I'm curious, you folks probably make money off of fraud right? You probably have negotiated whatever dispute fee you pay processors directly well below the $15 you pass on to sellers, pocketing the difference.
So I'm guessing that Radar's price was set with this in mind, you ran the regression to set a price to ensure revenue does not decrease by having better fraud detection. Hence the super expensive price. If this wasn't the case, Radar probably would be free.
Probably creates a really bizarre incentive. You don't want to deal with obvious scams that hurt processing reputation, but you probably also want to make your built in fraud detection just crappy enough to ensure you capitalize on that revenue.
No, we don't profit from fraud. First, just want to make clearer here that Radar is included for free in our standard pay-as-you-go pricing. The per-transaction fee is only applied if you have a custom pricing plan that "unbundles" our services by line item, or if you require our more advanced features (Radar for Fraud Teams).
On the dispute fee, banks charge varying amounts (they employ dispute investigators to read evidence, so it costs them to process). Some charge $10. Some charge $20. The average is $15, so we pass that $15 onto the Stripe user. (That way when accounting, the user doesn't have to factor in different fee amounts per bank—they only need to count the number of disputes, which is much easier.) We flex the average based on the country too—e.g., AU banks charge more, so the dispute fee is $20.
If a business wins the dispute, though, we refund the fee at our expense—the banks do not—because we feel it's the right thing to do.
They probably spend a huge amount of money on combating fraud. Whether that cancels out the unwanted profits from fraud? I have no idea. But you can expect them to be spending a great deal on getting rid of it.
So I'm guessing that Radar's price was set with this in mind, you ran the regression to set a price to ensure revenue does not decrease by having better fraud detection. Hence the super expensive price. If this wasn't the case, Radar probably would be free.
Probably creates a really bizarre incentive. You don't want to deal with obvious scams that hurt processing reputation, but you probably also want to make your built in fraud detection just crappy enough to ensure you capitalize on that revenue.