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Stripe - Pass full fee amount to customer

For volume based businesses, we lose money (30c per transaction) on the stripe fee we pay vs what we can pass onto the customer (because there's no option currently to just pass on the full fee, just a %). That % can't legally be higher than what we are charged, and we can't add the 30c fee to the % anywhere in settings. When we're processing 1,000 transactions per month, we lose $300 to fees. For a small business, this isn't justifiable. Most small businesses that have high volumes are low cost, so they rely on volume of sales to make profits.

Simply adding the 30c line item to invoices is also not an option as again, for a volume based business, it's too onerous and time consuming and we'd spend more in wages doing that than the amount recovered.

We need to able to pass on the full cost to the customer - please make this setting available or change the fee structure to exclude an additional cents component and just keep it to a flat %.

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Melissa Dawe shared this idea  ·   ·  Report…  ·  Admin →
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  • Simone Goodwin commented  ·   ·  Report

    I use another SaaS platform as part of my business which uses the Stripe payment gateway where I can add on the exact Stripe fee - 1.7% plus $0.30. It reconciles perfectly. The business is not out of pocket. I do need to raise invoices through Xero for payment but I have to turn off Stripe gateway and require payment via direct debit to avoid losing money.

    So it is possible. Xero should be able to fix this easily.

  • Sam Gray commented  ·   ·  Report

    It's wild that Xero and Stripe can't just surcharge exactly what it would cost to process. The maths isn't even hard at all.
    Read this as well if you haven't already: https://central.xero.com/s/question/0D58V00008uqRguSAE/gst-on-stripe-fees
    And my comment:
    This is wild. Interesting to finally have the context around Xero Inc and how they dodge GST.

    This causes a plethora of issues, that Xero will say is not their problem, including:

    - businesses incorrectly claiming GST on the fees. You only know you're not being charged GST because of a tiny fineprint under the Payment Services section. Then Xero gives you the option to automate my fees, and all you have to do is select an account (so you select Merchant Fees - which it is). Now Xero automatically creates the transactions for the fees, incorrectly, using GST on Expenses. Lol. Xero will say "it's up to the business and their accountant to determine the GST treatment". Yeah, but Xero says would you like us to automatically create the fee transactions for you? Yeah, cool, we'll do that but won't take any responsibility that it's correct, nor let you know how we decide on the tax rate we use ;) hehe
    - businesses losing money when surcharging their customers or being non-compliant with ACCC. If I want to surcharge and my original invoice had GST on Income, my surcharge should be GST on income. Now my surcharge is $10.00 and the Xero/Stripe fee was $10.00. I pay my $1.81 GST to the ATO and I don't get a $1.81 GST credit, so I lose out. Alternatively, I make my surcharge $11.00 and now I'm break even, but the surcharge is more than the cost to the business, so I am not compliant with ACCC

  • Noel Apperley commented  ·   ·  Report

    I just want to be able to switch on charging the client if they pay by stripe. Can't an option be added where the charges are worked out once the client clicks to pay by Stripe and then added to their total bill. Not much to ask really, pretty simple if you ask me?

  • Trish Giunta commented  ·   ·  Report

    There should also be an option to set a different reimbursement rate if an international card is used.

  • Anna Ceguerra commented  ·   ·  Report

    I took a payment through the Xero app on iPhone. I have several issues:
    1. It added tax ($1) on top of my tax inclusive price ($10)
    2. It added 19c on top of that price
    3. The customer paid $11.19 in total when they should have paid $10
    4. 40c was deducted for Xero application fee, so I only receive $10.79. I was not told about this fee during the application process

    What I want to happen is
    1. charge $10, no additional fees or taxes on top
    2. On my Xero invoice it includes the amount paid, and any fees and charges (including any gst paid)
    3. Total should show amount received from stripe

    It is critical that customers know how much they are getting charged. Also critical to know how much I receive

  • Michelle Collard commented  ·   ·  Report

    It really ticks us off how Xero charged us a $ 277.14 Xero application fee for $7000 odd on top of Stripe charging us fees. We had such a job disconnecting Xero from Stripe!!!!
    Agree the fees for small businesses are pathetic