Gov.uk has replaced Stripe with Dutch provider Adyen

Original Article ↗ Hacker News Discussion ↗

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.