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In this Stripe gateway overview, we’ll take a look at features and costs to help you make that decision for your business. Curious how Stripe compares to Braintree? Check out our detailed article Braintree vs. Stripe.
Stripe is both a payment processing company and a gateway product. Gateways are essentially the “credit card machines” of the internet; they’re what your customers “run” their cards through to make a purchase. If you sell online and take payments by credit card, you need a payment gateway. You also need a payment processor. In some cases, like with Stripe, you can get a gateway and payment processing through the same company. However, you may pay more to do so. It isn’t possible to use the Stripe gateway separatey, with another processor.
Stripe allows for online payment processing for a lot of business types, including marketplaces that connect sellers and buyers. Stripe does not offer in-person payment itself, though it recommends Shopify (powered by Stripe) for taking cards in person.
Stripe provides you with the ability to complete many tasks related to payments and billing, including accepting payments, storing card information, and processing subscriptions. You can accept major credit and debit cards, including MasterCard, Visa, American Express, Discover, and more. Additionally, you can offer coupons and run promotions.
Hosted Payment Page (aka Stripe Checkout)
While Stripe is known as a system for developers, it does offer a hosted payment option, called Checkout, if you prefer to the simplicity of implementing an existing pay page solution. Checkout can be embedded into existing websites, allowing customers to enter payment information in your site without being redirected to a different payment page.
If you sell goods or services on a recurring schedule, such as subscription services or product-of-the-month clubs, Stripe offers the ability to set up recurring billing. Customizable billing periods allow you to charge customers at weekly, monthly, or yearly time periods, or set custom billing intervals. You can set up "plans" and assign customers to a plan. Once the plan information (such as payment frequency) is set, simply add customers to the plan and Stripe automatically bills according to the plan. If a customer alters their subscription, Stripe automatically calculates the necessary extra payment or refund due. Stripe also works directly with credit card companies to ensure payments aren’t declined due to expired cards or other avoidable problems.
Stripe allows businesses to accept payments from a variety of countries, including the United States, Canada, Australia, and many European countries. Stripe manages conversions automatically so that your customers can pay in their own currency when completing a transaction. Currently Stripe supports more than 100 currencies.
Stripe offers at least one feature not commonly found with other processors: the ability to accept marketplace or multi-party payments. Marketplace payments refers to the type of payments taken by businesses that facilitate transactions between a seller and a buyer where the seller is not the business itself: Think Ebay or Etsy. In those situations, a customer is making a purchase through the company, but not from the company. Instead, the customer purchases from an Ebay or Etsy seller. Marketplace payments also apply to business models like Kickstarter and other donation sites, where the customer is donating to an individual user through the company, but not donating to the company.
Not all processing companies support this type of specialized payment method, so if that’s what you need, it may be worth considering Stripe.
Stripe provides PCI compliant client libraries and processes customer data without storing information on your servers. Stripe is PCI Level 1 compliant and offers two-factor authentication for added merchant security. Additionally, Stripe uses AES-256 encryption for card numbers and stores decryption keys on a separate server. Stripe also monitors suspicious transactions, watching for red flags to help protect your business and your customers.
For business management, you can take advantage of Stripe’s range of available real-time report options, including monthly summaries, balance histories, customer account data, and individual transactions. Stripe also allows for custom report options through the API. Report information can be filtered, saved, or exported to various programs like Excel or integrated with QuickBooks.
Stripe is known as a developer-friendly platform and offers robust APIs and developer support. Stripe works with a variety of languages, including Perl, Python, Ruby, Java, PHP, and more. A full API reference library provides documentation.
Stripe does not support some of the common optional peripherals, such as point-of-sale swipers to avoid hand keying transactions. Stripe is recommended for businesses who are using the gateway for accepting payments through a website.
Stripe’s gateway services come with credit card processing at 2.9% + $0.30 per transaction for credit and debit card payments. ACH and bitcoin payments cost 0.8%, or $5 per transaction, whichever is lower. The company claims no setup fees or monthly fees, but does charge $4 per failed ACH transaction. Additional per-occurrence charges, such as for disputed payments, may also apply.
Stripe may offer lower pricing to larger businesses or non-profit organizations.
Stripe was designed specifically for developers, so the documentation is great. The only downside is that the gateway can't be used with other processors. You have to go through Stripe payments.