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Stripe increasing "instant payout" fees by 50%
- qmarchi 2y agoAnyone have a list of providers that use Stripe Connect?
- danpalmer 2y agoThere are going to be thousands. I've seen several small businesses in niche areas that happen to use Stripe Connect to offload all of the payments to a company's existing Stripe account. All companies taking funds via Stripe Connect will know they are doing so via Stripe, so I don't think a list of Connect providers would help here.
- joshstrange 2y agoI’m confused by your question. They mention Connect in the FAQ but this only applies to instant payouts, honestly it seems more confusing that they mention Connect at all in this context. What are you getting at or trying to figure out with your question? I’m interested because my business used Stripe Connect but this change seems to have zero change for me. If businesses want instant payouts they can decide that on their own and if they want to eat the fee, it doesn’t matter to me.
- VoidWhisperer 2y agoThe title feels a bit disengenious. Technically, yes, it was increased by 50% of what it was, but it is a shift from 1% to 1.5%, not up to 50% of each transaction.
- colecut 2y agoThat is what a 50% increase means.
- deleted 2y ago[deleted]
- adolph 2y agoKinda. To the degree that the object of increase is also a percentage the statement “increasing X (where x is quantified as a pct) by Y %” could mean that X of 20% is increased to 70% or to 30%. It would be more clear to state “X increases from Y% to Z%.”
- deleted 2y ago[deleted]
- colecut 2y ago20% to 70% would be quite the fee increase, but I suppose that is a way of thinking of it.
- clipsy 2y agoNo, not kinda. In the example you present, if 20% increased to 70% the appropriate description is either a 250% increase or a 50pp ("percentage point"[0]) increase. [0]: https://en.wikipedia.org/wiki/Percentage_point https://en.wikipedia.org/wiki/Percentage_point
- mtnGoat 2y agoMath doesn’t do “kinda”. If you are paying $100 for something, and then it is $150, that’s is a 50% increase and is an undeniable fact.
- DangitBobby 2y agoPercent increases are kind of a weird metric in a lot of cases. This is one of them. It's not particularly informative.
- colecut 2y agoIf you are a stripe user, it tells you exactly by how much you can expect your fees to increase =)
- qntty 2y agoPercent vs percentage points. It's slightly confusing but the title is correct.
- cplat 2y agoThe title is correct. But I agree that saying "50% increase" conveys less information than saying "1% to 1.5%" (because you don't know 50% of what), and seems to have been used only to make the title more dramatic.
- bananamerica 2y agoI interpreted it as a increase in the fee.
- SoftTalker 2y agoYes, it's editorialized. The actual title is "June 2024 pricing update for Instant Payouts for businesses in the United States"
- wmf 2y agoI understand why companies want to bury bad news under generic titles but that doesn't mean we have to play along. This is a case where "editorializing" the title seems helpful.
- m3kw9 2y agoChoose between “now 1.5%” or “50% increase”
- paulpauper 2y agoA rule of thumb: if it is really bad it will not be reported by the actual company doing it. It will be buried in the TOS and then discovered by angry users, and picked up by media.
- csomar 2y agoI think people who know/use Stripe will have no confusion about this.
- abnercoimbre 2y agoAlthough rare, I use instant payout for my small business. It's a lovely convenience and the extra 1% hit (on top of the usual transaction fees) can be a worthwhile tradeoff. I can't explain it, but the new 1.5% fee killed the motivation to use it entirely.
- dataflow 2y agoI don't feel it's disingenuous at all. When I read the title I instantly understood it to mean multiplying the fee by 1.5. In what world would anyone take this to mean that they're charging 50% of each transaction?
- dataflow 2y agoI don't feel it's disingenuous at all? They're increasing the fee by 50%... of the fee, obviously. In what world would anyone take this to mean that they're charging 50% of each transaction?
- beAbU 2y agoIt's a common problem when reporting on changes of some percentage value. I guess it's more dramatic to say "increased by 50%" rather than "increased by 0.5 points" Common example headline: "Inflation up by 100%" when it went from 1% to 2%. The headline implies goods & services are now 2x more expensive than before, which is not the case.
- tananaev 2y agoWhy is this such an important news? Do people regularly use instant pay out? I would think that it's mostly for emergency situations. Normal payout is still free.
- notatoad 2y agoI don't think the bar for appearing on the front page of HN is "important news" This is mildly interesting, and maybe important for a few people. That's enough.
- immibis 2y agoIt's apparently lower than "I made a raycaster in 256 bytes" and higher than "I got banned from Stack Exchange for not supporting Israel". I can't really tell where the bar is.
- amatecha 2y agoDid I miss something? The most recent post with the word "banned" in the title was apparently 5 days ago...
- Gasp0de 2y agoI can't see where the original post links to, but if what the commenter said is true, you got banned not for "not supporting Israel" but instead for "supporting the slaughter of 200 teenagers".
- gjsman-1000 2y agoIf I remember correctly, payouts always take two or three days to clear, to comply with all of the settlement and legal processes. The “instant payout” is actually a temporary loan from an entity already approved as having all funds available for immediate disposal at multiple links in the chain. This is then used to create the illusion of an instant payout… while the “loan” guarantor receives payment 2-3 days later. This is also why there’s actually a “instant payout” limit on your Stripe account, almost like a credit limit - because it basically is credit.
- contingencies 2y agoSounds like a blockchain startup in the making!
- vel0city 2y agoWhere you'll pay fees on the chain, fees at the exchange trading for fiat, and then fees sending the fiat back to your bank so you can actually make payroll with money normal people actually use.
- contingencies 2y agoYou would presumably use a faster and cheaper off-chain method of settlement (such as bank or exchange-local settlement) using on-chain contracts with near real time periodically executed and publicly auditable settlement of the derivative CDOs. See other response.
- lxgr 2y agoHow would blockchain accelerate ACH transfers (or make wire transfers cheaper, or convince banks to support FedNow)?
- contingencies 2y agoCaching, reputation and promises make the world go 'round. Exhibit A) SWIFT famously states it doesn't actually move money. Exhibit B) Hawallah ie. It's good enough to promise to deliver in due course most of the time. That's equivalent to a transfer, most of the time. The evidence is that it is the basis of many existing settlement networks (SWIFT/hawallah), but also the stock market / individual broker ledger system, the dominant off-chain transfer model of many exchanges for digital assets, crime ("you have X days to deliver Y or Z happens"), etc. Where it's not good enough, you attempt to store enough to cover eventualities with forward prediction to maintain settlement volumes, offset with promises, utilise third party risk mitigators (insurance/liquidity providers) and/or leverage reputation. Speaking hypothetically, because the original comment was made predominantly in jest, but in the knowledge that it was actually potentially applicable enough to yield startups, let me humor you. Specifically, in my mind where blockchain might add value is if you wanted to obtain local liquidity at short notice. I understand micro-lending markets are now well developed on Ethereum, but haven't bothered to dig in to the implementation myself. The point is, it would be theoretically possible to build such a system to translate real world promises to on-chain contracts and thus have the ongoing support of globally distributed capital behind providing stability to local micro imbalances of liquidity as a service. This is an existing business model seen in many aspects of the financial system. Start looking at the world this way, and notice similarities between capitalism, crime, crypto, cold steel and cojones. It's all the same game. Physical or digital, settled or promised, it's about risk and reward, reputation, and "the availability of effective recourse" (ie. trust). The same band-aids are used everywhere.
- lazyant 2y ago> Navigate to the Payouts section of your Balances page > Filter by “method” I have no "method" filter on that page, only "date", "amount" and "status". Also they talk about 2 business days payments as default but in the settings you can only choose between automatic every day / week / month. Since the instant payout is kind of a loan and you have to request it, pretty sure it doesn't affect me but it's all very confusing.
- tjbiddle 2y agoThey likely meant the ACH is 2 business days.
- toomuchtodo 2y agoStripe could choose to support FedNow instant payments and push these funds for pennies (up to $100k at a time), assuming the receiving institution hosting the deposit account(s) is set to receive on those rails. They would arrive within 20 seconds, per FedNow’s SLA. Only costs ~$25/month to plug into these rails, plus a few cents per transaction. https://www.frbservices.org/financial-services/fednow/organizations https://www.frbservices.org/financial-services/fednow/organi... https://www.frbservices.org/resources/fees/fednow-2024 https://www.frbservices.org/resources/fees/fednow-2024 https://www.frbservices.org/binaries/content/assets/crsocms/financial-services/fednow/prepare-for-fednow/fednow-service-readiness-guide.pdf https://www.frbservices.org/binaries/content/assets/crsocms/...
- tiffanyh 2y agoInteresting to see from that list that Bank of America, Citigroup, Capital One & PNC missing from the list. Appears they are still lagging in adopting FedNow (while Wells Fargo and US Bank have adopted)
- deleted 2y ago[deleted]
- toomuchtodo 2y ago
- gnicholas 2y agoWhat would be the reason for them to boost this fee right now? Is it just a pure profit play? That is, they think they can extract more cash from the people who are reliable instant-payout users (rather than losing them to standard payouts)? Does this portend anything for the company, in the way that not backfilling positions means that layoffs may be imminent? Or perhaps a corporate transaction like an IPO?
- mike_d 2y agoFor any payment processor part of the fees you pay go to offsetting fraud (it is a cost just like servers or people). Instant payout is much riskier because if a bad actor is using Stripe to cash out stolen credit cards they have less time for the banks to detect and report it before the money is gone. As a result it has a higher cost to the company.
- schmidt_fifty 2y ago[dead]
- Brystephor 2y agoGenuine question: Is fraud actually something that costs Stripe money when it comes to payouts? The reason credit card fraud for charges costs money to processors is because of charge backs. I believe charge back fees originate from the card networks themselves (Visa, MasterCard, etc). These processors also enforce a variety of limits when it comes to chargebacks for each merchant. This means if you're the layer between the merchant and the network, the merchants generally will rely on you to pre-emptively detect fraud. Those systems all cost money too. As far as I know when it comes to payout rails such as ACH, real time payments (RTP), Zelle, I don't believe the payment processor holds any liability for fraudulent transactions. In other words, if a fraudulent payout occurs through stripe via RTP then The Clearing House banks aren't going to come after stripe for the money. They'll tell the end user "whoops, should've taken better care of your digital info. Bye!" source: Worked at a payment processor and worked on payout rails and integrating with banks. Also do work now as an end user of a different payment processor that does charging, payouts, etc.
- redder23 2y ago[dead]
- pentagrama 2y agoA more honest title to me: Stripe increasing "instant payout" fees from 1% to 1.5% on US Current title: Stripe increasing "instant payout" fees by 50%
- epgui 2y agoThe current title is fine. It’s a 50% increase (unambiguously), or a 0.5 percentage point increase (also unambiguously).
- sitzkrieg 2y agolets run away from math if it sounds bad!
- Gasp0de 2y agoOk so if something previously was free and now costs 1c per transaction, you would think "Stripe increasing price infinitely" would be a good title? Just because it is true that doesn't make it a good title. A good title should create a realistic expectation of the article content.
- pytness 2y agoUsing percentages as means of manipulating the masses has always been a thing. "There has been a 1000% increase in traffic deaths this year, we must do something!" Ah yes, we went from 1 death per year to 11 because there was a fatal bus accident, surely we need to do something.
- ggm 2y agoFees on payment methods are a good example of the kind of friction we wanted to get rid of, agreeing to use these intermediaries. If we've just replaced stupid inter-bank 3 day cheque clearing bullshit fees with stupid microtransaction fees which are variable at-will by the guy in the middle, whats the point? Money is regulated. Money flows should be regulated. This industry should be regulated, and the fees set to cost recovery, not profit point. If that reduces to one interchange agency per economy, I'd be fine: Nationalise them all. Does it cost the CPU more to process $1b in one transaction than to process 10c?
- encoderer 2y agoStripe will nickel and dime you to death. The last time I created an invoice manually it tried to upsell me on a far more expensive plan just so I can group things on an invoice. Even worse, adding a recurring product to a quote results in an upsell. It’s honestly embarrassing. Feature-gating things with 0 marginal cost feels desperate.
- mysore 2y agowelcome to every business in america.
- barryrandall 2y agoBusinesses want value-based pricing on their sales, cost plus (a small) margin on their expenses.
- edpichler 2y agoYes. Moreover, the goal of most of the companies. Competition is what holds it.
- abnercoimbre 2y agoTheir payment links take on the form of buy.stripe.com/<id> but they added the ability to use your custom domain for $10/mo ... Why isn't this baked-in?
- Animats 2y ago1.5% for a 2 day loan is an APR of what? More than 270%.
- naniwaduni 2y agoWhen you're competing with payday loans, it makes sense to price the product similarly...
- wnc3141 2y agoIn other news, the cost of no ey has increased several hundred percent since 2019.
- teddyX 2y agoPayday loans are cheaper
- southernplaces7 2y agoYawn. In some countries at least, (mine for example) Paypal does the same. If I get a payment (and let me add that I detest paypal but, such are the choices of some employers), I can wait 24 to 48 hours for my money, or I can get it instantly at any time Monday to Friday between 6:15 am and 10 pm, but at an additional cost of roughly 3 dollars. Bear in mind that this is on top of their atrocious, thieving obligatory exchange rates and any other fees they tack onto payments sent to you. Of course I'm nearly certain that sending me that money instantly costs Paypal nothing, but enshittification creeps into all things, sort of like the dust created by dead skin and human trash. It permeates. Though in Paypal's case, shitty service has been a byword for decades already. Edit: when occasionally receiving payments in crypto on the other hand, I get charged minimal fees, can convert to my local currency at essentially market exchange rate, and can have the money transferred to my actual bank account at any time 24/7 for free. Yes yes, HN hates crypto and blah blah, but outside the bubble, there are people who find these things useful.
- amadeuspagel 2y agoThat isn't the title of the page and a great illustration of why we should always speak in percentage points or real numbers. "Shark attacks increase by 300%" (from one to four) is a textbook example of a tabloid headline.
- cemerick 2y agoIt's impossible to talk about real numbers in this case of course, and speaking strictly about percentage points or bips doesn't capture the thrust of the change (or situate it accurately vis a vis stripe's continual fee inflation, i.e. see elsewhere others' comments ~"stripe has been nickel and diming us for years"). In an era where stripe has used its cache to capture certain business communities wholesale and then ratcheted up pricing in ways you wouldn't expect outside of a monopoly player IMO, I think it's helpful to be super clear about the relative change rather than absolute change.
- deleted 2y ago[deleted]