Stripe drops fees in Europe

I got this in an email overnight from Stripe:

We’re lowering our prices for our European users, effective as of December 9th. There’s no action necessary and we’ll automatically apply the new price to your account.

Our new price for users in Spain will be 1.40% + 25c for all European cards and 2.90% + 25c for all non-European cards."

I have no idea why they suddenly dropped their rate for European cards from 2.9% to 1.4%. I can’t find any news about it, apart from the email I received. But I’m not complaining. As 70% of my customers are in Europe, this gives me a small but appreciated Christmas (and ongoing) bonus.

Steve, with which currency does Stripe work?

In other words: if you’re based in Spain, does they “store” all the money in EUR, or they first convert all the amount to USD, and then convert the money to EUR to send it to you?

Steve, with which currency does Stripe work?

My Stripe Spain (beta) account is conducted in EUR.

I was using FastSpring until recently. They conduct my account in USD. So for EUR customers, they were charged 3% foreign currency conversion fee to get the money to FastSpring as USD, and then I was charged 1.5% (and sometimes much more) foreign currency conversion fee to get the money back to me in EUR. I’ve waited for years for FastSpring to give me an option to use EUR but I finally gave in.

FastSpring offers a lot, and I was reluctant to move away, but that 4.5% leak for 70% of my customers was just too much, especially given that their fees per transaction are significantly higher than Stripe.

I tried Avangate, as they offer EUR-denominated accounts, but as I mentioned in another recent topic, their turn-around time to open my account took way too long, and scared me off.

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I suspect customers in Europe pay more with debit cards and less with AMEX. Thus Stripe is lowering their fees across the board.

Just to be clear. They don’t do it just to be nice. I think they have less traction in Europe than they hoped for and high fees could have been the factor.

If you are a retailer in Europe with slim margins and bank offers you average rate of 1.3% while Stripe rate is 2.9%… 1.6% difference is basically huge. Yes, I know you can negotiate custom rate with Stripe once you are over $50,000 per month in volume but at that point switching costs are too high so you are pretty much forced to accept whatever Stripe offers. Most retailers would rather shop around to maintain their leverage.

Yes, I know SaaS couldn’t care less about 1% decrease but Stripe is chasing transaction volume and cut-throat retail is where the volume is.

They will maintain your account balance in EUR. If you charge EUR, there won’t be any currency conversion at all. If you charge in other currency than your base currency (EUR), then conversion will happen at the time of each transaction.

The reason they are doing this is probably an EU wide ruling that caps the “Interchange” fees that credit card providers can charge.

or slightly more readable -

As I understand it this is not a cap on the fee that Stripe charges to you, but the fee that banks charge to Stripe - they are just passing on some of the savings.

From one of the linked articles:

From 9 December 2015 the fees banks can charge will be capped at 0.30% and 0.20% for credit and debit card transactions respectively.

I think you’ve nailed it. I had heard of this ruling, but I wasn’t aware that it became active yesterday.

According to my accountant in Spain, Stripe’s main competition here is PayPal’s merchant services. I wonder if PayPal will also drop fees for intra-EU payments.