This is mildly interesting, and maybe important for a few people. That's enough.
I've met drivers who have had to pay out multiple times per day.
- Buy ads targeting your page selling stuff (for example a course) - Generate revenue - Instant payout - Repeat
In this flow you don't need to wait 1 month for a payout so you are not limited doing this once a month, you can do this for example 12 times a month therefore generating much more revenue.
Founder still lurks HN as well.
So you can use the balances from the people who added money 2 days ago, today.
see: Money Transmission laws
The last time I created an invoice manually it tried to upsell me on a far more expensive plan just so I can group things on an invoice. Even worse, adding a recurring product to a quote results in an upsell.
It’s honestly embarrassing. Feature-gating things with 0 marginal cost feels desperate.
Does this portend anything for the company, in the way that not backfilling positions means that layoffs may be imminent? Or perhaps a corporate transaction like an IPO?
Instant payout is much riskier because if a bad actor is using Stripe to cash out stolen credit cards they have less time for the banks to detect and report it before the money is gone. As a result it has a higher cost to the company.
The reason credit card fraud for charges costs money to processors is because of charge backs. I believe charge back fees originate from the card networks themselves (Visa, MasterCard, etc). These processors also enforce a variety of limits when it comes to chargebacks for each merchant. This means if you're the layer between the merchant and the network, the merchants generally will rely on you to pre-emptively detect fraud. Those systems all cost money too.
As far as I know when it comes to payout rails such as ACH, real time payments (RTP), Zelle, I don't believe the payment processor holds any liability for fraudulent transactions. In other words, if a fraudulent payout occurs through stripe via RTP then The Clearing House banks aren't going to come after stripe for the money. They'll tell the end user "whoops, should've taken better care of your digital info. Bye!"
source: Worked at a payment processor and worked on payout rails and integrating with banks. Also do work now as an end user of a different payment processor that does charging, payouts, etc.
If Stripe instantly pays out funds to a merchant and there is a charge back, they have to claw that money back. This is normally done by drafting the funds from the deposit account, but if that is empty Stripe (or whatever processor) eats it and it becomes a collections issue.
Processors normally handle this by holding funds on suspicious transactions for 180 days (the max chargeback window). What is suspicious? For most processors it is literally whatever adds up to a [fraud rate]% of your volume over a 180 day window. Stripe doesn't do this because they are "the friendly processor" so they just take a bigger slice and cover losses out of that.
source: I spend a non-trivial amount of time monitoring threat actors and figuring out exactly how they are doing bad stuff, which means understanding the risk/abuse side of the house
Services like Venmo and Cash App basically have no income stream without paid instant payouts.
I have no "method" filter on that page, only "date", "amount" and "status". Also they talk about 2 business days payments as default but in the settings you can only choose between automatic every day / week / month.
Since the instant payout is kind of a loan and you have to request it, pretty sure it doesn't affect me but it's all very confusing.
Only costs ~$25/month to plug into these rails, plus a few cents per transaction.
https://www.frbservices.org/financial-services/fednow/organi...
https://www.frbservices.org/resources/fees/fednow-2024
https://www.frbservices.org/binaries/content/assets/crsocms/...
But then they wouldn't be able to charge more fees
Appears they are still lagging in adopting FedNow (while Wells Fargo and US Bank have adopted)
Stripe increasing "instant payout" fees from 1% to 1.5% on US
Current title:
Stripe increasing "instant payout" fees by 50%
"There has been a 1000% increase in traffic deaths this year, we must do something!"
Ah yes, we went from 1 death per year to 11 because there was a fatal bus accident, surely we need to do something.
> June 2024 pricing update for Instant Payouts for businesses in the United States
i dont care about anyone trying to say: huehehue thats how its written. no its not.
but yeh i guess ppl rather focus on shitposts and talk endlessly
Common example headline: "Inflation up by 100%" when it went from 1% to 2%. The headline implies goods & services are now 2x more expensive than before, which is not the case.
If we've just replaced stupid inter-bank 3 day cheque clearing bullshit fees with stupid microtransaction fees which are variable at-will by the guy in the middle, whats the point?
Money is regulated. Money flows should be regulated. This industry should be regulated, and the fees set to cost recovery, not profit point. If that reduces to one interchange agency per economy, I'd be fine: Nationalise them all.
Does it cost the CPU more to process $1b in one transaction than to process 10c?
The “instant payout” is actually a temporary loan from an entity already approved as having all funds available for immediate disposal at multiple links in the chain. This is then used to create the illusion of an instant payout… while the “loan” guarantor receives payment 2-3 days later.
This is also why there’s actually a “instant payout” limit on your Stripe account, almost like a credit limit - because it basically is credit.
No, that's usually just how long ACH transfers can take. In most cases, it's more like next-day these days, in my experience (e.g. from paying out from PayPal to my checking account or between checking accounts), but that depends on the specific ACH type and timeline, I believe.
> The “instant payout” is actually a temporary loan
It's usually not. Actual settlement of both card and ACH payments usually happen on the next business day, but since that goes for both legs of most transactions, the settlement periods "cancel each other out".
> You can always pay out your funds using our standard schedule (2 business days) for free.
Exhibit A) SWIFT famously states it doesn't actually move money.
Exhibit B) Hawallah
ie. It's good enough to promise to deliver in due course most of the time. That's equivalent to a transfer, most of the time. The evidence is that it is the basis of many existing settlement networks (SWIFT/hawallah), but also the stock market / individual broker ledger system, the dominant off-chain transfer model of many exchanges for digital assets, crime ("you have X days to deliver Y or Z happens"), etc.
Where it's not good enough, you attempt to store enough to cover eventualities with forward prediction to maintain settlement volumes, offset with promises, utilise third party risk mitigators (insurance/liquidity providers) and/or leverage reputation.
Speaking hypothetically, because the original comment was made predominantly in jest, but in the knowledge that it was actually potentially applicable enough to yield startups, let me humor you. Specifically, in my mind where blockchain might add value is if you wanted to obtain local liquidity at short notice. I understand micro-lending markets are now well developed on Ethereum, but haven't bothered to dig in to the implementation myself. The point is, it would be theoretically possible to build such a system to translate real world promises to on-chain contracts and thus have the ongoing support of globally distributed capital behind providing stability to local micro imbalances of liquidity as a service. This is an existing business model seen in many aspects of the financial system.
Start looking at the world this way, and notice similarities between capitalism, crime, crypto, cold steel and cojones. It's all the same game. Physical or digital, settled or promised, it's about risk and reward, reputation, and "the availability of effective recourse" (ie. trust). The same band-aids are used everywhere.
I’m interested because my business used Stripe Connect but this change seems to have zero change for me. If businesses want instant payouts they can decide that on their own and if they want to eat the fee, it doesn’t matter to me.
All companies taking funds via Stripe Connect will know they are doing so via Stripe, so I don't think a list of Connect providers would help here.
Of course I'm nearly certain that sending me that money instantly costs Paypal nothing, but enshittification creeps into all things, sort of like the dust created by dead skin and human trash. It permeates. Though in Paypal's case, shitty service has been a byword for decades already.
Edit: when occasionally receiving payments in crypto on the other hand, I get charged minimal fees, can convert to my local currency at essentially market exchange rate, and can have the money transferred to my actual bank account at any time 24/7 for free. Yes yes, HN hates crypto and blah blah, but outside the bubble, there are people who find these things useful.
