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I naively thought that the likes of Stripe existed in order to abstract away this issue. Sort of like how TransferWise will give you a US, UK, EU, and others, a

I naively thought that the likes of Stripe existed in order to abstract away this issue. Sort of like how TransferWise will give you a US, UK, EU, and others, account number. If I want to send Euros to GB, simply pay the local EU account number for free, then cash out in the UK for a minimal TransferWise fee (up to hundredths of the fee for sending it via the banks themselves). So stripe here would charge an EU card from its EU entity, US from the US, GB from GB etc etc, regardless of where the merchant is actually located. Maybe there is something fundamentally different with the workings of Visa / MC payments and clearing though that means this is not possible?

lapser 5y ago
They've probably been eating up the Visa/MC cross border payment increases until now, and now they're starting to charge for that too.
plantain 5y ago
I wish - as an Australian company predominantly selling to US/EU, I pay 3% on almost all transactions...
traceroute66 5y ago
TransferWise are not a bank, they are an Electronic Money Institution. Different kettle of fish. The accounts they give you are virtual accounts, not a real bank account. TransferWise also have larger profit margins than you think, both explicit and implicit by playing funny games cherry-picking rates etc. So for both of the above reasons, this is why TransferWise can do what they do about giving people accounts cross-border. A lot (most) of it is legal flexibility, the rest is by eating the costs. There are very few UK banks left that will give you a true EUR account. Financial services were not part of the Brexit "deal". Which is why UK peeps can't open bank accounts in Europe and vice-versa, too many unaddressed regulatory issues. Cross-border card fees may well be a similar kettle of fish to the phone roaming charges, i.e. there was protection under EU, but now the UK is outside of the EU it's dog eat dog. Its a bit like why Amazon UK stopped accepting Visa for a while. Because post-Brexit Visa hiked their rates mostly just because they could. I'm afraid that given the hard brexit that the UK government has chosen, the UK is only going to see a lot more of this. Brexit itself was bad enough, a dogged persuit of the hard form is, to put it politely, not exactly helping matters.
- zahllos 5y ago
  I don't think Amazon UK ever stopped accepting VISA entirely. They threatened to, and then I think they blinked at the last minute. It was also only specifically VISA Credit, not Debit cards, which continued to work. I'll be honest, it was a struggle to get a EUR account in the UK before Brexit. I'm not aware of any high street banks that offered it easily, although I have been told it is possible. Most said something along the lines of "you want the international version of our bank" which roughly means either Isle of Man, Channel Islands or Gibraltar established outfit with similar branding. In contrast, I have a EUR account in Switzerland and can easily get a USD or GBP one. Most
  - Symbiote 5y ago
    Switzerland's historical approach to banking is closer to Guernsey's, and a local resident of Guernsey could open a USD/EUR account at their local branch. But for what it's worth, Barclays, HSBC, Lloyds and NatWest offer these accounts, and more banks offer them to businesses. https://wise.com/gb/blog/multi-currency-accounts-you-can-open-in-the-uk https://wise.com/gb/blog/multi-currency-accounts-you-can-ope...
  - traceroute66 5y ago
    > I don't think Amazon UK ever stopped accepting VISA entirely. They threatened to, and then I think they blinked at the last minute. On the former, you are correct, my bad wording. On the latter, I would suggest they probably reached a last-minute deal with VISA rather than blinking of their own accord. > I'm not aware of any high street banks that offered it easily Barclays and (IIRC) HSBC. Barclays still do[1], the only pre-requisite being you hold a GBP account with them too. There's also Starling these days, of course. Citibank was a great place to get one too, but then they introduced account minimums to keep the unwashed masses out. [1] https://www.barclays.co.uk/current-accounts/euro-account/ https://www.barclays.co.uk/current-accounts/euro-account/
    - zahllos 5y ago
      > I would suggest they probably reached a last-minute deal with VISA rather than blinking of their own accord. Yeah. I honestly wonder how that worked out. I suspect Amazon account for a not-insubstantial amount of payments so you have to wonder how that standoff was resolved. > Barclays and (IIRC) HSBC Interesting. Yes, most of the international accounts have some kind of minimum something, which is annoying. Euro and USD accounts are then possible. Other currencies they want you to hold a lot more money to get them. I can see why transferwise have a market.
jenny91 5y ago
No, Stripe is a payment processor; they don't want to deal with issues moving your money around. They do their best abstracting the country- and payment method specific stuff to make it easy for you to accept people's money, but not to shuffle it around countries.
muse900 5y ago
"So stripe here would charge an EU card from its EU entity, US from the US, GB from GB etc etc, regardless of where the merchant is actually located. Maybe there is something fundamentally different with the workings of Visa / MC payments and clearing though that means this is not possible?" Not really. The transaction happens on the country the merchant Operates. If you are a merchant within the EU and stripe accepts a txn on your behalf, if that txn is from a card issued by a UK institution you will be charged the extra fee.
- ksec 5y ago
  >The transaction happens on the country the merchant Operates. In order to achieve what parent said, the merchant will have to have a legal entity in every single country where they have customers in, and setup payment processing account within those jurisdiction. So I am wonder at what sort of revenue does it make sense to do this. Assuming this process could somehow be automated / abstracted and the only cost are legal and accounting. ( i.e Cost that cant be avoided )
  - alasdair_ 5y ago
    Not really, it would be enough to have a single entity in the EU for all EU countries.
  - toast0 5y ago
    I'd imagine there are ways to set up such entities for not a lot of money, but selling to a jurisdiction has a lot more obligations when you're a legal entity in that jurisdiction instead of just exporting to it.
chmod775 5y ago
>I naively thought that the likes of Stripe existed in order to abstract away this issue. This is the least of your worries when selling globally. VAT is where the real fun starts.
- alibarber 5y ago
  Oh I’m well aware. And recent changed within the EU itself have not made things easier… [even selling within the EU, you must now charge VAT for the product in question at the destination country, not the local rate, and with zero threshold]
- CodesInChaos 5y ago
  At least one applicable VAT rate for each of the 27 EU countries is simple enough to implement yourself. The US has a mess of thousands of jurisdictions with their own taxes, where it's difficult to even tell in which jurisdiction an address falls, so you're pretty much forced to use a service like Avalara.

lapser 5y ago

They've probably been eating up the Visa/MC cross border payment increases until now, and now they're starting to charge for that too.

plantain 5y ago

I wish - as an Australian company predominantly selling to US/EU, I pay 3% on almost all transactions...

traceroute66 5y ago

TransferWise are not a bank, they are an Electronic Money Institution. Different kettle of fish. The accounts they give you are virtual accounts, not a real bank account. TransferWise also have larger profit margins than you think, both explicit and implicit by playing funny games cherry-picking rates etc. So for both of the above reasons, this is why TransferWise can do what they do about giving people accounts cross-border. A lot (most) of it is legal flexibility, the rest is by eating the costs. There are very few UK banks left that will give you a true EUR account. Financial services were not part of the Brexit "deal". Which is why UK peeps can't open bank accounts in Europe and vice-versa, too many unaddressed regulatory issues. Cross-border card fees may well be a similar kettle of fish to the phone roaming charges, i.e. there was protection under EU, but now the UK is outside of the EU it's dog eat dog. Its a bit like why Amazon UK stopped accepting Visa for a while. Because post-Brexit Visa hiked their rates mostly just because they could. I'm afraid that given the hard brexit that the UK government has chosen, the UK is only going to see a lot more of this. Brexit itself was bad enough, a dogged persuit of the hard form is, to put it politely, not exactly helping matters.

zahllos 5y ago
I don't think Amazon UK ever stopped accepting VISA entirely. They threatened to, and then I think they blinked at the last minute. It was also only specifically VISA Credit, not Debit cards, which continued to work. I'll be honest, it was a struggle to get a EUR account in the UK before Brexit. I'm not aware of any high street banks that offered it easily, although I have been told it is possible. Most said something along the lines of "you want the international version of our bank" which roughly means either Isle of Man, Channel Islands or Gibraltar established outfit with similar branding. In contrast, I have a EUR account in Switzerland and can easily get a USD or GBP one. Most
- Symbiote 5y ago
  Switzerland's historical approach to banking is closer to Guernsey's, and a local resident of Guernsey could open a USD/EUR account at their local branch. But for what it's worth, Barclays, HSBC, Lloyds and NatWest offer these accounts, and more banks offer them to businesses. https://wise.com/gb/blog/multi-currency-accounts-you-can-open-in-the-uk https://wise.com/gb/blog/multi-currency-accounts-you-can-ope...
- traceroute66 5y ago
  > I don't think Amazon UK ever stopped accepting VISA entirely. They threatened to, and then I think they blinked at the last minute. On the former, you are correct, my bad wording. On the latter, I would suggest they probably reached a last-minute deal with VISA rather than blinking of their own accord. > I'm not aware of any high street banks that offered it easily Barclays and (IIRC) HSBC. Barclays still do[1], the only pre-requisite being you hold a GBP account with them too. There's also Starling these days, of course. Citibank was a great place to get one too, but then they introduced account minimums to keep the unwashed masses out. [1] https://www.barclays.co.uk/current-accounts/euro-account/ https://www.barclays.co.uk/current-accounts/euro-account/
  - zahllos 5y ago
    > I would suggest they probably reached a last-minute deal with VISA rather than blinking of their own accord. Yeah. I honestly wonder how that worked out. I suspect Amazon account for a not-insubstantial amount of payments so you have to wonder how that standoff was resolved. > Barclays and (IIRC) HSBC Interesting. Yes, most of the international accounts have some kind of minimum something, which is annoying. Euro and USD accounts are then possible. Other currencies they want you to hold a lot more money to get them. I can see why transferwise have a market.

jenny91 5y ago

No, Stripe is a payment processor; they don't want to deal with issues moving your money around. They do their best abstracting the country- and payment method specific stuff to make it easy for you to accept people's money, but not to shuffle it around countries.

muse900 5y ago

"So stripe here would charge an EU card from its EU entity, US from the US, GB from GB etc etc, regardless of where the merchant is actually located. Maybe there is something fundamentally different with the workings of Visa / MC payments and clearing though that means this is not possible?" Not really. The transaction happens on the country the merchant Operates. If you are a merchant within the EU and stripe accepts a txn on your behalf, if that txn is from a card issued by a UK institution you will be charged the extra fee.

ksec 5y ago
>The transaction happens on the country the merchant Operates. In order to achieve what parent said, the merchant will have to have a legal entity in every single country where they have customers in, and setup payment processing account within those jurisdiction. So I am wonder at what sort of revenue does it make sense to do this. Assuming this process could somehow be automated / abstracted and the only cost are legal and accounting. ( i.e Cost that cant be avoided )
- alasdair_ 5y ago
  Not really, it would be enough to have a single entity in the EU for all EU countries.
- toast0 5y ago
  I'd imagine there are ways to set up such entities for not a lot of money, but selling to a jurisdiction has a lot more obligations when you're a legal entity in that jurisdiction instead of just exporting to it.

chmod775 5y ago

>I naively thought that the likes of Stripe existed in order to abstract away this issue. This is the least of your worries when selling globally. VAT is where the real fun starts.

alibarber 5y ago
Oh I’m well aware. And recent changed within the EU itself have not made things easier… [even selling within the EU, you must now charge VAT for the product in question at the destination country, not the local rate, and with zero threshold]
CodesInChaos 5y ago
At least one applicable VAT rate for each of the 27 EU countries is simple enough to implement yourself. The US has a mess of thousands of jurisdictions with their own taxes, where it's difficult to even tell in which jurisdiction an address falls, so you're pretty much forced to use a service like Avalara.