Stripe is a developer-centric payment processor that allows merchants to receive payments via debit or credit cards, mobile wallets, automated clearing house (ACH), and buy now, pay later services. It offers everything from payment buttons and hosted checkout pages to ecommerce store integrations. Stripe is well known for its open-source solutions and powerful API documentation.
Stripe also provides fraud protection, security features, invoicing, and subscription tools. Although it can accept in-person payments, Stripe specializes in online sales and works with many companies in over 40 countries.
Stripe is free to use, so you can create an account to test it yourself.
How Do Stripe Payments Work?
Stripe offers a user-friendly platform that makes it easy for businesses to accept payments with a seamless, secure process for customers. Here’s how it works:
- Payment form: Customers enter their payment information directly into a Stripe-enabled form on the business’s website or app.
- Data encryption: Stripe encrypts the payment data and sends it to the acquiring bank for processing.
- Payment approval: The payment is processed, and the business is notified.
- Funds transfer: The business receives the payment (minus Stripe’s transaction fee) in their Stripe account.
This smooth process appears seamless for the customer, requiring no redirection from the merchant’s website or app and ensuring a streamlined checkout experience.
Stripe Pricing
Stripe offers flat-rate pricing, with some add-ons for specific features. It also provides other tools, each with its price. Nonetheless, Stripe’s pricing is competitive with other payment processors, especially online rates. Here are the main prices you may encounter (for US merchants).
- Monthly fee: $0
- Ecommerce: 2.9% + 30 cents
- Card-present: 2.7% + 5 cents
- Keyed-in: 3.4% + 30 cents
- Touchless: 2.9% + 30 cents
- Virtual terminal: 2.9% + 30 cents
- ACH: 0.8%, $5 cap
- Invoicing: + 0.4% to 0.5%
- Recurring Billing: + 0.5% to 0.8%
- International payments: + 1.5% fee, 1% spread for currency conversion
- Stripe Checkout: $10 per month if using a custom domain
- Instant payout: 1.5%, 50 cent minimum
What types of payments does Stripe accept?
Stripe is designed to accept a wide variety of payment methods, making it a versatile option for businesses that want to cater to diverse customer preferences. Whether accepting payments via credit cards or offering modern options like Buy Now, Pay Later (BNPL), Stripe covers more than just the essential bases.
- Credit or debit card (Visa, Mastercard, American Express, Discover, and Diners Club)
- Mobile wallets (Apple Pay, Google Pay, Alipay)
- Bank debits (ACH Direct Debit)
- Buy Now, Pay Later (Affirm, Afterpay, Klarna)
- Local payment methods (Bancontact, EPS, iDEAL, SEPA Direct Debit, etc)
- Cryptocurrencies
Note that you cannot use Stripe as a virtual terminal solution to key in payments like you would need to accept orders over the phone.
Who Uses Stripe?
Stripe is popular with online businesses, startups, software-as-a-service providers, and B2B companies of all sizes because of its robust and flexible tools, including top-notch billing and security features.
About half of Stripe’s customers are based in the US, though it serves businesses worldwide. And, though Stripe serves dozens of business sectors, professional services make up over 27% of its customers. Many retail, hospitality, nonprofit, and healthcare companies also use Stripe.
However, it’s important to note that Stripe is not compatible with high-risk businesses, including remote tech support, firearms, and gambling. In addition to prohibited business types and activities, Stripe has a list of restricted business types that need prior authorization.
Learn more about Stripe’s prohibited and restricted businesses.
Should You Use Stripe?
Stripe is our top-recommended online payment processor.
In addition to most online businesses, we recommend Stripe for:
- Businesses needing a payment gateway
- B2B companies
- International businesses
While Stripe is a developer-centric platform, it also provides simple customization tools. Its versatility and security tools landed it a spot on our list of the best merchant services.
On the other hand, businesses with technical expertise can use Stripe to create highly customized online payment platforms. B2Bs and merchants accepting international payments will appreciate the versatility and level of payment security that it can provide.
Stripe Benefits
Stripe offers a wide range of payment solutions and customizable tools, which is why businesses love Stripe. It supports online payments, prebuilt checkout pages, payment links, billing, subscription management, and invoicing. With its robust features, businesses can easily tailor Stripe to their needs.
Here are some key benefits:
- Payment solutions: Streamline online payments with tools like checkout pages, invoicing, and links to simplify transactions.
- Customizable tools: Powerful and well-documented APIs to help build tailored payment portals, in-person terminals, and apps to fit your business.
- Security: Includes advanced fraud detection and prevention tools to ensure safe transactions.
- Additional features: Transparent pricing, dispute management, fast payouts, robust reporting, financing tools, and over 650 app integrations.
- Global reach: Operates in 47 countries, supporting 135 currencies for international businesses.
Read our full Stripe review for a detailed look at all of its features.
How to Get Started with Stripe
Here are the steps for using Stripe to accept payments:
Step 1: Sign Up with Stripe
Getting started with Stripe is easy—you just have to enter your name, email, country, and password to create a free account. However, to deposit funds from your transactions, you will need to enter your banking information and verify your identity.
Step 2: Connect Stripe to Your Website or Platform
After signing up with Stripe, you will be able to log in to your Stripe dashboard where you can:
- Integrate Stripe into your website or application with its developer-friendly customization tools or use one of its pre-built solutions
- Find your payment links that will let you use Stripe without using any code
- Create a hosted invoice page
- Set up customer portals where your customers can manage their accounts
- Create and send invoices
Step 3: Accept Payments
When you have set up payment links or integrated Stripe into your website or platform, customers can now submit payments. You can choose to enable credit or debit card payments, mobile wallet payments such as Apple Pay, ACH bank payments, and/or buy now, pay later financing options like Affirm.
Step 4: Receive Payouts
You will need to add a bank account to your Stripe dashboard to receive payouts. The speed of your first payout depends on where you are located. It usually takes seven to 14 days to receive your first payout after the first successful payment.
However, after your first payout, you can set up automatic payouts daily, weekly, or monthly or manually choose when to transfer your funds.
For US merchants, payout transfers typically take two business days.
What Is Stripe: Frequently Asked Questions (FAQs)
Stripe is well known for its online payment processing services. It provides merchants with the ability to set up and customize different ways of accepting payments online.
Also popular for its advanced payment security infrastructure, Stripe is considered one of the safest payment processing services in the industry. Every Stripe account is supported by an advanced machine-learning fraud detection system that conducts real-time risk assessments for each transaction. You can also set up your own ID, Social Security, and address verification system. Learn about online payment security and PCI compliance.
There is really no legal way to accept payment processing absolutely for free. However, Stripe is often compared to Square and PayPal as one of the cheapest payment processing services in the industry.
No, Stripe is not a merchant account. Stripe is an aggregate payment service provider. When you sign up for Stripe, you do not receive a dedicated merchant account. Instead, Stripe aggregates payments for all Stripe customers under one merchant account.
This is helpful for signing up quickly. However, because Stripe is an aggregate processor it is not very risk tolerant, which is why Stripe is selective on the types of businesses it will work with. This is also why Stripe reserves the right to freeze or suspend your account at any time.
Learn more about merchant accounts.
Stripe and PayPal are both popular payment processors but serve different types of businesses. Stripe is primarily designed for developers and businesses looking for more customization, offering extensive APIs to create custom payment experiences. It’s ideal for online businesses that need flexibility in integrating payments into their platforms.
PayPal, on the other hand, is more user-friendly and widely recognized, making it easy for small businesses and individuals to start accepting payments quickly with minimal setup or technical skills. It is usually available as a one-click integration in most ecommerce platforms.
Stripe charges 2.9% + 30 cents per successful card transaction for domestic payments. This means that for a $100 transaction, the Stripe fee is $3.20.
For international cards, additional fees may apply, and alternative payment methods like ACH debits have their own rates. Businesses can also explore volume discounts if their payment processing needs are high. These fees cover payment processing, security, and access to Stripe’s wide range of tools and APIs.
Bottom Line
Stripe has long been a popular and highly regarded payment processor for online businesses. In recent years, it’s acquired other companies to expand its offerings to online businesses. It’s not just for websites and online stores, but for any small business doing online payment processing, even with invoices. In addition, it offers banking services, credit cards, and business financing.
