Stripe to move to South San Francisco

Re:Stripe to move to South San Francisco by lukeschlather on Thursday October 24, 2019 @01:44AM (#21341950)

I have a credit card that gives me 1.5% cash back on every transaction. I'm reading that Visa typically charges 2.3% to merchants, and Stripe charges 2.9%, ignoring per-transaction fees. So Stripe itself probably gets around 0.6% of each transaction, and at least on average 1% of each transaction goes to cardholder bonuses, and the card issuer gets around 1.3%. Of course both Stripe and the issuer have some fraud prevention built-in, I don't know how much that amounts to (and how much more effective China is at combating fraud, though it's possible WeChat simply doesn't accept as much liability as American payment processors do.)

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Re:Stripe to move to South San Francisco by AdieuToLogic on Thursday October 24, 2019 @02:52AM (#21342289)

Your conflating fees charged to Merchants (by processors) and rewards offered to Card Holders (by issuers).

While often the same bank performs, or is a partial owner involved in, both processing and issuing, the percentages you quote are largely disjoint.

> I'm reading that Visa typically charges 2.3% to merchants ...

The Discount Rate[0] a Merchant pays varies significantly based on the line-of-business, charge-backs, processing contract, and a bunch of other things.

> ... at least on average 1% of each transaction goes to cardholder bonuses ...

Again, issuer costs have no bearing on Merchant fees nor the profitability of processors.

0 - https://www.creditcards.com/credit-card-news/glossary/term-d...

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Re:Stripe to move to South San Francisco by nitrogen on Thursday October 24, 2019 @04:23AM (#21342653)

Again, issuer costs have no bearing on Merchant fees nor the profitability of processors.

If this is true, then where does the cash back come from if not as a cut of the merchant fees?

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Re:Stripe to move to South San Francisco by AdieuToLogic on Thursday October 24, 2019 @11:03AM (#21345347)

> > Again, issuer costs have no bearing on Merchant fees nor the profitability of processors.

> If this is true, then where does the cash back come from if not as a cut of the merchant fees?

Interest rates + membership fees charged by issuers to Card Holders.

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Re:Stripe to move to South San Francisco by rstupek on Thursday October 24, 2019 @01:01PM (#21346581)

I don't think that is correct. Merchants are charged different rates based on the cash back rates of a given card. Merchants have to eat most of that cash back being given to the card holders.

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Re:Stripe to move to South San Francisco by ceejayoz on Thursday October 24, 2019 @08:26AM (#21343932)

Interchange fees are higher on premium (rewards) cards. The merchant may contractually pay a fixed percentage that accounts for the expected mix of cards, but those rewards absolutely come from merchant fees.

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Re:Stripe to move to South San Francisco by rwmurrayVT on Thursday October 24, 2019 @10:35AM (#21345053)

There are entire organized crime rings and many, many individuals that specialize in merchant account fraud. In the early 2010's people were creating stripe accounts and processing up to $100,000 fraudulently. I'm not sure who ate that, but it surely had an impact on their bottom line. I had screenshots from Alphabay of over $5,000,000 in fraudulent charges on merchant accounts. If Stripe only makes 1% of transaction cost and has to eat the fraud then they'd have to charge $500,000,000 to just make up what was posted in a single "mastermind group". That is crazy...

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Re:Stripe to move to South San Francisco by aeternum on Thursday October 24, 2019 @02:18AM (#21342118)

Card not present transactions (the type primarily used by Stripe) are charged at a significantly higher rate due to the higher likelihood of fraud.

To use square as an example, card present is 2.6% whereas card not present is 3.5%.

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Re:Stripe to move to South San Francisco by dehrmann on Thursday October 24, 2019 @11:43AM (#21345756)

> I have a credit card that gives me 1.5% cash back on every transaction

Some of this is paid for by people carrying balances. The bet is that cash back will attract enough people to get and use the card that, in aggregate, interest will make up for cash back.

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Re:Stripe to move to South San Francisco by MuffinFlavored on Thursday October 24, 2019 @11:26AM (#21345585)

From a quick Google, I think the difference is that WeChat is bank-to-bank, therefore the rates are 0.1%

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