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by friendly_fren 2317 days ago
Why are you using stripe to process transactions that large? It makes no sense to pay 3% on that.
1 comments

This is for a Hong Kong company processing a US client's credit card. What would be a better option?
Wire transfer. Fee is capped at $35.
I’ve done plenty of SWIFT international wire transfers. Total cost in practice is much higher than the “cap” of $35, especially when both parties costs are taken into account.

The biggest hit is usually the foreign currency conversion spread which is enormously unfavorable compared to the forex spot rate.

Then there are lots of problems if your bank doesn’t have a direct correspondant bank relationship with the Hong Kong bank and instead relies on other banks to handle that for them - this can lead to delays of up to a week and quite often leads to a link in the chain rejecting things for some reason (perhaps fraud checks or “know your customer” issues or perhaps one bank stripped all leading zeroes from the account number).

International wires are a pain in the ass, especially for relatively low sums like a few thousand dollars.

Personally, I use TransferWise for most international transactions now - it’s fast and the spread is much better.

Wire transfers can take days (I’ve once had it take more than a month), generally aren’t reversible, and it’s difficult to verify everything is correct beyond read through what you’ve entered multiple times.

There’s also no receipt you can point to to show the intended recipient was who received it.

That’s a huge disincentive for the client/customer to pay that way, and for the receiver the large delay in receiving money can be limiting as well.

Obviously it’s absurd that we’re still in this position in 2020 (that there isn’t a close approximation of instantaneous international transactions at a reasonable - eg fixed - price is beyond stupid)

That's a rather pessimistic view of bank transfer. Companies doing B2B transactions above 10k regularly use and often prefer bank transfer. It's more security for both the buyer and the seller, no fees, and cheaper exchange rate if changing currencies.

The reversibility of card charges is a huge con, not a pro. Don't want it for large transactions, especially if involving physical goods (non recoverable costs). Besides, chargeback is a privilege reserved to consumers, it's not available to business accounts.

Sure, if the customer is okay with that.

I've had clients that would prefer to pay 3% to be able to use their credit card to pay an invoice, rather than go through a wire transfer process.

You can just add the fee onto the charge, and let the customer decide if the convenience of paying with a card is worth it.

There are still jurisdictions where you can't tack on this fee.
Good suggestion. Is there a convenient (for the end user) approach to handling wire transfer on a web page?

(i.e. the polished Stripe checkout version of wire transfer)

Nope, they have to initiate from their bank. Many of which don’t have online WT services (the fraud potential is clearly huge)
That was my best information as well- the process of initiating a wire transfer from their bank is likely too much friction in many cases.

Not to mention the lack of protection the buyer would feel, as compared to a Credit Card.

If it's a Hong Kong customer, obviously doing international business, they're most likely banking with HSBC and have good online banking with instant bank transfer.
Do banks still exist that don’t allow for online international transfers? Are you sure?
Small credit unions, and I don’t recall seeing any on NZ banking sites when I grew up - they essentially have domestic WTs because you can send money to anyone’s bank account online (in NZ having someone’s bank account number means you can send them money, not the US absurdity of withdrawing money)