the New PayPal

#324

Post by jkestner »

dangrossman wrote: post #323
jkestner wrote: post #322

Earlier quoted context omitted.

At the risk of being dense, are you sure you're not talking about debit cards? I've never seen interchange fees lower than about 1% for credit cards. In what I read from the Durbin Amendment, I've only found the specific numbers you mentioned in reference to debit cards. If I'm wrong, I want the name of your merchant processor!

I am most definitely talking about debit cards. I said "fee for charging a debit/check card". They make up 25% of my online processing volume despite being a mostly B2B business. They're probably more than 25% of Stripe's volume. Visa interchange fees: http://usa.visa.com/download/merchants/Visa-USA-Interchange-... A screenshot of a transaction report at my processor: http://i.imgur.com/fSycwUS.png Feel free to e-mai…

Whoops, you did say that, way back in the first post in our thread. Sorry, I've been focused on credit cards — all is clear now. I hadn't thought at all about that wrinkle of Stripe.

I suppose it's (only partially) balanced by the higher AMEX, etc fees.

Re: Stripe Is the New PayPal

#325

Post by pbreit »

codexon wrote: post #319
pbreit wrote: post #302

Earlier quoted context omitted.

It is very common knowledge that 1% is the cutoff. Are you seriously questioning that?

I don't doubt 1% is a common standard but the parent was making the assertion that "all the businesses that currently exist and accept credit cards are doing so without more than 1-2% chargeback rates".

Maybe not "all", just 99.9%.

Re: Stripe Is the New PayPal

#326

Post by hellbanner »

mason55 wrote: post #47
hellbanner wrote: post #42

-- PSA regarding Credit Card Validation -- Last year I was testing Stripe integration. I tried using my own credit card with a fake name. Surprise, it went through. I emailed Stripe support. After half a dozen emails discussing CC authorization I learned that Stripe does not and can not validate Name & Address on credit card. Stripe told me that Credit Card companies do not disclose this data to Payment Processors li…

> Last year I was testing Stripe integration. I tried using my own credit card with a fake name. This sounds like a great way to get your account shut down. They provide test/mock APIs for a reason.

I wanted to verify their production code worked. Instead of using a real customer's credit card, I used my own. If there was a bug in my code, my own card would be at risk, not a customer's.

Re: Stripe Is the New PayPal

#327

Post by hellbanner »

eeeeeeeeeeeee wrote: post #295
hellbanner wrote: post #42

-- PSA regarding Credit Card Validation -- Last year I was testing Stripe integration. I tried using my own credit card with a fake name. Surprise, it went through. I emailed Stripe support. After half a dozen emails discussing CC authorization I learned that Stripe does not and can not validate Name & Address on credit card. Stripe told me that Credit Card companies do not disclose this data to Payment Processors li…

Most Stripe orders I've done lately don't even ask for my name. Correct me if I'm wrong. It's only the CC number, CVV, and expiration. Maybe it's different if the total charge is higher?

This was using their mobile API. Their SDK allows for a name param.

Re: Stripe Is the New PayPal

#328

Post by gregpilling »

jliptzin wrote: post #321
georgerobinson wrote: post #312

Earlier quoted context omitted.

Is there anything that makes this sort of practice unlawful?

Not that I know of, plus it would be extremely difficult to detect as each chargeback would appear to be coming from a completely different customer (different name, different address, different card number). I'd imagine this kind of attack would be especially stressful to SaaS businesses or subscription businesses in general.

every business actually. If credit cards represent a xx% of your business, then you would be pretty screwed to lose that. Brick and Mortar would have it worse because of lower net margins.
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