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I'm right in the middle of looking to jump ship from Stripe and PayPal. Stripe is increasing their conversion fees to 2% for grandfathered accounts on June 1st.

I'm right in the middle of looking to jump ship from Stripe and PayPal. Stripe is increasing their conversion fees to 2% for grandfathered accounts on June 1st. They also have a 0.6% international card fee. Since I'm Canadian, this is going to hurt. 2.9% + 0.6% + 2% + $0.30 = more than a 6-6.5% cut for 90% of my sales. While looking around for alternatives, Braintree stood out for having reasonable fees. Although what really surprised me was that I'm not doing things by the book. Although I'm adding a sales tax for Canadian customers, I don't do this internationally. This is okay for the US and most of the EU since I'm well below their reporting thresholds, but it certainly adds some risk in back-taxes for other countries. That's when I stumbled on a platform called FastSpring, which acts as a merchant of record. They handle all international sales tax for you and have cool features to show prices in your customers currency, etc... They have a steep price (around 6-8% I heard) but with Stripe increasing their fees to match close to this, why not switch and possibly make due-diligence a lot easier if I decide to sell? Anyone else in a similar position? How do you handle sales tax globally? Is there a certain revenue number you should hit before worrying about this?

tzs 6y ago
> That's when I stumbled on a platform called FastSpring, which acts as a merchant of record. They handle all international sales tax for you and have cool features to show prices in your customers currency, etc... I don't know about international sales tax, but FastSpring does not handle domestic US sales tax correctly. I noticed this when I ordered an upgrade to BBEdit, and the tax came to 9.24% instead of the correct 9%. I contacted Bare Bones Software (makers of BBEdit) about it. They referred me to FastSpring, who hosts their store. I contacted FastSpring, and their answer was: > Thank you for contacting FastSpring. Due to the US Supreme Court ruling in South Dakota v. Wayfair, we have had the way we are required to collect state taxes changed. Right now, it is taken as an average across the state. You are probably safe using them, even though they are not collecting sales tax correctly, because as you note they are the merchant of record. When I passed FastSpring's answer back to Bare Bones, and suggested that they talk to their own lawyers to make sure that FastSpring indemnifies them from any liability for miss-collected tax, because everything I found when implementing post Wayfair sales tax handling said FastSpring is doing it wrong, they said that they too had asked FastSpring about this, found it strange, but that they and their corporate counsel believes that because FastSpring is the merchant of record that it will be FastSpring that is on the hook if there is any liability here. This was last October, but I just checked and FastSpring is still doing it wrong. This does not fill me with confidence, because this is easy and cheap to get right for at least half the states (including mine). That's because of the Streamlined Sales Tax agreement [1]. The states that are a party to that have agreed that if online merchants collect sales taxes for sales in all of the member states, the states will cover the costs of using tax services like TaxCloud, Avalara, and a few others I don't recall to lookup rates and file all necessary reports and payments. [1] https://www.streamlinedsalestax.org/ https://www.streamlinedsalestax.org/
- fbelzile 6y ago
  Thanks for the heads up about this!
- fennecfoxen 6y ago
  An interesting point about sales tax is that it isn't assessed by the state to collect from the customer, it's assessed against the company. The company can make up a shortfall from their own revenues (although overcharging the customer might be problematic).
jeromegv 6y ago
What is the 0.6% + 2%? Is that the currency conversion fee? Any way you can get the US sales to be processed in USD and transferred to some kind of US bank account (Transferwise for example). That way you can re-use that to pay invoices in USD, or transfer it back in CAD at a better rate than what the processor is charging you. I sometimes get paid in USD through paypal and that's how I reduce the amount I have to pay paypal for conversion fee.
- fbelzile 6y ago
  > What is the 0.6% + 2%? Is that the currency conversion fee? Yes, international card fee and conversion fee: https://stripe.com/en-ca/pricing#pricing-details https://stripe.com/en-ca/pricing#pricing-details Changing currencies would be a pain, not impossible though. Although, it doesn't solve my sales tax issues and the fact that it just pushes the currency conversion fee problem down the line.
  - happymellon 6y ago
    I believe Revolut has opened shop over that side of the pond, they don't do currency conversion fees, and the rate is the VISA standard rate which is probably as good as you will get. As a consumer in the UK who has been using them a while, I would recommend them completely. When Monzo reach you, they are also brilliant. I use both because the one drawback is their lack of multiple accounts.
  - raphaelj 6y ago
    You can create a TransferWise multi-currency account. That will provides you bank accounts for USD, EUR, GBP AU$ and NZ$, thus avoiding conversion fees.
Silhouette 6y ago
Anyone else in a similar position? How do you handle sales tax globally? There are two sides to that issue, IMHO. One is whether you should have to handle sales tax globally in the first place. If you have no presence of any kind in a particular country, why should you be legally required to collect and remit whatever taxes a government where you have no representation or influence happens to decide are due, particularly if you have only a tiny amount of custom there and the necessary registrations/filings/etc. would cost you more than the entire profit you make from those sales? This is an ethical question as much as anything, because in practice legal agreements between friendly governments might cause you problems if you don't play ball and you're big enough to get noticed but not big enough to have your own army of lawyers and accountants to fight back. As a practical matter, if you do decide you need to collect taxes everywhere according to whatever local rules they have, I suspect it's too complicated for anything but a specialist organisation to handle right now. Everyone and their brother is jumping on the bandwagon and introducing online sales taxes, and you can't become an accountant and a lawyer in every nation, state, dependent territory, county or city in the world that might have its own tax rules just in case one day you get a customer from there. This has pushed us very hard towards the merchant of record model for new business ventures we're setting up at the moment, though it's not our only motivation; declining standards with other payment services we've used in the past are also a factor. However, the first MoR business we looked up that seemed to have a good reputation (Paddle) had such absurd legal terms that we ran away and didn't look back, so we're still searching for a viable solution.
deleted 6y ago
[deleted]

tzs 6y ago

> That's when I stumbled on a platform called FastSpring, which acts as a merchant of record. They handle all international sales tax for you and have cool features to show prices in your customers currency, etc... I don't know about international sales tax, but FastSpring does not handle domestic US sales tax correctly. I noticed this when I ordered an upgrade to BBEdit, and the tax came to 9.24% instead of the correct 9%. I contacted Bare Bones Software (makers of BBEdit) about it. They referred me to FastSpring, who hosts their store. I contacted FastSpring, and their answer was: > Thank you for contacting FastSpring. Due to the US Supreme Court ruling in South Dakota v. Wayfair, we have had the way we are required to collect state taxes changed. Right now, it is taken as an average across the state. You are probably safe using them, even though they are not collecting sales tax correctly, because as you note they are the merchant of record. When I passed FastSpring's answer back to Bare Bones, and suggested that they talk to their own lawyers to make sure that FastSpring indemnifies them from any liability for miss-collected tax, because everything I found when implementing post Wayfair sales tax handling said FastSpring is doing it wrong, they said that they too had asked FastSpring about this, found it strange, but that they and their corporate counsel believes that because FastSpring is the merchant of record that it will be FastSpring that is on the hook if there is any liability here. This was last October, but I just checked and FastSpring is still doing it wrong. This does not fill me with confidence, because this is easy and cheap to get right for at least half the states (including mine). That's because of the Streamlined Sales Tax agreement [1]. The states that are a party to that have agreed that if online merchants collect sales taxes for sales in all of the member states, the states will cover the costs of using tax services like TaxCloud, Avalara, and a few others I don't recall to lookup rates and file all necessary reports and payments. [1] https://www.streamlinedsalestax.org/ https://www.streamlinedsalestax.org/

fbelzile 6y ago
Thanks for the heads up about this!
fennecfoxen 6y ago
An interesting point about sales tax is that it isn't assessed by the state to collect from the customer, it's assessed against the company. The company can make up a shortfall from their own revenues (although overcharging the customer might be problematic).

jeromegv 6y ago

What is the 0.6% + 2%? Is that the currency conversion fee? Any way you can get the US sales to be processed in USD and transferred to some kind of US bank account (Transferwise for example). That way you can re-use that to pay invoices in USD, or transfer it back in CAD at a better rate than what the processor is charging you. I sometimes get paid in USD through paypal and that's how I reduce the amount I have to pay paypal for conversion fee.

fbelzile 6y ago
> What is the 0.6% + 2%? Is that the currency conversion fee? Yes, international card fee and conversion fee: https://stripe.com/en-ca/pricing#pricing-details https://stripe.com/en-ca/pricing#pricing-details Changing currencies would be a pain, not impossible though. Although, it doesn't solve my sales tax issues and the fact that it just pushes the currency conversion fee problem down the line.
- happymellon 6y ago
  I believe Revolut has opened shop over that side of the pond, they don't do currency conversion fees, and the rate is the VISA standard rate which is probably as good as you will get. As a consumer in the UK who has been using them a while, I would recommend them completely. When Monzo reach you, they are also brilliant. I use both because the one drawback is their lack of multiple accounts.
- raphaelj 6y ago
  You can create a TransferWise multi-currency account. That will provides you bank accounts for USD, EUR, GBP AU$ and NZ$, thus avoiding conversion fees.

Silhouette 6y ago

Anyone else in a similar position? How do you handle sales tax globally? There are two sides to that issue, IMHO. One is whether you should have to handle sales tax globally in the first place. If you have no presence of any kind in a particular country, why should you be legally required to collect and remit whatever taxes a government where you have no representation or influence happens to decide are due, particularly if you have only a tiny amount of custom there and the necessary registrations/filings/etc. would cost you more than the entire profit you make from those sales? This is an ethical question as much as anything, because in practice legal agreements between friendly governments might cause you problems if you don't play ball and you're big enough to get noticed but not big enough to have your own army of lawyers and accountants to fight back. As a practical matter, if you do decide you need to collect taxes everywhere according to whatever local rules they have, I suspect it's too complicated for anything but a specialist organisation to handle right now. Everyone and their brother is jumping on the bandwagon and introducing online sales taxes, and you can't become an accountant and a lawyer in every nation, state, dependent territory, county or city in the world that might have its own tax rules just in case one day you get a customer from there. This has pushed us very hard towards the merchant of record model for new business ventures we're setting up at the moment, though it's not our only motivation; declining standards with other payment services we've used in the past are also a factor. However, the first MoR business we looked up that seemed to have a good reputation (Paddle) had such absurd legal terms that we ran away and didn't look back, so we're still searching for a viable solution.

deleted 6y ago

[deleted]