5 ms·
It's a nice spread too. They take a 2.9% fee for charging a debit/check card, but pay Visa as little as 0.05% + $0.21.
by dangrossman 11y ago
It's a nice spread too. They take a 2.9% fee for charging a debit/check card, but pay Visa as little as 0.05% + $0.21.
- onetallnerd 11y agoNice? 2.9% sounds horrible. Why do we pay that much again?
- deleted 11y ago[deleted]
- vonklaus 11y agoI think the comment meant it was a nice spread for Stripe. It then pointed out the delta.
- jkestner 11y agoWhy do we pay that much again? Assuming risk.
- dangrossman 11y agoI'm paying 0.15% + $0.26 for those transactions through another MSP. I think many people are paying the 2.9% for the convenience Stripe and PayPal offer over applying for and integrating a merchant account and gateway, not because they're a huge risk and nobody else would take their business at lower rates.
- jkestner 11y agoBut that doesn't include the credit card association's 2.10% or whatever, does it? Stripe does. Yes, collapsing the confusing levels of this process is certainly worth something.
- dangrossman 11y agoNo, it does include that fee. That 0.05% + $0.21 I referenced is the interchange fee charged by Visa. That fee was capped at that low level by the Durbin Amendment of the Dodd-Frank financial reform legislation in 2010. Stripe's pricing has been 95%+ markup when it comes to debit/check cards since then. Other card types don't have such an enormous fee spread, but unless all your customers are paying with corporate cards and AmEx, 2.9% flat rate is a real nice margin.
- jkestner 11y agoAt the risk of being dense, are you sure you're not talking about debit cards? I've never seen interchange fees lower than about 1% for credit cards. In what I read from the Durbin Amendment, I've only found the specific numbers you mentioned in reference to debit cards. If I'm wrong, I want the name of your merchant processor!
- dangrossman 11y agoI am most definitely talking about debit cards. I said "fee for charging a debit/check card". They make up 25% of my online processing volume despite being a mostly B2B business. They're probably more than 25% of Stripe's volume. Visa interchange fees: http://usa.visa.com/download/merchants/Visa-USA-Interchange-Reimbursement-Fees-2015-April-18.pdf http://usa.visa.com/download/merchants/Visa-USA-Interchange-... A screenshot of a transaction report at my processor: http://i.imgur.com/fSycwUS.png http://i.imgur.com/fSycwUS.png Feel free to e-mail me if you'd like any other clarification or information. It's in my profile.
- jkestner 11y agoWhoops, you did say that, way back in the first post in our thread. Sorry, I've been focused on credit cards — all is clear now. I hadn't thought at all about that wrinkle of Stripe. I suppose it's (only partially) balanced by the higher AMEX, etc fees.
- pbreit 11y agoWhy doesn't someone do Stripe (or Square) with interchange-plus pricing? To little profit? I always hear, but never believed, that businesses supposedly appreciate stable fees. After having several businesses I know I much prefer lower fees.
- hahamrfunnyguy 11y agoWhich service are you using?
- Silhouette 11y agoHow nice that spread is does depend dramatically on the size of the transaction, though. I'm guessing a service like Stripe has plenty of customers in B2C markets, where selling something for $10 is hardly unusual. At that price, they are only making a few cents on the transaction in revenues (not profits). Obviously on a $100 transaction the figures work out much better for them. I think Stripe also still charge the same rate for all card types, but behind the scenes they are probably paying significantly higher rates to some card networks than others.