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Stripe offers SEPA in Europe, but I believe it’s still in Beta. We integrated it, but after having some trouble with the equivalent of chargebacks, we measured

Stripe offers SEPA in Europe, but I believe it’s still in Beta. We integrated it, but after having some trouble with the equivalent of chargebacks, we measured customer adoption compared to credit cards and PayPal in Europe and didn’t see a big shift. We pulled it out. We’re a B2C though so it could work for B2B more reliably I imagine.

Silhouette 9y ago
after having some trouble with the equivalent of chargebacks Would you share more details about this, if you can?
- GordonS 9y ago
  I'd also be interested to know more about this - I would have thought such behaviour would be comparatively rare for B2C.
  - GordonS 9y ago
    Gah, sorry, just ignore me, I mixed up B2B and B2C!
- gingerlime 9y ago
  not sure if it fits easily into a HN comment, so feel free to drop me an email. Things might have changed or improved since. Generally, it's way too easy to reverse a SEPA payment for a customer (up to 8 weeks if I recall after purchase). It led to some, admittedly rare, cases where we can issue a refund to a customer and then they'll reverse the payment as well. So we ended up with negative revenue to the same amount of what we charged, which can be up to 190 EUR. So we'd actually refund 190 EUR and then lose another 190 EUR + Stripe chargeback fees on top. Ouch. There was little or nothing we could do about it apart from begging the customer to transfer the money back to us... On top of that, there were chargeback fees even if the bank, rather than the customer, reversed the charge. This happens not too infrequently (IIRC around 5% of transactions). If this was a credit card transaction, the bank would simply decline the charge. With SEPA it's not as simple... The charge gets through, supposedly, and then bounces with a chargeback fee...
  - Silhouette 9y ago
    Thanks for the insights. Ironically, we've been looking at accepting SEPA for European customers primarily because card payments haven't been great for us in terms of reliability. We've never had a problem with UK customers paying by their version of Direct Debit, where there is also an automatic right to reverse a payment, and certainly not with banks reversing charges without customer intervention, so it's good to know this is something we'd need to watch out for with SEPA.
    - gingerlime 9y ago
      As far as I know, Stripe SEPA is only available in EUR currency[0], so this nearly excludes the UK completely. At least for us, all SEPA payments were outside the UK. Probably 95% from Germany and Austria, and the rest from a few other EU countries. Not a huge sample size, but we've been running with SEPA for a few months. We did an A/B test for a a few weeks as well, and basically observed no hit in total revenue when we offered SEPA or without it (only cards and PayPal), so that was the main reason we pulled out the plug. Not just the chargebacks. Another thing I should mention is the async nature of the whole thing. Unlike cards that get authorized/declined instantly, we're talking days or weeks with SEPA. For a monthly subscription, this eats into the first month easily. Again, we're talking about private individuals here (B2C), typically students in our cases, and as I mentioned predominately from Germany, so YMMV a lot with other customer types or countries. [0] https://stripe.com/docs/sources/sepa-debit#create-source https://stripe.com/docs/sources/sepa-debit#create-source
      - Silhouette 9y ago
        Thanks again. These are all interesting data points. There are certainly a lot of similarities between what you're describing and what we were envisaging setting up. The lack of increased revenue when SEPA was available is particularly worrying, as we know in our case that from time to time we get requests from customers who don't use credit cards, and we were hoping SEPA might be a more accessible alternative for that part of our market.

Silhouette 9y ago

after having some trouble with the equivalent of chargebacks Would you share more details about this, if you can?

GordonS 9y ago
I'd also be interested to know more about this - I would have thought such behaviour would be comparatively rare for B2C.
- GordonS 9y ago
  Gah, sorry, just ignore me, I mixed up B2B and B2C!
gingerlime 9y ago
not sure if it fits easily into a HN comment, so feel free to drop me an email. Things might have changed or improved since. Generally, it's way too easy to reverse a SEPA payment for a customer (up to 8 weeks if I recall after purchase). It led to some, admittedly rare, cases where we can issue a refund to a customer and then they'll reverse the payment as well. So we ended up with negative revenue to the same amount of what we charged, which can be up to 190 EUR. So we'd actually refund 190 EUR and then lose another 190 EUR + Stripe chargeback fees on top. Ouch. There was little or nothing we could do about it apart from begging the customer to transfer the money back to us... On top of that, there were chargeback fees even if the bank, rather than the customer, reversed the charge. This happens not too infrequently (IIRC around 5% of transactions). If this was a credit card transaction, the bank would simply decline the charge. With SEPA it's not as simple... The charge gets through, supposedly, and then bounces with a chargeback fee...
- Silhouette 9y ago
  Thanks for the insights. Ironically, we've been looking at accepting SEPA for European customers primarily because card payments haven't been great for us in terms of reliability. We've never had a problem with UK customers paying by their version of Direct Debit, where there is also an automatic right to reverse a payment, and certainly not with banks reversing charges without customer intervention, so it's good to know this is something we'd need to watch out for with SEPA.
  - gingerlime 9y ago
    As far as I know, Stripe SEPA is only available in EUR currency[0], so this nearly excludes the UK completely. At least for us, all SEPA payments were outside the UK. Probably 95% from Germany and Austria, and the rest from a few other EU countries. Not a huge sample size, but we've been running with SEPA for a few months. We did an A/B test for a a few weeks as well, and basically observed no hit in total revenue when we offered SEPA or without it (only cards and PayPal), so that was the main reason we pulled out the plug. Not just the chargebacks. Another thing I should mention is the async nature of the whole thing. Unlike cards that get authorized/declined instantly, we're talking days or weeks with SEPA. For a monthly subscription, this eats into the first month easily. Again, we're talking about private individuals here (B2C), typically students in our cases, and as I mentioned predominately from Germany, so YMMV a lot with other customer types or countries. [0] https://stripe.com/docs/sources/sepa-debit#create-source https://stripe.com/docs/sources/sepa-debit#create-source
    - Silhouette 9y ago
      Thanks again. These are all interesting data points. There are certainly a lot of similarities between what you're describing and what we were envisaging setting up. The lack of increased revenue when SEPA was available is particularly worrying, as we know in our case that from time to time we get requests from customers who don't use credit cards, and we were hoping SEPA might be a more accessible alternative for that part of our market.