"In the US Stripe charges 2.9%. That's 66% more than in Australia. Do you think it costs Visa that much extra to process a payment in the US? No, it clearly does not."
Yes, actually, it does. Payment processors like Stripe (technically, an ISO) and its merchant acquirer partners must pass through most of their fees as interchange to the bank which issues a card. Those fees are much higher here in the U.S. versus Australia, where they are regulated.
A typical U.S. payment processor charges ~2.3%, of which the processor retains 0.5%, 0.1% goes to Visa, and the remaining ~1.7% goes to the card issuer. (This averages out card-present and card-not-present sales across all sizes of merchants, and is just a rough estimate, so no judgement on Stripe's fee level, which is reasonable for a simple blended rate for e-commerce.) All of the processor's product development, marketing, operations, profit, etc., have to come from that small 0.5% margin. (That said, it's still a good business, with 50% margins at scale.)
Yes, actually, it does. Payment processors like Stripe (technically, an ISO) and its merchant acquirer partners must pass through most of their fees as interchange to the bank which issues a card. Those fees are much higher here in the U.S. versus Australia, where they are regulated.
A typical U.S. payment processor charges ~2.3%, of which the processor retains 0.5%, 0.1% goes to Visa, and the remaining ~1.7% goes to the card issuer. (This averages out card-present and card-not-present sales across all sizes of merchants, and is just a rough estimate, so no judgement on Stripe's fee level, which is reasonable for a simple blended rate for e-commerce.) All of the processor's product development, marketing, operations, profit, etc., have to come from that small 0.5% margin. (That said, it's still a good business, with 50% margins at scale.)