Within the realm of merchant services, perhaps no platform is more well-known for online payment processing than Stripe. Stripe is known for their technologically sophisticated platform, flexible APIs, and transparent, flat-rate fees.
In fact, the Stripe Payments platform is often considered one of the best solutions for online-based businesses—especially since any business owner can sign up for a free account online in only minutes. Overall, the benefits and drawbacks of using Stripe for payment processing can be summed up as such:
- Flat-rate fees, competitive with top alternatives
- No additional fees for setup, cancellation, account maintenance, etc.
- Can sign up for an account online quickly and easily
- Highly customizable with many integration options
- Great for international payments
- Issues with frozen or canceled accounts, especially for businesses in riskier industries
- Limited options for in-person payments
- May require technical skills or developer resources to customize
So, if you’re trying to determine whether Stripe is right for your small business, let us help. In our Stripe review, we’ll break down everything you need to know about this payment processing company—including Stripe fees, features, and customer reviews. We’ll also explore some top alternatives so that you have a full picture of what’s available on the market before making your final decision.
In short, Stripe is a payment processor, which means they support the electronic transfer of money from a customer’s bank (issuing bank) into a merchant’s bank (acquiring bank) as payment for goods or services bought with a credit card. But to say that is all Stripe does would be an oversimplification.
As we mentioned above, Stripe is known for is their industry-leading developer tools, which allow business owners to integrate and customize their payment processing solutions using a variety of different programming languages.
Stripe is a third-party payment processor, meaning they process credit card transactions from a portfolio of different businesses into a single merchant account (an account used to accept credit card payments). This means that when you sign up, you will get instant access to Stripe payment processing because you won’t need to go through the steps to open a dedicated merchant account (which requires underwriting).
This being said, it’s important to note that Stripe also provides their own payment gateway within their payments platform, which is a software application necessary to accept credit card payments online.
You can use Stripe to accept most payment types, including Visa, MasterCard, American Express, Discover, and several different foreign credit card networks, along with mobile wallets like Google and Apple Pay.
In addition, Stripe processes over 100 different foreign currencies and converts them at no additional charge. Among the tools and methods Stripe provides to accept payments are:
- Stripe Elements: A custom UI toolkit that allows merchants to build their own custom payment form for desktop, tablet, or mobile.
- Embeddable checkout: An embeddable payment form for desktop, tablet, or mobile that works within your website.
- In-Person payments: Although physical payments aren’t Stripe’s bread-and-butter, they offer a host of different mobile card readers and terminals that allow you to accept credit card payments in person. Furthermore, Stripe provides you with the development tools to build your own point of sale (POS) to integrate with your hardware.
- Invoicing: With Stripe Billing, you can send custom invoices and request payment from customers, including ACH payments. Stripe Billing also allows you to create recurring, usage-based, tiered, promotional, and scheduled payments.
- Stripe Sources: The Sources application-programming interface (API) allows merchants to accept payment methods from all around the world with a single integration. Supported payment methods include Alipay, Bancontact, and Giropay. You can also use Stripe.js to build your own checkout form with their set of APIs.
Stripe has direct integrations with most major credit card networks, allowing them to optimize routing paths, provide granular data, and reduce transaction latency for online credit card processing—meaning a seamless experience for customers and less risk for your business.
Stripe also automatically tests and runs multiple optimizations for every transaction to maximize acceptance rates. Transactions that are declined are automatically retried through different connections. Stripe also updates expired or renewed customer credit cards automatically.
For businesses located in the United States, Stripe deposits processed payments on a two-business-day rolling basis. This means funds processed on Monday should be available in your business bank account by Wednesday. Stripe also provides unified payments, meaning the funds will all be available regardless of the type of payment processed.
Additionally, Stripe pays out in your preferred currency. Moreover, it’s important to note that although U.S. businesses will typically have a two-business-day payout schedule, these schedules do differ by region.
Stripe protects your business against fraud with Radar, a machine-learning fraud system that trains on data across millions of global companies to help differentiate between fraudulent and legitimate purchases.
You can add an additional layer of protection with 3D Secure, which prompts customers to complete a verification step before completing their purchase. When charges are disputed, Stripe provides an end-to-end automated dispute-handling process that works directly with the card networks. Stripe also provides PCI compliance at no additional charge.
Through the Stripe API and dashboard, you can get real-time information about charges, fees, refunds, and transfers. You can also create financial reports with your data from Stripe. In addition, Stripe includes built-in reporting features and gives you the ability to automatically sync your data with your accounting software.
You can integrate Stripe Payments with hundreds of other platforms including everything from ecommerce to invoicing software. Some top software solutions Stripe can connect to are Slack, Xero, Shopify, and ShipStation.
Stripe offers 24/7 phone, email, and live chat support to all business owners using their platform. Additionally, the Support portal offers a robust amount of documentation and guides on all the different Stripe tools.
Finally, the last core piece to understand about Stripe as a payment service provider is their business operation tools. From your personalized dashboard, you can set specific roles and permissions for your team and track recent Stripe payment processing activity—everything from payments to refunds to disputes.
Your Stripe dashboard also allows you to customize charts and analytics, export data, streamline workflows, and leave notes for team members. Additionally, for account security, Stripe provides two-step authentication for your account. To track and manage your payments on the go, Stripe offers iOS and Android mobile dashboard apps.
When it comes to choosing a payment platform, pricing is often a top priority for business owners—especially with the variation seen with credit card processing fees.
Luckily, Stripe’s fees are fairly limited—they’re also very transparent and easy to understand. Overall, Stripe will not charge you to open an account and on the whole, they only charge transaction fees.
This means that for any online debit or credit cards you accept, you’ll simply pay a flat 2.9% + $0.30 per transaction. For in-person payments using the Stripe terminal, the transaction fee is only 2.7% + $0.30.
There are, however, certain transactions or instances in which your Stripe fees will differ:
- International payments: Payment using international credit cards will cost an additional 1% and if currency conversion is required, you’ll face another 1% fee.
- ACH payments: Stripe ACH fees are 0.8% per transaction for ACH direct debit, credit, or wire transfers, with a cap of $5.
- Instant payouts: If you want your funds more quickly instead of waiting for a traditional, free payout, you can pay a 1% fee to access your funds within minutes using an eligible debit card.
- Stripe Billing: After your first $1 million in payments processed through recurring billing, you’ll face a Stripe transaction fee of 0.5% per recurring payment
- Radar fraud protection: Stripe waives the $0.05 per transaction fee for accounts using the online payments platform and the basic Radar machine learning. For Radar for Fraud Teams, which includes customizable fraud protection solutions, you’ll pay $0.02 per transaction if you’re also using the Stripe Payments platform.
- Chargeback protection: If you want to add chargeback protection to your account, it will cost 0.4% per transaction.
With all of this in mind, Stripe does not charge for setup, account maintenance, PCI compliance, account cancellation, feature updates, or customer support. They do, however, charge a $15 chargeback fee for disputed payments.
Furthermore, you’ll see that on top of their standard payments platform Stripe offers additional services (as we’ll discuss below). These services have their own fees:
- Sigma: Starts at $0.02 per charge
- Atlas: One-time fee of $500, plus variable ongoing charges
- Stripe terminals: $59 or $299 depending on the credit card reader you choose
- Premium support: Starts at $1,800 per month
Finally, it’s worth noting that Stripe does offer a customized package solution for businesses with large payment volumes or unique models. According to their website, these businesses can receive volume and multi-product discounts, interchange-based Stripe fees, and country-specific rates. To learn more, however, you have to contact the Stripe sales team for a quote based on your business’s needs.
As you can see, Stripe has a lot to offer even without their add-on products. Nevertheless, it’s worth reviewing these additional tools as they can be extremely useful depending on your business and the type of payment solution you need.
Stripe Connect is a payment platform for larger marketplaces, such as Lyft or Kickstarter (both of whom are actual customers). With Connect, you can customize onboarding, set payout timing, and allow for complex money movement for the customers that utilize your marketplace.
Connect supports over 100 different types of currencies and processes credit card payments in 25 different countries.
Stripe Atlas is a toolkit for entrepreneurs to set up an internet business in the United States. With Atlas, you can create a domestic bank account, acquire a debit card, receive tax and legal advice, and begin accepting payments online via Stripe.
Atlas entrepreneurs also get special deals on services relevant to startups, such as $5,000 free credits from Amazon Web Services.
As we mentioned, Stripe does offer standard, built-in reporting features but using Stripe Sigma allows you to create fully customizable reports with the programming language SQL. If you can write an SQL query, Sigma can provide you the data for it right in your dashboard.
Stripe Relay is an API to power mobile in-app purchases. With Relay, you can link your ecommerce platforms with the app and add “buy” buttons.
Stripe Issuing is a platform for creating, distributing, and managing physical and virtual cards. Issuing enables businesses to create prepaid cards for their employees or virtual credit cards that can be used with a mobile wallet. Currently, this feature is invite-only.
Considering everything we’ve explored thus far, here are what we see as the most notable benefits of using Stripe for payment processing:
Although Stripe doesn’t offer the cheapest payment processing rates, their flat-rate pricing is pretty standard for online payments in the industry—it’s also on par with competitors like Square. Plus, Stripe fees are flat-rate, so you know what to expect when you use their service.
Additionally, compared to many merchant account providers who charge a variety of cancellation, account setup, monthly maintenance, and hidden fees, you won’t see any of these with Stripe.
Ultimately, the pricing is worthwhile considering the functionality you receive with the Stripe Payments platform.
Speaking of functionality, it’s worth mentioning again that—if you have a programming background—no payment processor offers you more customization than Stripe. Nearly every tool Stripe provides within their product suite can be customized to satisfy your business’s specific needs.
Along these lines, even if you don’t have the technical skill, Stripe can still provide significant customization opportunities—considering their integration options, the variety of payment types they accept, and the add-ons they offer.
Finally, another standout benefit of Stripe is that they’re a global payment solution. Whereas other platforms are much more restrictive with payments outside of your home country, Stripe is designed for international commerce. Not only can you accept international payments, but Stripe allows you to offer local payment methods to your customers and can provide payouts in your preferred currency.
With these capabilities, Stripe is a great payment processing option for businesses that rely on the international market.
All of this being said, of course, Stripe isn’t without some drawbacks. Here are some of the most notable downsides to keep in mind:
Account Stability Issues
The main issue many customers report with Stripe is that their account can be either canceled or frozen with little notice.
Unfortunately, this is a problem that is common amongst third-party merchant service providers. Although Stripe will give you instant access to payment processing, they will review your account and processing habits routinely. If they determine your activity to be too risky, they can hold your funds or cancel your account without warning.
Essentially, these account stability problems are a byproduct of sharing a merchant account with a portfolio of other businesses. The payment processor—in this case, Stripe—needs to be able to provide funds from processed payments to all their businesses. If one of the businesses in that portfolio keeps experiencing fraudulent or disputed charges, it affects everyone else. To resolve this issue, the payment processor (Stripe) removes the business from the account.
Therefore, although this issue may not necessarily affect your business, it’s worth remembering when deciding which payment processor is right for your business.
Limited Options for In-Person Payments
Next, although Stripe does provide in-person payment capabilities, including two card reader options, their solution is truly not designed for businesses that accept physical credit cards. If you’re a brick-and-mortar business that needs to accept credit cards, you’ll more likely benefit from a full POS system, which will allow you to accept payments, manage orders, track inventory, and more—all in the same place.
This being said, if you only need to take physical payments once in a while, Stripe can accommodate this need. However, if you’re going to be taking in-person payments more frequently, another solution will likely be a better option for your business.
Technical Skills Required
As we’ve mentioned, although you can take advantage of Stripe’s payments platform without a developer or advanced technical knowledge, it’s worth mentioning that without this type of experience, you can’t truly access everything Stripe has to offer.
Ultimately, Stripe is first and foremost designed to accommodate tech-based businesses, especially those that want the ability to customize their own payments solution using APIs. Therefore, if you don’t have this skill or don’t want to hire a developer to help customize your platform, you might find that a simpler online payment solution will be better for your business.
Stripe Customer Reviews
Although Stripe has an A+ rating from the Better Business Bureau, there are numerous negative reviews on the profile.
Most of the negative Stripe reviews pertain to the aforementioned account freezes or cancellations. Other negative Stripe reviews center around long payout times, and unhelpful or unresponsive customer service. Many customers reported not being able to reach customer service after having their account frozen or canceled, which is certainly alarming.
However, you shouldn’t let some negative Stripe Payments reviews deter you if you think this could be the right payment processor for your business. Remember that customers who have a negative experience with a business are much more likely to write a review than customers who had a positive experience.
Additionally, there are certainly positive Stripe reviews out there as well. Positive reviews of Stripe praise the ease of use, efficiency, and speed with which you can set up an account. Many customers also appreciate the fact that Stripe does what you need them to do—process payments—and does it well. Furthermore, positive Stripe reviews often comment on the number of integrations available and the benefits offered to developers.
Before you decide whether Stripe is the right credit card processing company for your business, you’ll want to explore what some alternatives have to offer. Here are two options worth considering:
If you’re a smaller business and would benefit from a simpler online payment solution, PayPal might be right for you. One of the biggest names in online payments, PayPal allows you to add a “buy” button or checkout page to your website to accept payments—and only charges 2.9% + $0.30 per transaction (the same as Stripe).
This being said, if you want greater flexibility with your platform, you can opt for PayPal Payments Pro, which costs $30 per month. Additionally, if you already have a merchant account and only need a payment gateway, you can select between two different payment gateways: Payflow Link and Payflow Pro.
Payflow Link allows customers to check out on your site using PayPal and PayPal credit through a hosted template and costs $0.10 per transaction. Payflow Pro will allow you to offer checkout through your own website and features greater customization. It costs $99 to set up plus $25 per month, on top of the $0.10-per-transaction fee.
Ultimately, when it comes to Stripe vs. PayPal, PayPal is a worthwhile option if you need a simple solution, especially if you want to accept PayPal as a form of payment. However, if you need any level of customization, you’ll likely have to pay a monthly fee with PayPal, whereas Stripe only charges transaction fees.
The other most notable alternative to Stripe is Square. Although many business owners only think of Square as a POS provider, Square also offers an online payment platform with processing fees that match Stripe’s (2.9% + $0.30).
With the Square Payment solution, you can use the Square payment gateway and customizable payment form to accept online payments, as well as develop your own solution using the Square APIs, integrate with your mobile app, and connect with any existing software you already have. Plus, if you’re looking to build an ecommerce store from scratch, you can do so with Square Online Store and use Square’s included payment processing system.
In this way, Square’s online payment solution serves as a middle-ground between the advanced Stripe and simple (but sometimes costly) PayPal.
Moreover, if you do need a solution that can accommodate both in-person and online payments, especially as a brick-and-mortar store, there’s perhaps no better solution than the Square POS.
Should You Use Stripe for Payment Processing?
So, what’s the verdict of our Stripe review?
At the end of the day, there’s no doubt that Stripe Payments makes sense for tech-forward businesses, as well as midsize and large businesses or businesses that operate primarily online.
Ultimately, businesses that have the technical knowledge will get the most out of Stripe. Ecommerce businesses will also benefit from Stripe since they offer so many different ways to sell, whether it be online, via an app, or on a third-party platform through the Stripe payment gateway.
Comparatively, Stripe doesn’t make as much sense for small businesses that also sell out of a physical location. Although you can still get a simple payment solution using Stripe in this situation, you wouldn’t be taking advantage of everything Stripe has to offer. Plus, Stripe wouldn’t give you access to a pre-built POS and your hardware options are limited.
All of this being said, if you’re still unsure whether Stripe is right for your business, you can try it out for yourself. Since you can sign up for Stripe, Square, and PayPal for free, you can explore all of your options risk-free to determine which one will best meet your business’s needs.
Matthew Speiser is a former staff writer at Fundera.
He has written extensively about ecommerce, marketing and sales, and payroll and HR solutions, but is particularly knowledgeable about merchant services. Prior to Fundera, Matthew was an editorial lead at Google and an intern reporter at Business Insider. Matthew was also a co-author for Startup Guide—a series of guidebooks designed to assist entrepreneurs in different cities around the world.