For a more detailed cost comparison with PayPal:
Stripe's pricing starts at 2.4% + \u00a30.20 per transaction + VAT. Stripe charges 2% for foreign conversions (i.e. charging in EUR, when you want to be paid out in GBP).
PayPal's pricing starts at 3.4% + \u00a30.20 per transaction. In addition to their published rate, you'll also pay:
* \u00a320 per month if you want to design and host your own checkout pages.
* If you process in other currencies other than your local currency, PayPal will charge you a fee of 2.5% above the wholesale exchange rate (https://www.paypal.com/uk/webapps/mpp/cross-border-and-conve...).
* If you receive payments from customers outside of the UK, PayPal will charge you a fee of anywhere from 0.4% to 1.5% (https://www.paypal.com/uk/webapps/mpp/cross-border-and-conve...).
* If your customers pay with American Express, PayPal will charge you a fee of 3.5%.
* If you issue a refund, you will pay a fixed fee portion of the original transaction fee."},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["stripe"],"value":"Introducing Stripe UK"},"story_url":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["stripe"],"value":"https://stripe.com/blog/introducing-stripe-uk"}},"_tags":["comment","author_cristinacordova","story_6217536"],"author":"cristinacordova","children":[6223158],"comment_text":"(I work at Stripe)
For a more detailed cost comparison with PayPal:
Stripe's pricing starts at 2.4% + \u00a30.20 per transaction + VAT. Stripe charges 2% for foreign conversions (i.e. charging in EUR, when you want to be paid out in GBP).
PayPal's pricing starts at 3.4% + \u00a30.20 per transaction. In addition to their published rate, you'll also pay:
* \u00a320 per month if you want to design and host your own checkout pages.
* If you process in other currencies other than your local currency, PayPal will charge you a fee of 2.5% above the wholesale exchange rate (https://www.paypal.com/uk/webapps/mpp/cross-border-and-conve...).
* If you receive payments from customers outside of the UK, PayPal will charge you a fee of anywhere from 0.4% to 1.5% (https://www.paypal.com/uk/webapps/mpp/cross-border-and-conve...).
* If your customers pay with American Express, PayPal will charge you a fee of 3.5%.
* If you issue a refund, you will pay a fixed fee portion of the original transaction fee.","created_at":"2013-08-15T16:32:20Z","created_at_i":1376584340,"objectID":"6218949","parent_id":6217586,"story_id":6217536,"story_title":"Introducing Stripe UK","story_url":"https://stripe.com/blog/introducing-stripe-uk","updated_at":"2024-09-19T19:49:17Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"Silhouette"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["local","currency","pricing","conversion","rate","stripe"],"value":"I believe the currency conversion charge can be avoided by only charging your customers in your own currency or another currency you have a bank account for.
It can, but then your customers get hit with varying exchange rates and potentially high conversion fees on their side. This will not make you popular with your international customers, at least the ones who didn't already back out when they saw a foreign currency anyway. Depending on which research you read, the rate of lost conversions due to lack of local pricing could be as high as 50%.
Within the overall landscape of payment processing options, Stripe looks trapped in an awkward middle ground now.
Above them are the merchants of record. Including currency conversion, international sales using Paddle seem to cost 7% + 35p at current USD/GBP exchange rate and their standard published pricing. But for that, you get real tax compliance.
Then we have Stripe, coming in at 5.9% + 20p (4.4% + 20p for European cards). Even with Stripe Tax, you're missing much of the essential functionality for global tax compliance and the reassuring liability shift, so that extra 1.1% + 15p or even 2.6% + 15p would be the easiest sale since bottled water in a desert to a lot of merchants.
Further down the price spectrum, we have services like GoCardless that are offering direct payment schemes rather than cards (duh) but for a fee of only 2% + 20p including currency conversion. You don't get any built-in tax support here, so it would be fairest to compare with Stripe at 5.4% + 20p or possibly 3.9% + 20p, but that's still quite a difference. And while you have to do your own tax compliance as with all payment processors using this model, you do get other benefits, notably in much improved reliability of collecting payments via direct payment schemes compared to card payments.
I wonder whether Stripe's medium-term goal might be to establish its own merchant of record service, and Stripe Tax in its current form is just the opening move. Otherwise, it doesn't really make sense to me as a strategy. But I have no inside knowledge on this and there are several Stripe people around who probably do, so no doubt if they want to elaborate at this time they will."},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["stripe"],"value":"Stripe Tax"},"story_url":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["stripe"],"value":"https://stripe.com/tax"}},"_tags":["comment","author_Silhouette","story_27459712"],"author":"Silhouette","children":[27466910],"comment_text":"I believe the currency conversion charge can be avoided by only charging your customers in your own currency or another currency you have a bank account for.
It can, but then your customers get hit with varying exchange rates and potentially high conversion fees on their side. This will not make you popular with your international customers, at least the ones who didn't already back out when they saw a foreign currency anyway. Depending on which research you read, the rate of lost conversions due to lack of local pricing could be as high as 50%.
Within the overall landscape of payment processing options, Stripe looks trapped in an awkward middle ground now.
Above them are the merchants of record. Including currency conversion, international sales using Paddle seem to cost 7% + 35p at current USD/GBP exchange rate and their standard published pricing. But for that, you get real tax compliance.
Then we have Stripe, coming in at 5.9% + 20p (4.4% + 20p for European cards). Even with Stripe Tax, you're missing much of the essential functionality for global tax compliance and the reassuring liability shift, so that extra 1.1% + 15p or even 2.6% + 15p would be the easiest sale since bottled water in a desert to a lot of merchants.
Further down the price spectrum, we have services like GoCardless that are offering direct payment schemes rather than cards (duh) but for a fee of only 2% + 20p including currency conversion. You don't get any built-in tax support here, so it would be fairest to compare with Stripe at 5.4% + 20p or possibly 3.9% + 20p, but that's still quite a difference. And while you have to do your own tax compliance as with all payment processors using this model, you do get other benefits, notably in much improved reliability of collecting payments via direct payment schemes compared to card payments.
I wonder whether Stripe's medium-term goal might be to establish its own merchant of record service, and Stripe Tax in its current form is just the opening move. Otherwise, it doesn't really make sense to me as a strategy. But I have no inside knowledge on this and there are several Stripe people around who probably do, so no doubt if they want to elaborate at this time they will.","created_at":"2021-06-10T22:12:04Z","created_at_i":1623363124,"objectID":"27466484","parent_id":27466220,"story_id":27459712,"story_title":"Stripe Tax","story_url":"https://stripe.com/tax","updated_at":"2024-09-20T08:46:20Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"Silhouette"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["local","currency","pricing","conversion","rate","stripe"],"value":"Here's some current Stripe UK pricing, confirmed on their site today.
Baseline of 2.9% + \u00a30.20 for international card payments. (It's reduced to 1.4% + 20p for European cards.)
Add 2% for currency conversion. The exchange rate used is stated as "the daily mid-market rate provided by our service providers".
Add 0.5% for Billing if you're using subscriptions.
Add 0.5% more if you're using this new Stripe Tax functionality.
That is significantly over 5% for a typical SaaS or merchant selling digital content online, making international sales in multiple currencies.
Given that merchant of record services like Paddle are providing functionality far more comprehensive than Stripe Tax appears to be, they're still going to be attractive for smaller merchants compared to the more traditional PSPs like Stripe.
It's probably worth pointing out that while the EU has a long track record of making VAT difficult for everyone, plenty of other countries around the world and even some smaller regions seem to be jumping on the bandwagon lately. If all of these governments start attempting to enforce their local laws extra-territorially (leaving aside any questions about the legality and/or morality of doing so for this discussion) without also introducing reasonable de minimis thresholds to avoid grossly disproportionate compliance costs for negligible extra tax revenues in low volume situations, the situation could get very messy.
If that does happen and businesses are forced to comply with all rules globally regardless of actual sales volumes, I don't see how the model uses by traditional PSPs like Stripe has any chance of surviving. Every small business will have to sell via intermediaries like Paddle to shift the tax responsibilities to a larger business with the resources to deal with it, and pay whatever premium the market decides that justifies on all affected international sales."},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["stripe"],"value":"Stripe Tax"},"story_url":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["stripe"],"value":"https://stripe.com/tax"}},"_tags":["comment","author_Silhouette","story_27459712"],"author":"Silhouette","children":[27461882,27464776,27466220],"comment_text":"Here's some current Stripe UK pricing, confirmed on their site today.
Baseline of 2.9% + \u00a30.20 for international card payments. (It's reduced to 1.4% + 20p for European cards.)
Add 2% for currency conversion. The exchange rate used is stated as "the daily mid-market rate provided by our service providers".
Add 0.5% for Billing if you're using subscriptions.
Add 0.5% more if you're using this new Stripe Tax functionality.
That is significantly over 5% for a typical SaaS or merchant selling digital content online, making international sales in multiple currencies.
Given that merchant of record services like Paddle are providing functionality far more comprehensive than Stripe Tax appears to be, they're still going to be attractive for smaller merchants compared to the more traditional PSPs like Stripe.
It's probably worth pointing out that while the EU has a long track record of making VAT difficult for everyone, plenty of other countries around the world and even some smaller regions seem to be jumping on the bandwagon lately. If all of these governments start attempting to enforce their local laws extra-territorially (leaving aside any questions about the legality and/or morality of doing so for this discussion) without also introducing reasonable de minimis thresholds to avoid grossly disproportionate compliance costs for negligible extra tax revenues in low volume situations, the situation could get very messy.
If that does happen and businesses are forced to comply with all rules globally regardless of actual sales volumes, I don't see how the model uses by traditional PSPs like Stripe has any chance of surviving. Every small business will have to sell via intermediaries like Paddle to shift the tax responsibilities to a larger business with the resources to deal with it, and pay whatever premium the market decides that justifies on all affected international sales.","created_at":"2021-06-10T14:08:39Z","created_at_i":1623334119,"objectID":"27460955","parent_id":27459924,"story_id":27459712,"story_title":"Stripe Tax","story_url":"https://stripe.com/tax","updated_at":"2024-09-20T08:45:42Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"sirn"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["local","currency","pricing","conversion","rate","stripe"],"value":"I used to work in payment industry (I kinda still do, but no longer involved in the talking with Visa/Mastercard part), and I can see why they could be doing this if they do. I know this is an unpopular opinion, but I _personally_ do not think 30% is outrageous as many people believe so although I also do hold an opinion that App Store should allows the app to use their own payment infrastructure if they have one (currently only possible for physical goods).
Stripe and other modern payment gateway makes pricing simple, but it's far from simple behind the scene. Most people on HN are probably using credit card for App Store, so it's easy to overlook that App Store offers different kinds of APMs: carrier payment[1], local wallet, stored value card, and local payment services[2]. I don't think Stripe supports half or even third of what App Store supports.
I've worked on local integration for few countries for different kind of payment methods. In some payment method they simply don't refund your fee. In some cases where currency conversion happens it's not possible to refund using the exact rate the charge was made. In some cases the fee is prohibitively high (e.g. 12% for carrier payment). In many cases there are contract fees, connection fee, infrastructure ("nah you have to have your own server cage and a direct fiber line from us") fee and many more. This, plus CDN, maintenance and everything, is one of the reasons why I don't think 30% is outrageous and will probably found it acceptable if they don't refund this fee, taking operational costs involved into account.
[1]: https://support.apple.com/en-us/HT205102
[2]: https://support.apple.com/en-us/HT202631"},"story_title":{"matchLevel":"none","matchedWords":[],"value":"Apple does not keep the 30% commission on a refund"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"https://twitter.com/twolivesleft/status/1288625617873694721"}},"_tags":["comment","author_sirn","story_23995750"],"author":"sirn","comment_text":"I used to work in payment industry (I kinda still do, but no longer involved in the talking with Visa/Mastercard part), and I can see why they could be doing this if they do. I know this is an unpopular opinion, but I _personally_ do not think 30% is outrageous as many people believe so although I also do hold an opinion that App Store should allows the app to use their own payment infrastructure if they have one (currently only possible for physical goods).
Stripe and other modern payment gateway makes pricing simple, but it's far from simple behind the scene. Most people on HN are probably using credit card for App Store, so it's easy to overlook that App Store offers different kinds of APMs: carrier payment[1], local wallet, stored value card, and local payment services[2]. I don't think Stripe supports half or even third of what App Store supports.
I've worked on local integration for few countries for different kind of payment methods. In some payment method they simply don't refund your fee. In some cases where currency conversion happens it's not possible to refund using the exact rate the charge was made. In some cases the fee is prohibitively high (e.g. 12% for carrier payment). In many cases there are contract fees, connection fee, infrastructure ("nah you have to have your own server cage and a direct fiber line from us") fee and many more. This, plus CDN, maintenance and everything, is one of the reasons why I don't think 30% is outrageous and will probably found it acceptable if they don't refund this fee, taking operational costs involved into account.
[1]: https://support.apple.com/en-us/HT205102
[2]: https://support.apple.com/en-us/HT202631","created_at":"2020-07-30T12:22:29Z","created_at_i":1596111749,"objectID":"23997246","parent_id":23996348,"story_id":23995750,"story_title":"Apple does not keep the 30% commission on a refund","story_url":"https://twitter.com/twolivesleft/status/1288625617873694721","updated_at":"2024-09-20T06:41:27Z"}],"hitsPerPage":20,"nbHits":4,"nbPages":1,"page":0,"params":"query=local+currency+pricing+conversion+rate+stripe&advancedSyntax=true&analyticsTags=backend","processingTimeMS":35,"processingTimingsMS":{"_request":{"roundTrip":16},"afterFetch":{"merge":{"mergeLoop":{"prepareNextHit":2,"total":2},"total":4},"total":4},"fetch":{"query":27,"scanning":2,"total":30},"total":35},"query":"local currency pricing conversion rate stripe","serverTimeMS":36}