4 ms·

As someone who worked in the payment gateway industry, they go through underwriting. They provide all necessary documentation, a person reviews it and periodica

by jabart 3y ago

As someone who worked in the payment gateway industry, they go through underwriting. They provide all necessary documentation, a person reviews it and periodically re-reviews that information. Another item to note is that the Sponsor Bank sets most of these rules. For a product that is making <$100/mo, the risk is too great and not worth answering a ton of questions every month by the sponsor bank and/or visa/mc each time the re-review comes up.

grose 3y ago
Appreciate the inside perspective.
londons_explore 3y ago
This. It's a simple calculation of risk vs profit. Payment gateways are happy to put up with more risk, and put more effort into de-risking you as a client, if they are getting lots of profits from you. Whereas if you have a turnover of $10k/year, and they're earning only 0.5% of that in fees, then it isn't worth them taking much risk or putting much effort in to earn $50. It would be nice if people like stripe were more upfront about this. They could easily say "We have determined that your business might be high risk for us. If you pay us $1000 (which will be credited towards transaction fees), then we will work with you to mitigate these risks".
- freedomben 3y ago
  > It would be nice if people like stripe were more upfront about this. They could easily say "We have determined that your business might be high risk for us. If you pay us $1000 (which will be credited towards transaction fees), then we will work with you to mitigate these risks". Nowadays people are tip-toe-ing around egg shells constantly to avoid being the latest outrage that goes viral, but that would be wildly refreshing to see. Honesty from companies (even internally when you work for them!) is getting so rare that a blunt and honest message like that makes me happy just to think about. It would be awesome to start a new cultural movement toward radical honesty. Just being able to acknowledge the realities around incentives would be a great start.
  - salawat 3y ago
    Problem is our common law system incentivizes dishonesty. There is also the problem that everyone tends to start suing the financier if they can't get the results they want out of the business, and the cumulative end result is that financial institutions (through the resulting excess of caution) have become de facto arbiters of legitimate economic activity rather than dumb pipes. For some people this is apparently okay and desirable. To me it's horrifying, and tends toward centralizing power far too much.

by jabart 3y ago

grose 3y ago

Appreciate the inside perspective.

londons_explore 3y ago

This. It's a simple calculation of risk vs profit. Payment gateways are happy to put up with more risk, and put more effort into de-risking you as a client, if they are getting lots of profits from you. Whereas if you have a turnover of $10k/year, and they're earning only 0.5% of that in fees, then it isn't worth them taking much risk or putting much effort in to earn $50. It would be nice if people like stripe were more upfront about this. They could easily say "We have determined that your business might be high risk for us. If you pay us $1000 (which will be credited towards transaction fees), then we will work with you to mitigate these risks".

freedomben 3y ago
> It would be nice if people like stripe were more upfront about this. They could easily say "We have determined that your business might be high risk for us. If you pay us $1000 (which will be credited towards transaction fees), then we will work with you to mitigate these risks". Nowadays people are tip-toe-ing around egg shells constantly to avoid being the latest outrage that goes viral, but that would be wildly refreshing to see. Honesty from companies (even internally when you work for them!) is getting so rare that a blunt and honest message like that makes me happy just to think about. It would be awesome to start a new cultural movement toward radical honesty. Just being able to acknowledge the realities around incentives would be a great start.
- salawat 3y ago
  Problem is our common law system incentivizes dishonesty. There is also the problem that everyone tends to start suing the financier if they can't get the results they want out of the business, and the cumulative end result is that financial institutions (through the resulting excess of caution) have become de facto arbiters of legitimate economic activity rather than dumb pipes. For some people this is apparently okay and desirable. To me it's horrifying, and tends toward centralizing power far too much.