6 ms·

With Stripe's straight-forward pricing at 2.9% + $0.30, I don't understand the pricing ambiguity here: "and Stripe, our payments processor, will apply credit c

by zefhous 12y ago

With Stripe's straight-forward pricing at 2.9% + $0.30, I don't understand the pricing ambiguity here: "and Stripe, our payments processor, will apply credit card processing fees (about 3-5%)." Why 3-5%? Is there something I'm missing?

deleted 12y ago
[deleted]
dragonwriter 12y ago
Kickstarter may feel that for the audience for this announcement it is better to use an approximate percentage alone rather than a percentage plus flat fee description, and if you assume that $15 is at the low end of Kickstarter contribution levels, its pretty close to the point where 2.9%+$0.30 is 5%, so "about 3-5%" may well be a reasonably accurate description of the fee structure.
- pc 12y ago
  Yep, this is what they're getting at. (I work at Stripe.)
  - abritishguy 12y ago
    >work at stripe That's an understatement ;)
    - deleted 12y ago
      [deleted]
- happyscrappy 12y ago
  Plus no one will complain if the fee shows up as lower but there will be howls if it is larger.
kelukelugames 12y ago
Different credit cards charge different percentages.
- lsaferite 12y ago
  But Stripe doesn't charge different percentages.
- jf22 12y ago
  No that doesn't make sense. Stripe's fees don't change per card.
  - anebg 12y ago
    It does make sense, but it is not factually correct. Typically, (big) payment processors deal with different interchange fees for different card types (based off the BIN number-- premium cards, debit cards, reward cards). Processors commonly group fee percentages into an easier scheme to sell to people. "2.9% + .30" is a lot easier to reason and understand than "2.2% for Debit, 3.5% for AMEX, 2.9% for Bank of America" and so on. So yes, different cards charge different interchange rates -- but the answer to the question lies in the fact that with small enough purchases, the 30 cents on top of the 2.9% could effectively increase the percentage to a higher rate. The simple formula to calculate fees as a percentage of purchase would be y= (x*.029+.30)/x and it intercepts with 5% at about $14.28, which would suggest that the minimum contribution would be set around $15 to make their statement correct. A a much higher contribution of $300 would have a lower rate of approx 3%, as the cents become a rather unimportant part of the fee. Why do processors like doing this? It's a way to subsidize micro-payments without creating convoluted fee schedules. They can collect ~33% of a $1 payment without advertising it as such.
  - deleted 12y ago
    [deleted]
- ZoF 12y ago
  No. Stripe charges a flat 3.0% + $0.30 for each transaction, regardless of the card provider. The other child comment proposes the likely reason for the 3-5% ambiguity; that $0.30 flat fee can have a percent impact on smaller purchases.
aqme28 12y ago
2.9% + $.30 of a $1000 purchase is ~3%. 2.9% + $.30 of $15 is closer to 5%. I'm not sure what the minimum purchase is on Kickstarter but that could explain it.
patmcc 12y ago
Depending on the size of the average transaction, that $0.30 could move the fee (taken as a percentage) into that bracket. Possibly kickstarter is just being a bit loose with the phrasing here, and possibly they're under a enterprise agreement with a different fee structure (they are going to do $1billion+ a year, so that wouldn't be a complete surprise).
hackerboos 12y ago
Last time I looked 'crowdfunding' was on the prohibited businesses list for Stripe. Kickstarter might have cut a deal to pay a higher percentage in order to be allowed to use Stripe.
- kordless 12y ago
  That hysterical because my Kickstarter got denied because they said my project was 'prohibited' because it was a financial service. It's actually an Open Source project: https://www.github.com/stackmonkey https://www.github.com/stackmonkey.
- kordless 12y ago
  That hysterical because my Kickstarter got denied because they said my project was 'prohibited' because it was a financial service. It's actually an Open Source project: https://www.github.com/stackmonkey https://www.github.com/stackmonkey.
- kordless 12y ago
  That hysterical because my Kickstarter got denied because they said my project was 'prohibited' because it was a financial service. It's actually an Open Source project: https://www.github.com/stackmonkey https://www.github.com/stackmonkey.
- kordless 12y ago
  That hysterical because my Kickstarter got denied because they said my project was 'prohibited' because it was a financial service. It's actually an Open Source project: https://www.github.com/stackmonkey https://www.github.com/stackmonkey.
- kordless 12y ago
  Foo.
- kordless 12y ago
  That hysterical because my Kickstarter got denied because they said my project was 'prohibited' because it was a financial service. It's actually an Open Source project: https://www.github.com/stackmonkey https://www.github.com/stackmonkey.

by zefhous 12y ago

deleted 12y ago

[deleted]

dragonwriter 12y ago

Kickstarter may feel that for the audience for this announcement it is better to use an approximate percentage alone rather than a percentage plus flat fee description, and if you assume that $15 is at the low end of Kickstarter contribution levels, its pretty close to the point where 2.9%+$0.30 is 5%, so "about 3-5%" may well be a reasonably accurate description of the fee structure.

pc 12y ago
Yep, this is what they're getting at. (I work at Stripe.)
- abritishguy 12y ago
  >work at stripe That's an understatement ;)
  - deleted 12y ago
    [deleted]
happyscrappy 12y ago
Plus no one will complain if the fee shows up as lower but there will be howls if it is larger.

kelukelugames 12y ago

Different credit cards charge different percentages.

lsaferite 12y ago
But Stripe doesn't charge different percentages.
jf22 12y ago
No that doesn't make sense. Stripe's fees don't change per card.
- anebg 12y ago
  It does make sense, but it is not factually correct. Typically, (big) payment processors deal with different interchange fees for different card types (based off the BIN number-- premium cards, debit cards, reward cards). Processors commonly group fee percentages into an easier scheme to sell to people. "2.9% + .30" is a lot easier to reason and understand than "2.2% for Debit, 3.5% for AMEX, 2.9% for Bank of America" and so on. So yes, different cards charge different interchange rates -- but the answer to the question lies in the fact that with small enough purchases, the 30 cents on top of the 2.9% could effectively increase the percentage to a higher rate. The simple formula to calculate fees as a percentage of purchase would be y= (x*.029+.30)/x and it intercepts with 5% at about $14.28, which would suggest that the minimum contribution would be set around $15 to make their statement correct. A a much higher contribution of $300 would have a lower rate of approx 3%, as the cents become a rather unimportant part of the fee. Why do processors like doing this? It's a way to subsidize micro-payments without creating convoluted fee schedules. They can collect ~33% of a $1 payment without advertising it as such.
- deleted 12y ago
  [deleted]
ZoF 12y ago
No. Stripe charges a flat 3.0% + $0.30 for each transaction, regardless of the card provider. The other child comment proposes the likely reason for the 3-5% ambiguity; that $0.30 flat fee can have a percent impact on smaller purchases.

aqme28 12y ago

2.9% + $.30 of a $1000 purchase is ~3%. 2.9% + $.30 of $15 is closer to 5%. I'm not sure what the minimum purchase is on Kickstarter but that could explain it.

patmcc 12y ago

Depending on the size of the average transaction, that $0.30 could move the fee (taken as a percentage) into that bracket. Possibly kickstarter is just being a bit loose with the phrasing here, and possibly they're under a enterprise agreement with a different fee structure (they are going to do $1billion+ a year, so that wouldn't be a complete surprise).

hackerboos 12y ago

Last time I looked 'crowdfunding' was on the prohibited businesses list for Stripe. Kickstarter might have cut a deal to pay a higher percentage in order to be allowed to use Stripe.

kordless 12y ago
That hysterical because my Kickstarter got denied because they said my project was 'prohibited' because it was a financial service. It's actually an Open Source project: https://www.github.com/stackmonkey https://www.github.com/stackmonkey.
kordless 12y ago
That hysterical because my Kickstarter got denied because they said my project was 'prohibited' because it was a financial service. It's actually an Open Source project: https://www.github.com/stackmonkey https://www.github.com/stackmonkey.
kordless 12y ago
That hysterical because my Kickstarter got denied because they said my project was 'prohibited' because it was a financial service. It's actually an Open Source project: https://www.github.com/stackmonkey https://www.github.com/stackmonkey.
kordless 12y ago
That hysterical because my Kickstarter got denied because they said my project was 'prohibited' because it was a financial service. It's actually an Open Source project: https://www.github.com/stackmonkey https://www.github.com/stackmonkey.
kordless 12y ago
Foo.
kordless 12y ago
That hysterical because my Kickstarter got denied because they said my project was 'prohibited' because it was a financial service. It's actually an Open Source project: https://www.github.com/stackmonkey https://www.github.com/stackmonkey.