Small to mid-sized businesses have several options for processing payments today. However, not all are created equal. Some payment processors make accepting credit cards and other forms of payment easier through POS systems. Others are more focused on assisting online and e-commerce companies. Recognizing how different payment processors function based on their business niches is helpful in selecting the one that makes the most sense for a company.

In this review, we breakdown Stripe, a third-party payment processing platform well-known for its developer-friendly features, a transparent cost structure for merchants, and robust integration capabilities.

First, Some Background on Stripe

Headquartered in San Francisco, Stripe dates back to 2010. Since that time, the company has grown to serve hundreds of thousands of businesses that operate predominately online. Some of Stripe's current customers include enterprises such as Under Armour, Pinterest, TaskRabbit, and Lyft. Stripe processes billions of dollars of payments, all based on its innovative and easy-to-use payment processing technology.

Companies utilize Stripe processing for services offered online or online marketplace services. E-commerce business or crowdfunding platforms also use the technology. The company’s payment processing revolves around powerful functionality allowing nearly any online business to sign-up and start using the service in a matter of minutes.

Stripe Features

Stripe’s offerings for online businesses are broken down into two broad categories: payment processing and developer tools.

Under payment processing services offered, Stripe is a third-party service allowing companies to accept credit card payments through online platforms. Most payment types are accepted, including all major credit card issuers, several foreign credit card networks, and mobile wallets such as Google and Apple Pay. Stripe also processes more than 100 foreign currencies and converts them for the business at no extra charge. Companies using Stripe utilize payment processing services through an embeddable checkout, in-person payments, custom payment forms, and invoicing.

In addition to payment processing, Stripe is most well-known for its developer-friendly tools and features. Specifically for e-commerce companies, Stripe offers APIs that provide the necessary framework for businesses to easily integrate the payment platform into their current online system. Stripe provides the few simple lines of code required for adding payment processing services to an e-commerce site. This allows businesses functionality in a few moments.

Stripe customers also access payments quickly, typically on a rolling two-business-day basis, regardless of the type of payments accepted. Fraud protection is also available through Radar. PCI compliance is included at no extra cost. Businesses that use Stripe also have full access to developer tools at any time, along with a robust dashboard that provides real-time information on payments, refunds, and other money movement. Customers have 24/7 support via phone, e-mail, and a live chat option should they need it. A dedicated portal for frequently asked questions regarding the platform is always available as well.

Fees for Small Businesses

Unlike other payment processors, Stripe does not charge a monthly user fee or ongoing maintenance charges. Instead, the company provides access to all its features and benefits with a pay-as-you-go structure. The cost for Stripe is 2.9% +$0.30 per card charge. This cost may be less than other third-party payment processors that charge a similar amount but add on additional set-up or use fees. For larger e-commerce or online businesses, Stripe provides a custom package that includes volume discounts. This is only available for companies processing more than $80,000 in monthly sales.

Stripe also charges for ACH transfer payments, at 0.8% per transaction, capped at $5. After a customer reaches $1 million in payments, a fee of 0.4% occurs on recurring payments through Stripe Billing. Chargebacks cost $15, although refunded if the bank determines it was the chargeback was not founded.

Things to Consider

Stripe is best suited for online businesses that need a transparent, easy-to-use third-party payment processor to help manage customer payments. However, a handful of considerations should be taken into account before choosing Stripe as the right solution. First, many customers of Stripe complain that the company has full control over payments received.

Even though the rolling two-business-day payment is in place, Stripe may withhold payment to customers if high-risk activities seem to be taking place. Stripe dictates what may be considered high-risk, and it often provides little to no information about delayed or withheld payments. A business can be taken off a Stripe account with no warning, effectively halting payments coming in or going out.

Additionally, businesses should note Stripe payment processing does not include PayPal. For companies accepting this form of payment for customers, Stripe isn’t a viable option. Also, businesses receiving a substantial amount of payments each month may be better off using a different payment processor due to cost and volume discounts available. Stripe provides the most customized services at a manageable cost to small and mid-sized companies with less than $80,000 in monthly sales.

Overall, Stripe payment processing is a developer’s dream, with its enhanced benefits, innovative tools, and easy-to-use payment processing for e-commerce businesses. As with any significant technology used within a company’s framework, however, shopping around for the right payment processor before signing up for a specific product or service is a must.