Comment by abalone
2 years ago
> and this is considered competitive
Stripe is hella expensive! But they are easy to get started with.
Competitive rates depend on the type of business, i.e. their volume and their fraud risk. The most transparent form of pricing is called “interchange plus” where it’s a flat markup on the interchange schedule. High volume merchants should be able to find a markup in the fractions of a percent.
It is my understanding that the big Stripe customers negotiate lower rates with them as they scale.
> High volume merchants should be able to find a markup in the fractions of a percent.
And this is why small businesses are more likely to offer cash discounts than larger ones.
5 years ago HSBC were charging us, a micro-business (2 employees, not software) about the same for cash handling as we paid for debit card processing.
If small businesses give discounts for cash it's because they're committing tax fraud, I presume.
Cash handling is typically in the neighborhood of 0.2%-0.3%, so you were apparently overpaying:
https://www.nerdwallet.com/article/banking/business-checking...
And that's assuming you're depositing all of your revenue. If your business allows you to pay some of your suppliers in cash, you could have >50% of your revenue in cash and never pay a bank for cash handling because you're immediately spending it on business expenses rather than depositing it.
> If small businesses give discounts for cash it's because they're committing tax fraud, I presume.
I have seen governments charge a convenience fee for credit card processing. Is the government committing tax fraud?
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