Enemy At The (Billing) Gates
An online payment of USD 150 generates USD 14 for the middlemen.
We launched Send With SES a few months ago in early 2019. Currently Send With SES accepts only USD. This means, if you are a customer outside USA, you are charged in your local currency but your bank/card company pays us in USD. Send With SES is based in Singapore. So Stripe (our payment gateway) which receives this USD amount on our behalf, converts it to SGD and transfers it to our bank account.
A customer (and friend) from India recently subscribed to our Medium Plan ($150).
Customer expects to pay USD 150 (INR 10,620) and Send With SES expects to receive USD 150 (SGD 204).
- 1.Customers Bank adds its fees and charges Customer INR 11,049 (USD 156)
- 2.Stripe receives: USD 150 (SGD 204)
- 3.Stripe currency conversion charges: 2% x 204 = SGD 4
- 4.Gross Stripe Amount: 204 - 4 = SGD 200
- 5.Stripe charges: 3.4% x 200 + 0.5 = SGD 7.3
- 6.Net paid by Stripe to Send With SES: 200 - 7.3 = SGD 192.7 (142 USD)
- Customer expects to pay USD 150 but pays USD 156
- Business expects to receive USD 150 but receives USD 142
- An online payment of USD 150 has generated USD 14 for the middlemen.
There is nothing wrong in this. Banks and Payment Gateways like Stripe play a 'valuable' role in the movement of money. This is the price we pay for the ease of doing business.
Bank and Payment Gateway charges can be significant. You need to account for these in any CashFlow Projections you do. I would suggest you calculate these charges at 5% 6% of your revenue.
Customer bank statement
Stripe statement for Send With SES
- 1.Show and accept prices in local currencies so your customers know exactly how much they are paying. Stripe and most other payment gateways allow you to do this.
- 2.Get a bank account which accepts the same currency as your settlement currency. This will help you avoid currency conversion charges.
- 4.If you have a large payments volume, you can negotiate with Stripe (or your payment gateway) to reduce them.
Do you know of any other ways? Let us know .. hello<@>sendwithses<.>com.