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I do always appreciate your willingness to comment here on stories about Stripe, so first of all thanks for taking the time to reply. I know so many people who

by objclxt 11y ago

I do always appreciate your willingness to comment here on stories about Stripe, so first of all thanks for taking the time to reply. I know so many people who have great experiences using Stripe and love the services you provide - I've evangelized them myself on occasion. But it is good, I think, to be a little skeptical about vertical integration - which isn't a bad thing per se, but you do have to wonder whether investments by the established card networks will have any impact on Stripe's ability to disrupt the space and work to benefit the merchant, rather than the bank (or both!). It's really good it sounds like that's not the case. > The extra interchange in the US doesn't go to Visa but instead to the banks that issue the cards Whilst this is true, it's also true that until 2008 Visa was owned by the issuing banks, and since Visa IPO'd the banks have maintained significant investments. So I don't think it's quite as clear cut as "the banks vs the networks". They have a somewhat symbiotic relationship. I think it's pretty clear that there's no appetite in the US on either the banks or the networks to reduce interchange unless forced to by regulation. And I think that's going to happen one day just as it did for debit cards, and it will be really interesting to see how the payment processors react to that - whether they lobby against it, or for it.

pc 11y ago
Yeah, I agree that you need to be careful navigating these kinds of relationships. That said, I think part of the reason we've been able to do deals like this is because we're so clear that we're on the side of the businesses using Stripe. If we were pushing an ulterior agenda (our own wallet, a particular payment instrument, etc.), we'd close off other avenues. You can only work with Alipay and Visa and Apple by being neutral. (And, yeah, the bank/Visa symbiosis is indeed... nuanced.) Thanks for the kind words about Stripe!
- codegeek 11y ago
  hey pc, one of your many happy customers. when will you give us the new stripe dashboard that you promised a while ago here on HN ? Stripe dashboard UI needs a big change and needs it asap.
  - pc 11y ago
    Already in the hands of outside users! Email me and I'll add you to the list for beta access -- patrick@stripe.com.
    - codegeek 11y ago
      Great. Emailed.
sksk 11y ago
I don't use stripe nor a Visa fanboy but I know this industry very well -- I spent awful lot of time there. > Whilst this is true, it's also true that until 2008 Visa was owned by the issuing banks, and since Visa IPO'd the banks have maintained significant investments. So I don't think it's quite as clear cut as "the banks vs the networks". They have a somewhat symbiotic relationship This is not really the issue. Yes, Visa was owned by banks (so was MasterCard) but they have always taken between 5 and 10 basis points of each transaction (it is not like the fees came down after becoming public). The interchange is high in the US because they ABA and other groups lobby aggressively to keep them that way. Also, given the prevalence of credit cards in the US, the networks have been able to negotiate aggressively with the merchants. When Visa introduced their Signature card product, they increased the fees arguing their product does not have a 'fixed limit' so consumers will spend more which will help the merchant so they should pay more in fees. Amex makes the argument even more so and that's why their interchange tends to be in 3-7% range -- most merchants are not smart enough to do the math and say their customer segment is not really the 'typical' Amex segment and if they don't accept Amex, the customer would have just used a Visa / MC instead. So these rates prevail. If you ask me why rates are different across geographies it really comes down to the will power of the govt. to set the terms. Most emerging economies see Visa / MC as a threat as their entire country will become dependent on a foreign entity to process payments. They generally tend to set pro-consumer regulations (but largely to annoy Visa / MC/ et al.). To my knowledge only in the US (maybe Canada) where it is illegal for a merchant to discriminate against a credit card user. After a lengthy lawsuit, the networks and the merchants settled that the merchants can give a 'discount' on cash transactions but cannot put a surcharge on card transactions. The math is the same but the psychology very different. I wish the rates are fixed amount per swipe and not a % of the transaction amount. Why should it be? If the networks operated seamlessly and allowed new entrants, it would have been like today's cloud computing pricing (almost a commodity) but alas we get only IBM style pricing. I hate credit card companies from the bottom of my heart but until there is another payment vehicle that is just as convenient it will be stupid of any entity not to partner with such providers.
- needusername 11y ago
  > If you ask me why rates are different across geographies it really comes down to the will power of the govt. to set the terms. Absolutely agree. The EU determined that interchange is illegal and now caps it at 0.2% for debit and 0.3% for credit (yes interchange, not scheme fee). After a transition period of course. And surcharging now becomes illegal again as the fees are that low. http://europa.eu/rapid/press-release_IP-15-4585_en.htm http://europa.eu/rapid/press-release_IP-15-4585_en.htm > I hate credit card companies from the bottom of my heart but until there is another payment vehicle that is just as convenient it will be stupid of any entity not to partner with such providers. Banks will never get their shit together and the lack of a global clearing standard will mean we'll forever have to rely on payment schemes.

by objclxt 11y ago

pc 11y ago

Yeah, I agree that you need to be careful navigating these kinds of relationships. That said, I think part of the reason we've been able to do deals like this is because we're so clear that we're on the side of the businesses using Stripe. If we were pushing an ulterior agenda (our own wallet, a particular payment instrument, etc.), we'd close off other avenues. You can only work with Alipay and Visa and Apple by being neutral. (And, yeah, the bank/Visa symbiosis is indeed... nuanced.) Thanks for the kind words about Stripe!

codegeek 11y ago
hey pc, one of your many happy customers. when will you give us the new stripe dashboard that you promised a while ago here on HN ? Stripe dashboard UI needs a big change and needs it asap.
- pc 11y ago
  Already in the hands of outside users! Email me and I'll add you to the list for beta access -- patrick@stripe.com.
  - codegeek 11y ago
    Great. Emailed.

sksk 11y ago

I don't use stripe nor a Visa fanboy but I know this industry very well -- I spent awful lot of time there. > Whilst this is true, it's also true that until 2008 Visa was owned by the issuing banks, and since Visa IPO'd the banks have maintained significant investments. So I don't think it's quite as clear cut as "the banks vs the networks". They have a somewhat symbiotic relationship This is not really the issue. Yes, Visa was owned by banks (so was MasterCard) but they have always taken between 5 and 10 basis points of each transaction (it is not like the fees came down after becoming public). The interchange is high in the US because they ABA and other groups lobby aggressively to keep them that way. Also, given the prevalence of credit cards in the US, the networks have been able to negotiate aggressively with the merchants. When Visa introduced their Signature card product, they increased the fees arguing their product does not have a 'fixed limit' so consumers will spend more which will help the merchant so they should pay more in fees. Amex makes the argument even more so and that's why their interchange tends to be in 3-7% range -- most merchants are not smart enough to do the math and say their customer segment is not really the 'typical' Amex segment and if they don't accept Amex, the customer would have just used a Visa / MC instead. So these rates prevail. If you ask me why rates are different across geographies it really comes down to the will power of the govt. to set the terms. Most emerging economies see Visa / MC as a threat as their entire country will become dependent on a foreign entity to process payments. They generally tend to set pro-consumer regulations (but largely to annoy Visa / MC/ et al.). To my knowledge only in the US (maybe Canada) where it is illegal for a merchant to discriminate against a credit card user. After a lengthy lawsuit, the networks and the merchants settled that the merchants can give a 'discount' on cash transactions but cannot put a surcharge on card transactions. The math is the same but the psychology very different. I wish the rates are fixed amount per swipe and not a % of the transaction amount. Why should it be? If the networks operated seamlessly and allowed new entrants, it would have been like today's cloud computing pricing (almost a commodity) but alas we get only IBM style pricing. I hate credit card companies from the bottom of my heart but until there is another payment vehicle that is just as convenient it will be stupid of any entity not to partner with such providers.

needusername 11y ago
> If you ask me why rates are different across geographies it really comes down to the will power of the govt. to set the terms. Absolutely agree. The EU determined that interchange is illegal and now caps it at 0.2% for debit and 0.3% for credit (yes interchange, not scheme fee). After a transition period of course. And surcharging now becomes illegal again as the fees are that low. http://europa.eu/rapid/press-release_IP-15-4585_en.htm http://europa.eu/rapid/press-release_IP-15-4585_en.htm > I hate credit card companies from the bottom of my heart but until there is another payment vehicle that is just as convenient it will be stupid of any entity not to partner with such providers. Banks will never get their shit together and the lack of a global clearing standard will mean we'll forever have to rely on payment schemes.