Comment by tiffanyh
5 hours ago
Let's use Stripe as an example, there fee is 2.9% + 30 cents.
That 30 cents - is what's often ignored but makes up a disproportionate amount of the fee.
On a $30 transaction, paying 30 cents is equivalent to a 1% fee.
So Stripe on a $30 transaction is effectively 3.9% in fees (on a $30 transaction).
Interchange (which goes to the issuer), would only be approx 1.75% (of the 3.9% fee charged by Stripe).
> but makes up a disproportionate amount of the fee.
Trying to understand what you mean by disproportionate here. Are the majority of transactions well under $10?
Let's work from the inside out. "Portion", that's a part of something, pro- portion means by, as, of, toward. The -ate make it an adjective, the dis- reverses the meaning.
So it is not based on a portion of the fee (a percentage of it). Disproportionate.
This is bad because it systematically penalizes small transactions, which a proportionate fee does not do.