Gov.uk has replaced Stripe with Dutch provider Adyen

Original Article ↗ Hacker News Discussion ↗

The UK government’s decision to replace Stripe with Dutch provider Adyen for GOV.UK Pay card and bank payments prompts debate over cost, payment infrastructure design, and digital sovereignty. Commenters contrast traditional card networks and high interchange fees with cheaper, instant bank-to-bank systems like Brazil’s Pix and India’s UPI, arguing that regulation and public rails can undercut private “rakes” without sacrificing fraud controls. The thread also examines Stripe’s developer-friendly model versus Adyen’s focus on larger merchants, and questions why governments don’t build or back domestic processors instead of relying on foreign platforms.

Contract and GOV.UK Pay context

  • Adyen will handle GOV.UK Pay card and “pay by bank” payments for local authorities, police and armed forces under a three‑year contract up to £25.3m.
  • Some are surprised how small this is relative to what mid‑size US companies spend on cloud.
  • GOV.UK Pay has processed ~£9.2B over a decade (avg £67/txn); a rough back‑of‑envelope suggests fees under 1% for this contract, but volume assumptions are uncertain.
  • This contract doesn’t cover all HMRC tax payments but a shared payments platform that other services can plug into.

Instant payments vs card networks

  • Multiple commenters compare card rails to instant bank systems: Brazil’s Pix, India’s UPI, EU SEPA instant, iDEAL, and FedNow.
  • Argument: you don’t need ~3% fees to move money; Pix reportedly runs at very low per‑txn cost using “boring” centralized tech and ISO 20022 messaging.
  • Counterpoint: centralized public rails may reduce resilience and flexibility; some UX constraints (e.g., UPI’s SIM/phone-number ties) are blamed on regulation and one‑size‑fits‑all decisions.

Fees, rewards, fraud, and regulation

  • Many see current card processing costs as economic rent to banks and schemes, especially in the US, where fees can reach 3–4% vs ~0.3% EU cap on interchange.
  • Others note in practice merchants and sometimes customers still shoulder fraud losses and chargebacks despite those fees.
  • There is debate whether high fees actually fund fraud management or are “pure profit,” with some pointing to card networks’ very high margins.
  • Rewards programs are framed as a regressive wealth transfer from debit/cash users to affluent rewards card users.

Stripe vs Adyen

  • Stripe praised for developer experience, self‑serve onboarding, and absorbing compliance/KYC complexity, especially for small and platform businesses.
  • Adyen seen as more enterprise‑oriented: higher minimum volumes (often ~€5m/yr), “talk to sales” onboarding, more complex APIs, but strong cost structure and broad payment method support.
  • Some argue focusing on larger merchants keeps Adyen’s economics stronger; others warn it cedes the startup segment to Stripe, which then locks in growing merchants.

Sovereignty and provider choice

  • Several see the move as part of a broader European trend to reduce reliance on US tech and card networks, and to promote EU‑based processors and bank‑to‑bank schemes.
  • Others argue building a bespoke state payment processor would be too risky and complex given UK government IT track record.