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Hi Saurik, First off, we have more detail about the chargeback procedure at https://stripe.com/help/chargebacks https://stripe.com/help/chargebacks. (The short

by pc 15y ago

Hi Saurik, First off, we have more detail about the chargeback procedure at https://stripe.com/help/chargebacks https://stripe.com/help/chargebacks. (The short answer to your question about whether or not you can tie a chargeback to an individual charge without human interaction is "yes".) We don't currently link to this page in the FAQ, but we should; we'll get that fixed. To your more general question as to how we (and our fraud policies) differ from standard merchant accounts: there's no simple answer. There are a couple of things probably worth pointing out, though: - First off, we should acknowledge that in this particular situation, it's extremely unlikely that Xenonauts is a scam. There are certainly valid questions around "how tractable is it to distinguish such non-scams from actual scams", but the fact remains: in this specific case, what has happened is a bad outcome for the world. Legitimate, trustworthy individuals are being prevented from getting paid. - Secondly, we're not as radically different as you might think. We use many of the same fraud screening measures that traditional merchant account providers do. We work directly with the same banks and processors. We've worked with the same consultants. It's not the case that merchant account providers use a bevy of effective fraud screening measures which we have now discarded. In reality, most of our friction-elimination is in the removal of information requirements with weak fraud signaling value, and the fixing of senselessly inefficient processes. (You don't fax forms to Stripe.) There is not much fraud screening a traditional merchant account provider does that we can't do. (And there's certainly plenty that we do that they don't do.) - While PayPal is definitely sometimes cheaper, this is the case more rarely than you might think. PayPal has a lot of fine print that has a bearing on the overall cost. We're acutely aware of the challenges of online payment processing. Stripe has actually been handling production transactions for over 18 months. Peter and Elon, two of PayPal's founders, are investors. (Trust me; they remain viscerally aware of just how bad it can get.) None of this is -- or can be -- a proof of how Stripe is invulnerable to fraud. And, of course, we're not. But I can assure you that we get it. We're not oblivious to the challenges, the mechanisms used by others, and their successes and failings. Happy to discuss more over email: I'm patrick@stripe.com.

saurik 15y ago
1) Thank you: I did not find that link while doing a "site:stripe.com chargeback" search on Google. That said, nothing on that page helps me automate the process excepting if I'm willing to parse an as-yet-unknown e-mail message that likely does not have a permanent fixed format. Really, though: why is there no mention at all of chargebacks on the API definition page? PayPal's APIs in this regard are not perfect (I've actually filed some bugs against a few of the more horrendous corner cases recently), but at least they document how chargebacks work, providing an API-driven, machine-automatable process for the entire dispute, reversal, and chargeback set of features. 2) Correct, Xenonauts is not a "scam", it is simply a "bad investment": I used to be in the game development business (http://www.cocommand.com/ http://www.cocommand.com/), and most of these projects don't ever actually happen; of those that do, most do not succeed. To be clear, my wording surrounding "scam" was not about this situation in particular: it is that allowing pre-orders like this is asking for a giant scam to be perpetrated, as described by some of the other posters here on HN; you just accept a ton of payments, "spend" it all, and walk away: you don't have the money anymore, so it will be very difficult for PayPal to get it back. That said, even without "scams", this is still a serious "risk". Remember, this game is not done: the website claims that they are raising money for the development. In essence, they are using pre-orders like Kickstarter. Even worse, their backup plan if they fail is that the money will be refundable if they haven't finished by 2012, despite being clear that they intend to spend the money before then (and we are not talking chump change: they have done $54k in presales). If Stripe is willing to accept clients like this, that means that they are willing to foot the risk for these kinds of companies: in essence, you are acting as a financing option, akin to someone getting a credit card and taking out their entire credit line in cash. Even if most projects like this succeed (incredibly unlikely), your 2.9%+$0.30 margin is not high enough to deal with these companies going belly up. This is why PayPal is actually /correct/ for not allowing these sorts of deals to early stage companies (ones that don't have enough money in the bank, or other assets, to cover any possible risks). I went through their underwriting, and it made me feel happy that they were covering their asses: /I can trust them/. So, I guess what I'm asking here, is: why is it a good thing for my payment processer to be helping early stage startups do debt-backed financing? You say "trustworthy individuals are being prevented from being paid", but whether they are trustworthy or not is irrelevant to whether they are a "reasonable risk": would a bank finance this? Probably not. 3) I would actually love to know what these fine print situations are (I run tons of money through them, and have for years: as far as I know I understand all of their fees ;P); mind going over a few of them here? So far there have been no surprises: 1% extra for cross-border transactions, 2% overhead on currency conversions, $20 chargebacks, and 2.9%+$0.30 with a discount on volume (I am down to 2.2%+$0.30 currently). I normally am doing micropayments, at 5.0%+$0.05, which is much lower for the large number of $1 transactions I am involved with. The one thing I can imagine is (as Stripe doesn't mention it at all), that your international payments (including currency conversion) might have a lower (or even no) overhead, but the majority of those fees are actually paid "on the other end", and the remainder end up being swamped by the discount to 2.2% (and, in my particular case, are orders of magnitude less than the micropayments difference).
saurik 15y ago
FWIW, you not only don't link to that page in your FAQ: you actually don't link to that page at all on your entire site (which is why Google didn't index it). (I just verified this by doing a quick wget -m.) ;P

by pc 15y ago

saurik 15y ago

1) Thank you: I did not find that link while doing a "site:stripe.com chargeback" search on Google. That said, nothing on that page helps me automate the process excepting if I'm willing to parse an as-yet-unknown e-mail message that likely does not have a permanent fixed format. Really, though: why is there no mention at all of chargebacks on the API definition page? PayPal's APIs in this regard are not perfect (I've actually filed some bugs against a few of the more horrendous corner cases recently), but at least they document how chargebacks work, providing an API-driven, machine-automatable process for the entire dispute, reversal, and chargeback set of features. 2) Correct, Xenonauts is not a "scam", it is simply a "bad investment": I used to be in the game development business (http://www.cocommand.com/ http://www.cocommand.com/), and most of these projects don't ever actually happen; of those that do, most do not succeed. To be clear, my wording surrounding "scam" was not about this situation in particular: it is that allowing pre-orders like this is asking for a giant scam to be perpetrated, as described by some of the other posters here on HN; you just accept a ton of payments, "spend" it all, and walk away: you don't have the money anymore, so it will be very difficult for PayPal to get it back. That said, even without "scams", this is still a serious "risk". Remember, this game is not done: the website claims that they are raising money for the development. In essence, they are using pre-orders like Kickstarter. Even worse, their backup plan if they fail is that the money will be refundable if they haven't finished by 2012, despite being clear that they intend to spend the money before then (and we are not talking chump change: they have done $54k in presales). If Stripe is willing to accept clients like this, that means that they are willing to foot the risk for these kinds of companies: in essence, you are acting as a financing option, akin to someone getting a credit card and taking out their entire credit line in cash. Even if most projects like this succeed (incredibly unlikely), your 2.9%+$0.30 margin is not high enough to deal with these companies going belly up. This is why PayPal is actually /correct/ for not allowing these sorts of deals to early stage companies (ones that don't have enough money in the bank, or other assets, to cover any possible risks). I went through their underwriting, and it made me feel happy that they were covering their asses: /I can trust them/. So, I guess what I'm asking here, is: why is it a good thing for my payment processer to be helping early stage startups do debt-backed financing? You say "trustworthy individuals are being prevented from being paid", but whether they are trustworthy or not is irrelevant to whether they are a "reasonable risk": would a bank finance this? Probably not. 3) I would actually love to know what these fine print situations are (I run tons of money through them, and have for years: as far as I know I understand all of their fees ;P); mind going over a few of them here? So far there have been no surprises: 1% extra for cross-border transactions, 2% overhead on currency conversions, $20 chargebacks, and 2.9%+$0.30 with a discount on volume (I am down to 2.2%+$0.30 currently). I normally am doing micropayments, at 5.0%+$0.05, which is much lower for the large number of $1 transactions I am involved with. The one thing I can imagine is (as Stripe doesn't mention it at all), that your international payments (including currency conversion) might have a lower (or even no) overhead, but the majority of those fees are actually paid "on the other end", and the remainder end up being swamped by the discount to 2.2% (and, in my particular case, are orders of magnitude less than the micropayments difference).

saurik 15y ago

FWIW, you not only don't link to that page in your FAQ: you actually don't link to that page at all on your entire site (which is why Google didn't index it). (I just verified this by doing a quick wget -m.) ;P