Kudos for stepping in. But you should really have a process in place where the CEO does not have to look into it based on the issue being posted on Hacker News.
As multiple commenters note, UK and EU interchange is significantly lower than that in the US. So the rewards market tends to be different as a result.
That said, launching this in the UK would still be attractive to us. We don't think rewards are the primary thing businesses are looking for.
As we talked to founders, it seems like they all want a corporate card early on for their business spending (to get it off personal cards). As the business adds employees, they need a sensible way to keep tabs on spending without the expensing process being really painful. I think that's just as relevant in the UK, with the added detail of multi-currency spending being more relevant.
From our point of view, a card where we could use our USD and EUR balance to make USD/EUR payments would be one of the biggest pulls if possible. I think recurring USD charges for UK based businesses are probably quite prevalent.
I don't think many UK startups realise how much they lose out on being charged in GBP on these transactions (especially with debit cards). There's likely an opportunity here to educate UK businesses and use that to promote this sort of card.
> all want a corporate card early on for their business spending (to get it off personal cards)
I'm surprised by this, been a while since we were an early business but didn't have any issue getting a corporate debit card which is more than adequate early on.
> From our point of view, a card where we could use our USD and EUR balance to make USD/EUR payments would be one of the biggest pulls if possible. I think recurring USD charges for UK based businesses are probably quite prevalent.
> I don't think many UK startups realise how much they lose out on being charged in GBP on these transactions (especially with debit cards). There's likely an opportunity here to educate UK businesses and use that to promote this sort of card.
That's what we use Transferwise and their Borderless Account for.
The challenger banks have similar offerings, with multi-currency accounts behind them. We don't have enough in other currencies to need that (yet, it's on my TODO list) . Not being stung for foreign currency transaction fees is why we put all non-GBP expenditure through Transferwise
Which country are you in? We're working on speeding up payout times around the world -- it's something people are (rightly) very sensitive to. If you email me at john@stripe.com I can look into it for you.
That's an abnormally high rate of declines to be seeing. Can you send me an email (john@stripe.com) and I'll look into it?
One change we're making is giving you better insight to which charges Stripe declines on your behalf (because they look fraudulent; you can override this behavior) and which charges are declined by the cardholder bank (you can't override this).
We're trying to outline how the restrictions and limitations that exist can affect different businesses. With the right approvals (and often with substantially increased fees), some of these businesses can certainly operate. And we hope to be able to work with as many as possible in the future.
By our nature, we are on the side of people building things. We have been through many of these kinds of struggles ourselves. (Stripe's first application for a corporate bank account was rejected!) So we wanted to make that clear and describe where we're falling short of our aspirations today.
I think a lot of this is coming down to how you're framing it. Most people, some of the commenters on this thread aside, would think you're being generally reasonable given the current environment of the financial services industry. However you're really just asking to get yelled at when you say things like: "We want to avoid taking editorial or moral stances regarding the businesses built on Stripe."
This statement is absurd, all businesses make these decisions whether they want to or not, and being the errand boy for The Powers That Be does not absolve you of these decisions. The continual framing going down that post is something of "We always do the right thing, except when we can't or we don't want to." Which isn't a great way to win people over.
If you were just explicit from the get go that as a financial services company you have to CYA first, and then try to do the right thing second nobody would blame you for that. Most reasonable people who will be doing actual business with Stripe have dealt with processors/merchants before and know what goes on with these deals, it's all about hedging risk.
But when you phrase it like you're trying to do the right thing and CYA is just an incidental inconvenience pressed on you by some big corp who's really the bad guy here... well, that's just disingenuous and people know it.
Beyond that people are aware that Stripe is growing, and growing fast. Large companies have inconsistencies with this sort of stuff, PayPal is a prime example. And while I've had amazing experiences as a lone developer with my own projects I've also had some not-so-great experiences with Stripe in my professional life (obviously I don't speak for my employer or any prior ones). Again, this makes sense, a lone developer is a lot less risky than someone who's already funneling funny looking money through your system, but trying to whitewash this clear fact as if you were in fact "doing the right thing" the whole time makes people frustrated and reduces people's ability to predict Stripe's actions. And nobody wants to deal with an unpredictable payment provider.
I realize that a decent amount of the article here talks about risk and how it's hedged, but you continually phrase things like the OMGYes case study as if your hands were tied in some non-moralistic decision, which again rings disingenuous. Same with the "Businesses that pose a brand risk" bullet point.
Last but not least, you guys squirreled away the most important piece of information in this article to a small paragraph. "Contact us first if you're at all worried" should be bolded in 60pt font at the very top. Asking people to do that and being very explicit and upfront about your CYA policy before trying to explain the nuances would go very far with how people interpret the message, even if there's nothing explicitly wrong with how it's done now.
> "We want to avoid taking editorial or moral stances regarding the businesses built on Stripe."
This really is true. All companies will have to apply some criteria -- there are businesses that AWS or mail companies reject. In our case, we would like to avoid editorial and moral stances as much as we can. And as the post hopefully makes clear, we still have a ways to go.
> If you were just explicit from the get go that as a financial services company you have to CYA first, and then try to do the right thing second nobody would blame you for that.
We would actually like to be a bit more progressive than that -- rather than supinely CYAing all the time, we want to (and frequently do) take risks and push back on behalf of businesses we believe in. The latter half of the post was intended to lay out some examples of that. But the distinction you're drawing makes sense and I'll look at editing the post with it in mind. Thanks for the feedback.
Separately, I would be very interested to hear about your suboptimal experiences if you'd be willing to share them over email or the phone.
Not quite sure I'd be allowed to talk about that stuff anymore, although depending on the records you guys keep my name will probably pop up in some calls/emails if you searched for it.
And look, I entirely get what you're saying, and I know you guys probably mean it, but again, you're missing the perspective of people who have a distinct impression of the financial services industry and who _know_ what happens when you go down this road with PayPal, Braintree, et. al. They don't necessarily care if you guys are making a best effort on a case by case basis if you're still hampered by contractual obligations to play by someone else's game. And when you try to make these moral stands but almost immediately point out where you were contractually obligated to compromise said stands it doesn't give people confidence in the moral stands and makes it look like grandstanding (holy run on batman). This is where the disconnect and (seeming) disingenuousness arises.
This is also why I emphasized that you guys should really just tell people to contact support first, because that clears all confusion and miscommunication without having to make moral pronouncements and before you guys are put in a position that forces you to compromise these bright lines.
Anyway, I really support what you guys are doing and don't want to seem overly critical but I wanted to communicate a disconnect that seemed to get lost in translation.
Funny thing is, even PayPal allow sex toys and a lot of sex toy sellers accept PayPal. Have done for quite a while if I remember correctly. I guess from their perspective it must not be that high risk
Have you ever worked with the kind of company that supports the merchant accounts for businesses that legitimate processors avoid? They are run by the shadiest people in the tech services industry. They only manage to accept credit cards for scum clients because they themselves are scum willing to do anything to make a dollar. They always operate overseas in countries with dubious legal systems, tucked away from the first world.
Stripe operates in the first world. They're not going to deal with clients that have 10%+ monthly chargeback rates.
It sounds like you would've preferred that they don't post anything at all. Even if the post was edited to how you're describing, people would say, "Well they should be more progressive than that!"
Personally, I think it was great that they articulated why they do what they have to do, and the measures they're taking to improve.
Although I agree with the statement about:
> "We want to avoid taking editorial or moral stances regarding the businesses built on Stripe."
The entire post, and John, basically indicated that they do want to take a more progressive moral stance. Their stance being that they want to fight for servicing certain businesses on Stripe.
> The entire post, and John, basically indicated that they do want to take a more progressive moral stance. Their stance being that they want to fight for servicing certain businesses on Stripe.
Yes, we're going to remove the first sentence from the post -- you're right that it's, strictly speaking, inaccurate in the sense that we do want to take a stance in favor of certain kinds of businesses.
Sorry, but this is flat out wrong. I had a protracted exchange with your support and unfortunately I could not get past your first level support who and I do mean this harshly, sounded like they didn't pass first year business school.
I tried to speak to a manager who actually had a clue with business and was denied. In fact, I was pushed from pillar to post and spoke with 6 different people from the first tier support team.
It was at this point, I thought stripe was some fly by night operation, not garnering the level of praise that technical people here on hackernews were giving. Definitely not.
I think in future, should someone present you with a case that falls outside your remit. But is willing to do whatever it takes to work with you. You give them the benefit of the doubt and at least try to help them. In my case, you did not and that's not really great. In fact, you turned me into an enemy who went out to his community and turned a lot of people off you and onto your competitors.
I understand the sentence. What I don't understand is why it is necessary for a support agent to have completed first year business school and why this is an insult (which I take as the intent).
My guess is that they were talking to some kind of business support (as opposed to technical support), and it's a way of saying "they didn't know what they were talking about", when the reality was probably "I want to do something that their company doesn't want to support, and I'm upset that they didn't buy my argument".
They mentioned being a "case that falls outside [Stripe's] remit", and that Stripe didn't "give them the benefit of the doubt".
I'm sorry to hear that. I'm guessing it's now too late, but if not I'd be happy to take a look at your case and escalate it. My email is john@stripe.com.
its really nice when people like you offer to do this, its a really great sign of good faith. But, reality is that a lot of people don't want to have to rely on special treatment to get something done. The fact is that the lowest level gatekeeper in your customer service organization is the biggest factor in how good a company's customer service is perceived to be. If I have a shit experience with the first person I contact in customer service, fight to speak to a manager, and then successfully resolve my issue, I'm still pissed and have a bad taste in my mouth. Its the exact same reason everyone hates "contact sales for pricing" statements on product/pricing pages. Its a bunch or red-tape that does nothing but take up too much of someone's time to figure out if they can successfully use a service or not. As awesome as it is when people like you offer to do this, it means your customer service group has critically failed just based on the fact that this has happened.
Rants aside, Stripe has the best technical/developer support of any company I have every worked with. The constant presence of real technical resources in public IRC channels is phenomenal. I've been able to fire up irc, ask a question, and get an answer in under 5 minutes many times. Well done. I have not worked with support on production issues with charges though; I can't speak to that.
For sure. While I'm interested in fixing the specific case, I'm more interested in discovering the underlying systematic error and fixing the support experience in the cases I don't see.
And thanks for the nice words about IRC! The folks in #stripe on freenode are always happy to chat.
> "So we wanted to make that clear and describe where we're falling short of our aspirations today."
Just a PR tip - it's probably best to solve those issues first, then publish a post about how you solved it. Apologizing for not solving the problem doesn't seem worth it unless you've made promise to fix it and then failed. In which case, a "Post Mortem" is perfectly defensible, IMHO
We're never going to definitively solve them; it'll always be a process. But we did try to lay out some examples in the post of cases where we've been able to make progress.
First, let me explain why drop-shipping is a popular vector for fraud. Drop-shipping means selling a product which you don't make or hold in stock; instead, when a purchase comes in you go and buy it somewhere else and have it shipped directly to the buyer. You can think of it as a form of arbitrage. They're remarkably efficient businesses: they need to have no assets or physical presence. The flip side of that is that if you were looking to create a legitimate-looking shell business to, say, cash in on stolen credit cards then drop-shipping would be a very plausible cover story. It's hard for us to disprove.
Since Stripe is on the hook if customers don't get their goods or services, we need to be able to ensure that the businesses are legitimate. It's hard for us to reliably do so with drop-shippers. While dropshipping is not Shopify's primary business, they are more specialized in ecommerce, they have more business-specific data, and there are a handful of other properties which let them support these businesses more readily.
The simple obvious first guess is, "Shopify makes a much larger margin, so there is more money available to pay for fraud detection"
Or maybe Shopify knows more about their clients or something like that. Regardless, the margins in Stripe's business are pretty thin, so they can't afford to either eat a lot of losses due to fraud or spend a lot of money on detection. It's totally possible that clients who drop-ship things are not profitable on average for Stripe, even if the vast majority of people drop-shipping things are totally legitimate.
> I know many who drop ship and are not money launders.
No one said that all drop shippers, or even the majority of drop shippers, are doing anything illegitimate.
Those who provide merchant accounts for credit card processing are the ones who assume the risk if one of their account holders is not able to cover chargebacks, and so from their point of view it doesn't matter that the vast majority of drop shippers are legitimate. What matters from their angle is how much they will be on the hook for because of the small fraction that are illegitimate. If that is too high, it can be better for them to just disallow the whole category.
> No one said that all drop shippers, or even the majority of drop shippers, are doing anything illegitimate.
Yes, but STRIPE are saying this. Because it's in their prohibitive items list and if you do it as part of your business, they will not do business with you. This is my whole point.
Other merchants will happily do business, so why not stripe? They have yet explained why...
The guy you are replying to is a co-founder of stripe. You are being downvoted for disagreeing with him. On Hacker News there are certain personalities that you must not debate.
I don't get the connection between drop shipping and money laundering either (As if money laundering was a crime as defined at the federal level- everyone is already guilty).
Nobody would use a credit card to launder money since it is tied to a bank, or in the case of a visa gift card, limited to such small denominations its impractical for money laundering.
That's neither true nor fair; downvotes are explained by the commenter clearly wanting to escalate the argument. collision said tends to, so the objection here is weak and certainly doesn't merit name-calling like "Laughable".
A better way to phrase something like this is as a question. For example: "Wouldn't these criteria apply to Shopify? If Shopify is a legitimate business, how can other legitimate businesses overcome the same hurdle?" Putting it that way would abide by the HN guidelines, would be more likely to get a substantive response, and would take the thread in a direction where we all learn something.
It's hard, of course, to keep one's poise in a discussion about one's business being rejected for an arguable reason, but the alternative is for people to yell at each other, which helps no one and degrades this site.
This is complementary functionality: you can choose whether you want to incorporate locally or using Atlas. We'll stay supporting CA-USD and will be expanding local-country support. We recently launched private beta support for businesses in new countries like Brazil, Mexico, and Singapore, in fact: https://stripe.com/global
We're getting rid of the $0.25 transfer fee and replacing it with 0.5% of funds paid out to managed accounts. We do more work (and incur more cost) if you're using managed accounts, so we think it makes sense.
> Seems like it would require the same amount of work to pay out $10,000 vs. $100,000.
We want our pricing to align with the best product experience, and a flat fee would encourage marketplaces to pay out less frequently. This pricing makes it easy to do daily transfers. In addition, there are actually reporting obligations and such that kick in at higher volumes, so it's not completely scale-independent.
No; we'll grandfather both Stripe Transfers API (the old system) users and Balanced users. That said, this works out to be cheaper for most people -- most users aren't doing $100k payouts.
> If you require marketplaces to use managed accounts then it's an extra tax, no?
We don't require that they use managed accounts. Over time, I think standalone accounts will become the better option, since it's much less work for the marketplace.
Thanks for the response, Patrick. We run a platform with a large average transaction value, large enough that 0.5% is very meaningful. We would love to take over the onboarding process and entire user experience, but 0.5% is too much to swallow. Braintree provides us with the same functionality and a flat $0.25 payout fee, which is a better alignment of incentives for us.
If we were to use Stripe managed accounts we would start bearing all transaction risk plus a 0.5% fee. As a result our payout frequency would decrease drastically as we'd implement a huge delay, only paying out once we were positive the transaction was risk free.
Is Stripe's preference for platforms to continue to use standalone accounts vs managed account long term? We have a strong affinity to Stripe as a fellow YC company, but struggle with this offering.
Specific to your case, if your transaction volume is very high you should contact us. We're certainly open to volume pricing depending on your specific situation, and would love to learn about how to best serve/price your specific use case. sales@stripe.com is the best contact there. bkrausz@stripe.com also works :).
More generally, international KYC and compliant payments are quite hard, and our pricing there is very competitive. Domestically we saw that many companies were already paying similar rates on our fixed-fee pricing, so we weren't actually hurting customers in the US (on the contrary, we were encouraging more frequent payouts for the same rate, which would help everyone by making a more efficient system). We felt that the benefits of consistent pricing were worth it here.
Re standalone vs. managed accounts: our preference is that we make standalone accounts such a great and easy-to-use experience that everybody starts using them, because dealing with things like information collection and tax reporting is annoying. However, we're letting our customers dictate that. If managed accounts become immensely popular, it means we haven't made standalone accounts easy enough to use, or we've made an incorrect assumption about the world (likely a combination of both). Regardless, we intend to support managed accounts for a very long time, and have already had them around in some less-built-out form for quite a while.
> We want our pricing to align with the best product experience, and a flat fee would encourage marketplaces to pay out less frequently.
I don't understand how increasing pricing from a flat fee to a percentage encourages marketplaces to pay out less frequently. The cost is so nominal that it far outweighs any percentage fee.
> We don't require that they use managed accounts. Over time, I think standalone accounts will become the better option
Better for whom? [edit] My customers are not tech savvy and only want to deal with one fintech vendor, exposing Stripe to my customers seems like it's Stripe's best interest.
> I don't understand how increasing pricing from a flat fee to a percentage encourages marketplaces to pay out less frequently. The cost is so nominal that it far outweighs any percentage fee.
Our goal, as Patrick said, is to allow people to pay out more frequently. A flat fee ties your costs to number of transfers, which seems unnecessary in a lot of cases. If a seller just earned $10, they should get their $10 (at a cost of a nickel).
> Better for whom?
For customers and platforms. If we do our job right, standalone accounts should be so easy to use and user-friendly, even for non-tech-savvy customers, that it's clearly the better option for everyone.
That being said, it's not like we'll kill off managed accounts: there'll always be a good reason to have a fully customized experience. Making standalone accounts good enough to be the better option more often is a goal we strive for, but that's for our customers to decide.
What I was imagining is stripe issuing a credit card that my system can use to perform credit card payments on any generic webshop (either manually or some web scraper) and have that linked to a payment into my stripe account by a specific customer. I am not aware of anyone offering this service.
