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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

#71

Post by smca »

petesergeant wrote: post #31

> premium cards [are] commercial, corporate, or business cards issued by Visa and Mastercard [and attract more expensive fees, even compared to Amex] Does anyone know more about that? Why are they more expensive? Is there a different underlying cost structure, or simply price discrimination by some intermediary? There's more information on "premium cards" here[0], but it doesn't explain the price difference or why a…

> it doesn't explain the price difference

Commercial interchange isn't regulated in Europe. The card networks have increased their interchange rates for commercial and business cards in many European countries.

> or why a separate category is needed

These fees have been moved into a separate category to contain increases to cards where network costs have increased significantly. (Rather than apply them more broadly.)

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

#72

Post by scrollaway »

ptman wrote: post #66
scrollaway wrote: post #55

Earlier quoted context omitted.

My years in fintech have taught me that it'll be very difficult to get these charges down without legislation. What they are is, essentially, insurance. For Visa/MC, "running the network" at cost is possible on much less money, but the network involves a lot of elements along the chain that can get transactions reverted. The "insurance" (1-3% of tx) pays for the legal-adjacent issues related to handling those transac…

https://www.epicompany.eu/ and https://nordicpayments.eu/ instead of Visa/MC

Yup exactly, but you need to take that strategy and apply it beyond europe. For this you need local networks in the US as well for example. Right now, there aren't really any; some crypto based local networks but that's all.

But the US is undergoing some serious banking network updates this year and that likely means some new local networks are being built. This idea will look very different by 2024 and maybe even be feasible.

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

#73

Post by tyingq »

ivan_gammel wrote: post #69
tyingq wrote: post #44

Earlier quoted context omitted.

That merchants hold almost 100% of the liability for fraud even if they do everything "right" to vet a transaction is crazy to me. The other parties (issuing bank, payment processor, payment network) are in a much better position to combat and detect fraud, since they see ALL the transactions. But the incentive to do better is low, since the merchant not only holds the bag, but sends them a penalty fee.

Disputes are not always fraud on customer side and it’s really not the job of the bank to figure out who is wrong. Imagine two wallets disputing the fate of a coin on a bazaar - does it really make sense? E.g. if content of the package is stolen at warehouse or something else happens, where you think you sent the product and customer got nothing, customer may dispute your point of view and request chargeback. There’s…

>Disputes are not always fraud on customer side

Agreed, though the other 3 parties know a lot more about the customer, past disputes, and so on.

Also, the argument applies for any kind of chargeback. Again, the other three parties combined see all transactions and have lots of context. And, if they required things like ip address, shipping address (they only ask for billing), they could really improve fraud detection. But they don't...there is an incentive problem.

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

#74

Post by brmgb »

switch007 wrote: post #36
reisse wrote: post #15

I don't know how Stripe can justify these pricing, except for "oh we can extract more money, let's do that!". In other (non-Western) countries pricing for local payment systems can be less than half of what Stripe charges, e. g. Alipay (one of the biggest Chinese payment services) charges about 0.55% merchant fee without per-transaction cost.

Everyone is increasing prices in Europe. Inflation in the UK is crazy. I'm standing in my local coffee place and a basic Americano went up £0.50 overnight It's crazy and a lot of gouging is happening (not so much these smaller companies. They do have it tough. The owner does drive an expensive BMW though)

> Everyone is increasing prices in Europe. Inflation in the UK is crazy.

Yes but payment processors generally take fees as a share of transactions. That naturally shields them for inflation.

Raising their percentage fees is just a naked cash grab.

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

#76

Post by BasedInfra »

thiscatis wrote: post #41
petesergeant wrote: post #31

> premium cards [are] commercial, corporate, or business cards issued by Visa and Mastercard [and attract more expensive fees, even compared to Amex] Does anyone know more about that? Why are they more expensive? Is there a different underlying cost structure, or simply price discrimination by some intermediary? There's more information on "premium cards" here[0], but it doesn't explain the price difference or why a…

Because they give more benefits (insurance, lounge access, cashback etc...) and someone has to pay for this (i.e. the merchants). For example R̶e̶v̶o̶l̶u̶t̶ ̶M̶e̶t̶a̶l̶ premium cards and corporate cards which offers benefits such as lounge access to pay-to-use lounges, travel insurance, cashback etc.. are mostly designed by the schemes in parternship with the issuing banks. Also note that mostly in the US and Europe…

>premium cards [are] commercial, corporate, or business cards issued by Visa and Mastercard

Revolut Metal (personal) is not one of these cards.

Commercial cards (business banking, business credit etc) are what these cards are and they have less regulation in the EU.

For instance no cap on interchange fees and they can show prices excluding the card fee and add that on at checkout for business card users.

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

#77

Post by remus »

ivan_gammel wrote: post #56
throwaway67743 wrote: post #43

Earlier quoted context omitted.

It makes taking cards via Stripe completely untenable as anyone can dispute a legit charge and you're still out of pocket - imagine being charged 20 EUR for a 3 eur order even if the customer actually ordered it and just felt like being a dick

You just refund 3€ order and move on. This is the reason why marketplaces implement sophisticated solutions for returns — sometimes it is cheaper to let a few customers to get their product for free than to spend ton of money on returns, refunds and legal disputes. You can always reflect this risk in your prices.

> You just refund 3€ order and move on.

That's fine if the customer actually asks for a refund in the first place. All the chargebacks I've handled through work (admittedly only in single digits), the customer just started a chargeback with no prior communications.

It's a pretty frustrating process as we've got no issues giving refunds in most cases.

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

#78

Post by avianlyric »

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, because high interchange + cashback creates a nasty regressive tax that transfers vast amounts on wealth from those with poor credit ratings (usually the least well off society) to those with high credit ratings (usually the most well off in society).

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

#79

Post by Timshel »

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.

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

#80

Post by thiscatis »

BasedInfra wrote: post #76
thiscatis wrote: post #41

Earlier quoted context omitted.

Because they give more benefits (insurance, lounge access, cashback etc...) and someone has to pay for this (i.e. the merchants). For example R̶e̶v̶o̶l̶u̶t̶ ̶M̶e̶t̶a̶l̶ premium cards and corporate cards which offers benefits such as lounge access to pay-to-use lounges, travel insurance, cashback etc.. are mostly designed by the schemes in parternship with the issuing banks. Also note that mostly in the US and Europe…

>premium cards [are] commercial, corporate, or business cards issued by Visa and Mastercard Revolut Metal (personal) is not one of these cards. Commercial cards (business banking, business credit etc) are what these cards are and they have less regulation in the EU. For instance no cap on interchange fees and they can show prices excluding the card fee and add that on at checkout for business card users.

I'm not saying Revolut Metal is one of these, I'm just saying the card schemes create different segments for cards that have their own benefits, for these benefits the cost is actually mostly going to either the user paying a membership fee or the MDR paid by the merchant to cover the cost. The benefits are not just a freebie given by the issuer or scheme, it's a marketint cost that someone has to pay for.
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