Stripe is a developer-centric payment processor that allows merchants to receive payments via debit or credit cards, mobile wallets, 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 be used to 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 for yourself.
How Do Stripe Payments Work?
Stripe offers a user-friendly platform. For businesses, it’s quick to enroll and start accepting payments. For customers, the payment form field is quick and secure. Stripe payments can be added to any website, app, or platform for a seamless checkout experience.
When a customer places an order or makes a payment with a business using Stripe, the customer simply enters their payment information into the form fields. Although Stripe is hosting the payment processing, the process appears seamless for the customer, and they do not need to be redirected from the merchant’s website or app.
Once the customer submits a payment, Stripe encrypts the data and sends it to the acquiring bank, which will process the payment.
Once the payment is approved and processed, the business will receive a notification that the payment was successful. Those funds will then be available to the merchant in their Stripe account (minus the transaction fee).
Stripe offers flat-rate pricing, with some add-ons for specific features. It also offers other tools, each with its own price. Nonetheless, for payment processing, it’s competitive with other credit card processors, especially when looking at 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%–0.5%
- Recurring Billing: + 0.5%–0.8%
- International payments: + 1.5% fee, 1% spread for currency conversion
- Stripe Checkout: $10 per month if using custom domain
Get a complete look at Stripe’s features, pricing, and alternatives.
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.
Did you know?
Stripe powers the payment processing behind many other tools including Shopify, BigCommerce, Amazon, Lightspeed, MindBody, Squarespace, WooCommerce, Xero, and more.
Should You Use Stripe?
Stripe is our top-recommended online payment processor.
In addition to most online businesses, we recommend Stripe for:
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.
Why Businesses Love Stripe
Stripe offers a wide variety of payment processing solutions including online payment processing, prebuilt checkout pages, payment links, billing and subscription management, and invoicing.
Plus, Stripe offers a wide range of customizable tools and user interfaces (UIs) that businesses can adapt to their specific needs to create online payment portals, in-person payment terminals, apps with built-in payments, and more.
Additionally, Stripe offers:
- Top-notch security and anti-fraud tools
- Transparent pricing
- Dispute management
- Fast payouts
- Robust reporting, sales tax, and accounting tools
- Financing and expense management tools
- Powerful and well-documented APIs
- Over 650 app integrations
Plus, Stripe is available in 47 countries and 135 currencies.
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 own billing accounts
- Create and send invoices
Step 3: Accept Payments
When you have set up payment links or integrated Stripe in 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 after the first successful payment to receive your first payout.
However, after your first payout, you can set up automatic payouts on a daily, weekly, or monthly schedule 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.
- Credit or debit card (Visa, Mastercard, American Express, Discover & Diners)
- Mobile wallets (Apple Pay, Google Pay, Alipay)
- Bank debits (ACH Direct Debit)
- Buy Now, Pay Later (Affirm, Afterpay, Klarna)
Note, you cannot use Stripe as a virtual terminal solution to key-in payments like you would need to accept orders over the phone.
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.