Business owners have many administrative tasks to perform regularly; payment processing is crucial to keep the business running and cash flowing in. In order to accept card payments, a merchant account is necessary. Stripe and other payment service providers have become popular with many merchants.
Stripe is a San Francisco, California-based Financial Technology company that provides a payment gateway for online and mobile payments. It was founded in 2010 by John Collison and Patrick Collison.
Stripe offers a suite of payment APIs that enables businesses to accept payments over the internet. Its platform supports various payment methods, including credit and debit cards and alternative payment methods such as Alipay, Apple Pay, and Google Pay. Stripe also provides recurring billing, fraud prevention, and subscription management features.
In addition to its payment gateway, Stripe provides various tools and services to help businesses manage their financial operations, including invoicing, accounting, and reporting. The company also offers several integrations with other software and platforms, such as e-commerce platforms, invoicing systems, and accounting software.
Stripe is widely used by businesses of all sizes, from small startups to large enterprises. It is known for its ease of use, flexible pricing, and developer-friendly APIs, making it a popular choice for businesses that want to integrate online payments into their operations.
Below we’ll explore Stripe’s products and services, pricing structure, terms and conditions, and other legalities that merchants must abide by to maintain a Stripe account, and what has made the company stand out among the competition.
Founded in San Francisco, California, in 2010 by John Collison and Patrick Collison, both brothers who were born and raised in Ireland, and both had an early interest in technology and entrepreneurship. John was just 17 years old when he dropped out of college to start his first company, and Patrick was just 19 when he co-founded Automatic, a company that was eventually acquired by Live Nation.
The inspiration for Stripe came from their own experiences trying to build businesses and accepting payments online. They saw that the process was slow, complex, and fraught with security risks, and they felt there must be a better way. They decided to build a payment platform that would be simple, fast, and secure, with a focus on developer experience.
The Collisons launched Stripe in 2010, intending to make it easy for developers to add online payments to their applications. They started by building simple APIs that would allow developers to accept payments without worrying about the complexities of payment processing, fraud prevention, and security. Over time, they added new features and expanded the platform to support various payment methods and use cases.
Stripe quickly gained traction, and by 2012, the company had raised $18 million in funding from some of the top investors in Silicon Valley. Over the years, Stripe has continued to grow and expand. It has become one of the leading payment platforms in the world, serving millions of businesses and processing billions of dollars in payments every year. Today, Stripe is known for its focus on innovation, commitment to making commerce better for everyone, and user-friendly platform that helps businesses grow and succeed.
As a result, at its peak in 2021, the company was the most valuable private company funded in Silicon Valley, valued at $95 billion . However, fortunes at Stripe have changed as of late. In raising $6.5 billion, the company recently had a down round, cutting its private valuation by about half to $50 billion.
Some see this down round reflective of the state of eCommerce in the US, which peaked in 2021 but has lagged as of late. Others point out that the company is a bellwether of tech startups’ market conditions, which had a heyday in 2020 and 2021, pulling demand forward in spending during that time, only to be normalized today, serving as a harbinger of the market and economic conditions.
Nonetheless, raising over $6.5 billion in an environment when economic conditions seem to be at a precipice of recession and when venture capital funding has pretty much dried up is a testament to the company’s position of strength.
Stripe is best known for its payment processing capabilities and focus on innovation and user experience. The company has a suite of products that make it easy for businesses to accept payments, manage recurring billing, and grow their revenue. Some of the critical areas where Stripe excels include:
Payment Processing: Stripe’s core product, Payments, enables businesses to accept payments online and in person easily. The platform is known for its ease of use, fast and secure payment processing, and global reach.
User Experience: Stripe is dedicated to making it as simple and seamless as possible for businesses to get set up and use their services. As can be witnessed from the company’s products and services lineup, Stripe focuses on innovation and user experience. It constantly develops new products and features to help businesses grow and succeed in almost every aspect of the company.
Global Reach: Stripe operates in over 47 countries worldwide and allows the acceptance of over 135 currencies, making it easy for businesses to expand globally and reach new customers. The company supports multiple currencies, local payment methods, and language options, making it easy for companies to operate in various countries and get a global audience.
A bevy of ancillary services: Stripe offers many tertiary services to cater to all types of business needs. The entire service stack offered by Stripe tends to pile up in terms of fees, however, whether a merchant needs to register a business, open a bank account, implement advanced fraud management solutions, mitigate against chargebacks, or collect the applicable taxes across multiple jurisdictions, Stripe has a solution and the entire process is automated.
Overall, Stripe is best at providing a suite of payment processing and financial infrastructure products designed to help businesses grow and succeed. Whether a small startup or a large enterprise, Stripe has the tools and resources needed to succeed in today’s digital economy.
Stripe is a global technology company that operates in many countries worldwide. Stripe offers its services in over 47 countries, including the United States, Canada, the United Kingdom, Australia, and much of Europe, allowing businesses to accept more than 135 currencies.
Stripe’s business provides payment processing and financial infrastructure for businesses of all sizes. The company offers a suite of products, including payments, subscriptions, billing, and more, that make it easy for companies to accept payments, manage recurring billing, and grow their revenue.
In addition to its global reach, Stripe is known for its focus on innovation and user experience. The company is dedicated to making it as simple and seamless as possible for businesses to use their services. They are constantly developing new products and features to help companies to grow and succeed.
Given Stripe’s global footprint in many countries around the world, providing payment processing and financial infrastructure to businesses of all sizes, whether you’re a small startup or a large enterprise, Stripe aims to offer merchants the tools and resources needed to grow a business and succeed in today’s digital economy. Stripe offers several products, each with its pricing model. Here is a high-level overview of Stripe’s top products and services:
Payments – Stripe’s core product enables businesses to accept payments online and in person. The company markets this as global reach and local expertise, offering support for cardholders available in over 195 countries; businesses are offered local payment methods that are sure to streamline conversion rates and improve customer journeys. Stripe strives to take over each new country’s technical and complex regulatory nuances, allowing businesses to concentrate on – the business.
Subscriptions: This product allows businesses to manage recurring payments and subscriptions.
Billing: This product provides invoicing, billing, and revenue recognition features for businesses and is offered as an add-on service offering, and there is no additional fee for using this product.
Connect: This product enables businesses to pay out to other companies and individuals using Stripe.
Stripe Terminal: This product provides a point-of-sale system for in-person payments. By providing versatile developer tools, pre-certified card readers, and cloud-based hardware management, Terminal enables merchants to integrate their online and offline channels seamlessly.
Businesses can offer their customers a seamless experience across channels, such as reserving online and picking up in-store, by integrating Stripe Terminal into their mobile and web applications using the company’s software development kits.
This enables merchants to customize the in-store checkout flow. Furthermore, integrating Stripe allows them to manage all their online and offline sales in one place, simplifying reporting and reconciliation while providing a unified customer view. The Stripe Terminal is compatible with Stripe Payments, Connect, and Billing, making it easy to streamline operations.
Stripe Checkout – this is a prebuilt, hosted payment page optimized for conversion. Whether businesses offer one-time purchases or subscriptions, they can use Checkout to accept payments online easily and securely.
Stripe PaymentLinks – a no-code payment solution. Merchants can start accepting payments quickly and without any coding by creating Payment Links, which allow you to sell products or services, start subscriptions, or collect donations. Businesses can customize the look of the links to match their brand and share them anywhere, with the same link being used across multiple channels. Once payment is received, they will receive a notification, and the funds will be deposited into their bank account.
Stripe Elements – Stripe provides a suite of customizable UI building blocks to design a secure and optimized payment experience that matches the look and feel of merchants’ branding and website. These components are easily customizable with CSS-level styling and come equipped with built-in accessibility features, input masking, autofill, and more, saving development time and reducing user confusion.
By integrating with Stripe, businesses can access 25 payment methods and manage them from a single Dashboard, making it easier to reach more customers and unlock new markets. Stripe’s platform also meets industry certification standards to help keep payments safe and reduce compliance burdens for your business.
Stripe Apps and Integrations – Stripe partners provide organizations with the necessary tools and support to accelerate their business at any stage. These partners drive innovation, offer financial services, and transform financial infrastructure to enable the expansion of companies into new markets, both locally and globally. Organizations can streamline their operations and unify their reporting by integrating existing technology stacks, automating processes, and simplifying workflows. Stripe Apps provide additional support for businesses to set up recurring invoices or subscriptions and streamline tax collection and calculation.
Stripe Tax – this is a solution that automates tax calculations and collections for businesses, enabling them to comply with tax laws and regulations in over 130 countries and most US states. The service simplifies tax compliance and helps companies to focus on scaling their operations. With Stripe Tax, businesses can add a single line of code or click a button in the dashboard to start collecting taxes globally, know where to register for taxes, automatically calculate and collect taxes, and file and remit taxes with ease using comprehensive reports. Stripe Tax validates the EU VAT ID and Australian ABN number when necessary and accurately calculates the right amount of tax to be collected based on the customer’s precise location.
Stripe Atlas – this platform helps entrepreneurs launch their startups by simplifying the process of forming a company. By filling out a short form, Stripe Atlas creates the legal framework for a company, files the necessary paperwork, and applies for the Tax ID number to have a business set up within a few days. The platform also allows issuing stock to founders and activating a Stripe account to start accepting payments. Additionally, Stripe Atlas provides access to a supportive community for personalized help and learning best practices.
Stripe Revenue Recognition – Stripe Revenue Recognition is a solution built into the Stripe platform that automates and simplifies the accrual accounting process for businesses, allowing them to close their books quickly and accurately. When it comes to getting a business’s financial statements compliant with IFRS 15 and ASC 606 revenue recognition standards, it’s better to leave it to the experts. Sure you can pay more to an accountant to do that, or businesses can also cut down on both time and expenses by using this feature.
With Revenue Recognition, businesses can gain a complete view of their revenue, including subscriptions, invoices, and payment transactions stored in Stripe. The solution can also integrate with other third-party data sets to pull in data on revenue, fulfillment schedules, and service terms to consolidate all revenue data in one place.
Automated revenue reports and dashboards provide insights into business performance with prebuilt reporting tools. Furthermore, custom rules can be created and automated to apply to certain types of transactions that cater to a business’s nuances. For example, a certain business may have a certain life cycle of services and other solutions offerings. Based on specific accounting regulation, it may need to be recognized in a certain manner or over a period of time, which can be fed into Stripe’s product, giving the business and its accounting team a complete history and overview of any client, with an audit trail down to any specific transaction.
Stripe’s pricing structure is based on a transaction fee model. For most products, the pricing consists of two components: a percentage of the transaction amount and a fixed fee per transaction. It’s worth noting that the exact pricing for each of these products can vary depending on the country, currency, and volume of transactions. Stripe offers a transparent pricing model with no hidden fees, so you can easily see precisely what they’ll be paying before you sign up. Stripe provides a free trial for new customers, so you can test the platform and see if it’s right for your business before committing to a paid plan.
The exact percentage and fixed fee vary depending on the product and the country, but generally, the transaction fee ranges from 2.9% + 30 cents to 3.4% + 30 cents per transaction. For example, if you process a payment of $100, the transaction fee would be $3.20 ($2.90 + 30 cents).
Although Stripe’s pricing is transparent and there are no hidden fees, there are other fees for specific features or services in addition to the transaction fee, such as currency conversion, chargebacks, or high-risk transactions. In fact there are a slew of fees that we uncovered for everything ranging from tap to pay transactions to point to point encryption of transactions.
The company provides a simple pricing model, so merchants can easily understand the cost of using their services. We reviewed Stripe breakdown of all their fees and have gone ahead in presenting a summarized tabulation of that breakdown so merchants can easily see and understand precisely what they’ll be paying before signing up.
Payment method |
Integrated Pricing |
Customized Pricing |
Online and eCommerce payments |
2.9% + $0.30 |
Customized plan offering |
Payments via Wallets |
2.9% + $0.30 |
Customized plan offering |
Payments via International Credit Cards |
Additional 1% + $0.30 |
Additional 1% + $0.30 |
Payments requiring currency conversions |
Additional 1% |
Additional 1% |
Hosted Invoices |
3.3% + $0.30 |
Customized plan offering |
Keyed-in Payments |
3.3% + $0.30 |
Customized plan offering |
Stripe Terminal Payments |
2.7% + $0.05 |
Customized plan offering |
Payment via ACH Credit |
$1.00 each |
Customized plan offering |
Wire transfers |
$8.00 each |
Customized plan offering |
Payment via Checks received |
$5.00 each |
Customized plan offering |
Bounced check fee |
|
|
Payment via ACH Direct Debit – Standard Settlement |
0.8% – maximum of $5.00 |
0.8% – maximum of $5.00 |
Payment via ACH Direct Debit – 2-day settlement |
1.20% |
1.20% |
Payment via ACH Direct Debit – failed payment |
$4.00 each |
$4.00 each |
Payment via ACH Direct Debit – disputed payment |
$15.00 each |
$15.00 each |
|
|
|
POINT OF SALE |
|
|
Stripe Reader M2 |
$59.00 |
$59.00 |
BBPOS WisePOS E |
$249.00 |
$249.00 |
Contactless Payments |
$0.10 per authorization |
$0.10 per authorization |
Point to Point encryption (P2PE) |
$0.05 per authorization |
$0.05 per authorization |
|
|
|
ANCILIARY SERVICES |
|
|
Stripe Billing |
0.50% |
0.50% |
Stripe Checkout with Custom domain listing |
$10 per month |
$10 per month |
Stripe Invoicing |
0.4% per paid invoice |
0.4% per paid invoice |
Stripe PaymentLinks |
$0.00 |
$0.00 |
Stripe Checkout |
$0.00 |
$0.00 |
Stripe Checkout with Custom domain listing |
$10 per month |
$10 per month |
Stripe Connect – Standard |
$0.00 |
$0.00 |
Stripe Connect – Custom/ Express |
Starting at 0.25% |
Starting at 0.25% |
Stripe Tax |
0.50% |
0.50% |
Stripe Revenue Recognition |
0.25% |
0.25% |
Stripe Radar |
$0.00 |
$0.05 per screen |
Stripe Radar for fraud monitoring departments |
$0.02 per screen |
$0.07 per screen |
Chargeback Protection |
0.4% per transaction |
0.4% per transaction |
Stripe Atlas |
$500 |
$500 |
Stripe Gift Cards – Digital |
$0.10 per card |
$0.10 per card |
Stripe Gift Cards – Physical |
$3.00 per card |
$3.00 per card |
Stripe Gift Cards – Disputes |
$15 per dispute |
$15 per dispute |
|
|
|
FEES |
|
|
Set up fees |
$0.00 |
$0.00 |
Monthly fees |
$0.00 |
$0.00 |
3D Authentication |
$0.00 |
$0.03 per attempt |
Card account updater |
$0.00 |
$0.25 per update |
Adaptive Acceptance |
$0.01 |
0.008 |
Instant payouts |
$0.01 |
0.01 |
Post-Payment invoicing |
0.4% – maximum of $2.00 |
0.4% – maximum of $2.00 |
Stripe Financial Connection |
|
|
Instant bank verification |
$1.50 per verification |
$1.50 per verification |
Balance Verification |
$0.10 per API call |
$0.10 per API call |
Account Owner Verification |
$1.50 per API call |
$1.50 per API call |
Transaction feed |
$0.30 per account per month |
$0.30 per account per month |
Identity Lookup |
$1.50 per verification |
$1.50 per verification |
Identity Verification |
$0.50 per lookup |
$0.50 per lookup |
|
|
|
Stripe operates month-to-month, and no long-term contract is required to use their services. This means merchants can start or stop using Stripe anytime without incurring penalties or termination fees.
When you sign up for Stripe, you must agree to Stripe’s Terms of Service and Privacy Policy. These agreements outline the terms and conditions of using Stripe’s services, including payment processing, security, and liability details. The agreements are updated from time to time, so it’s essential to review them periodically to stay informed about any changes.
In addition to the Terms of Service and Privacy Policy, Stripe may also have specific agreements with certain merchants, such as enterprise agreements or custom pricing agreements. These agreements are tailored to the needs of individual merchants and may include additional terms and conditions beyond what is outlined in the standard Terms of Service.
Overall, Stripe provides a flexible and transparent contract that allows merchants to use their services month-to-month without being locked into a long-term commitment, making it easy for businesses to start accepting payments quickly without worrying about any long-term lock-ins via contractual obligations.
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While Stripe is widely regarded as a top player in the payment processing industry, some merchants have expressed specific complaints about the company and its services. Here are some of the most common complaints I’ve seen:
High Transaction Fees: Some merchants have expressed dissatisfaction with Stripe’s transaction fees, which can be higher than those of other payment processors. Some merchants feel the fees are too high, especially for low-volume businesses.
Limited Customer Support: Some merchants have reported that customer support from Stripe can be limited or slow to respond. Some merchants have also expressed frustration with needing a dedicated account manager or support team. However, it is also important to clarify that Stripe’s enterprise customers are assigned a dedicated account manager to directly handle any inquiries that customers face or need help with.
Complex Integration Process: Some merchants have found the integration process with Stripe complex, especially for businesses new to online payments. Some merchants have reported difficulties setting up the platform and connecting it with their existing systems and processes.
Limited Customization Options: Some merchants have expressed dissatisfaction with the limited customization options available with Stripe. For example, some merchants would like more control over the appearance and branding of the checkout process, but these options are currently limited with Stripe.
Issues with Dispute Resolution: Some merchants have reported issues with the dispute resolution process with Stripe. Some merchants have expressed frustration with the time it takes to resolve disputes and the lack of clarity around the dispute resolution process.
Finally, we witness a common theme among some reviews in which customers reported being charged a transaction fee of 2.9% by the company even after issuing refunds. Stripe explicitly states on its website that while there are no fees for refunding a payment, the original payment’s fees will still be applicable upon refund.
This practice can be disconcerting for some business owners who may be accustomed to only paying a flat fee of $.30 for refunded transactions instead of the entire percentage fee as well. Although this is a standard practice for many credit card payment providers, Stripe charges a percentage fee for the entire transaction amount for refunded transactions. This is something all merchants should be cognizant of, especially since Stripe does not accept most high-risk industries, there are still certain types of normal-risk businesses that may experience higher refund rates.
It’s worth noting that these complaints are not universal, and many merchants are satisfied with Stripe and its services. However, considering using Stripe, it’s essential to consider these potential issues and weigh them against the platform’s benefits.
In conclusion, Stripe has become one of the leading payment processing companies in the world, offering a suite of payment APIs and other financial tools that make it easy for businesses to manage their operations and accept payments online. The company was founded in 2010 by brothers John and Patrick Collison, who saw an opportunity to make payment processing faster, more secure, and more accessible for businesses of all sizes.
Over the years, Stripe has grown to become one of the most valuable private companies funded in Silicon Valley, valued at $95 billion at its peak in 2021. However, that valuation has come down lately, given the large drawdowns in the stock markets worldwide over the past year, particularly for tech and payments companies. In fact, based on internal documents of Stripe, the company self-corrected its valuation figures internally early in 2023. Currently, the company is trying to raise capital at a valuation ranging between $55 and $60 billion dollars.
The company’s global reach, user-friendly platform, and commitment to innovation make it a popular choice for businesses that want to integrate online payments into their operations. Whether accepting payments online or managing recurring payments and subscriptions, Stripe offers a range of products and services to help businesses grow and succeed in today’s digital economy.
Over the years, Stripe has grown to become one of the most valuable private companies funded in Silicon Valley, valued at $95 billion at its peak in 2021. However, that valuation has come down lately, given the large drawdowns in the stock markets worldwide over the past year, particularly for tech and payments companies. In fact, based on internal documents of Stripe, the company self-corrected its valuation figures internally early in 2023. Currently, the company is trying to raise capital at a valuation ranging between $55 and $60 billion dollars.
The company’s global reach, user-friendly platform, and commitment to innovation make it a popular choice for businesses that want to integrate online payments into their operations. Whether accepting payments online or managing recurring payments and subscriptions, Stripe offers a range of products and services to help businesses grow and succeed in today’s digital economy.