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The flipside of this is most processors have not updated their fee schedule to pass on these savings to smaller merchants. Square still charges 2.75% on debit

by abalone 12y ago

The flipside of this is most processors have not updated their fee schedule to pass on these savings to smaller merchants. Square still charges 2.75% on debit cards. Stripe, 2.9% + $0.30. They are making a killing on debit cards. If and when the processor market catches up with interchange regulations there may be a material impact on these companies' revenue models. (Square is already trying to diversify beyond basic processing.)

shawnee_ 12y ago
Yup. http://ink.hackeress.com/2014/12/crowdfunding-is-too-expensive-payments.html http://ink.hackeress.com/2014/12/crowdfunding-is-too-expensi... Treating everything by default like it's a credit card transaction is _the_ glitch in the matrix... these companies are not "like" a cartel... they are a cartel. The screenshot in the article is from my friend's campaign to raise money for her dog that got hit by a car in AK.. We surveyed everybody, and they all donated with cash from their bank accounts (debit). Nobody put their donation on a credit card. Nobody does that. Somebody should do one of these graphics for The Oatmeal's Exploding Kitten kickstarter campaign... Stripe has already made over $250K on this project alone (more profitable than 95 percent of Kickstarter campaigns).
abalone 12y ago
I should clarify one thing: because debit interchange is primarily a fixed fee ($0.21), Square's percentage-only rate actually hurts them on debit transactions below $10. They lose money. Of course there's a correspondingly large margin on higher-value debit transactions for the same reason. Also worth noting that Square Cash uses debit, so they're actually losing >$0.21 every time you send money with it. Stripe definitely has a large gross margin in all cases. Even AmEx. However, one thing to bear in mind with both these guys is that the easier they make it to sign up and process payments with them, the easier it is for criminals to run fraudulent transactions through them, which they ultimately eat.

by abalone 12y ago

shawnee_ 12y ago

Yup. http://ink.hackeress.com/2014/12/crowdfunding-is-too-expensive-payments.html http://ink.hackeress.com/2014/12/crowdfunding-is-too-expensi... Treating everything by default like it's a credit card transaction is _the_ glitch in the matrix... these companies are not "like" a cartel... they are a cartel. The screenshot in the article is from my friend's campaign to raise money for her dog that got hit by a car in AK.. We surveyed everybody, and they all donated with cash from their bank accounts (debit). Nobody put their donation on a credit card. Nobody does that. Somebody should do one of these graphics for The Oatmeal's Exploding Kitten kickstarter campaign... Stripe has already made over $250K on this project alone (more profitable than 95 percent of Kickstarter campaigns).

abalone 12y ago

I should clarify one thing: because debit interchange is primarily a fixed fee ($0.21), Square's percentage-only rate actually hurts them on debit transactions below $10. They lose money. Of course there's a correspondingly large margin on higher-value debit transactions for the same reason. Also worth noting that Square Cash uses debit, so they're actually losing >$0.21 every time you send money with it. Stripe definitely has a large gross margin in all cases. Even AmEx. However, one thing to bear in mind with both these guys is that the easier they make it to sign up and process payments with them, the easier it is for criminals to run fraudulent transactions through them, which they ultimately eat.