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Comment by stu2b50 | Hacker News Reader

That's because they're not the same class of processor. The chain is like

Your bank account -> visa/mastercard/discover -> PayPal's merchant bank account -> the person you're paying bank account

PayPal only replaces the ccs when you pay with their wallet. Otherwise they're just orchestrating the money flow (because integrating with the CC companies is a gigantic PITA)

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PayPal is not a credit card processor, it is Money transmitter, different legally

Stripe on the other hand is a credit card processor, and as a merchant you get a Merchant account, the same like Authorize.net who used to be the largest online processor before Stripe.

Back in the day (and I have been out of that market for over a decade) Authorize.net absolutely refunded processing fees on refunds

Didn't PayPal get a bank license which also caused them to close a lot of accounts that were created decades ago by users that weren't old enough for back accounts back then?

Just to add, PayPal is also most likely a credit card processor, serving as a Payment Facilitator (PayFac), which enables others to become CC Processors. It happens that PayPal and Stripe are money transmitters, which may come with being a PayFac.

Auth.net is a gateway/portal that facilitates CC transactions, and while you may be refunded on processing fees for the use of the gateway, someone, somewhere is likely eating the interchange and most likely occurring at the merchant level.

Notably, Square, founded in 2009 didn't become a money transmitter until sometime in 2013, IIRC, and I think a few laggard states in 2014. This was in service of Square Cash, not the core payments business. They were, however, merchant of record the whole time.

Authorize.net is not a payment processor but a payment gateway.

TSYS, Vantiv, PaymentTech are processors. your merchant account is usually with (i think) the acquiring bank that's part of the Visa/MasterCard/Amex/Discover network.

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