As an online store owner, you’re constantly seeking ways to streamline your payment process and boost your bottom line. Enter Stripe, a powerhouse in payment processing that revolutioned the ease in which startups and sellers can build a business.

With robust features and user-friendly interface, Stripe is a go-to solution for entrepreneurs looking for simple payment operations.

In this guide, we’ll dive deep into the world of Stripe, exploring its key features, benefits, and potential drawbacks.

GET THE MOST OUT OF STRIPE

What is Stripe?

Stripe is a payment processing platform that makes how you, as an online store owner, handle transactions as simple as possible. Operating as a payment facilitator (payfac), Stripe eliminates the need for a traditional merchant account, allowing you to start accepting payments quickly and efficiently.

When you integrate Stripe into your online store, you gain access to a comprehensive suite of payment processing tools. These tools enable you to accept a wide range of payment methods, including credit and debit cards, digital wallets, and bank transfers.

Stripe’s versatility extends beyond simple transactions, offering solutions for subscription-based models, marketplace platforms, and even complex multi-party business structures.

As a full-stack payment processing platform, Stripe simplifies the entire payment journey for both you and your customers. It handles everything from the initial card information input to the final fund transfer, all while maintaining robust security measures to protect sensitive data.

KEEP PAYMENTS SIMPLE

How does Stripe work?

Here’s how Stripe works to process payments for your online store.

The Payment Journey

1. Your customer initiates the process by providing their payment information through your checkout page.
2. Stripe’s payment gateway encrypts this sensitive data, usually in the form of Stripe Tokens.
3. The encrypted data is then sent to the acquiring bank, with Stripe acting as the merchant on your behalf. This bypasses the need for you to set up a separate merchant account.
4. The transaction information travels through the appropriate credit card network (like Visa or Mastercard) to reach the customer’s issuing bank.
5. The issuing bank swiftly evaluates the transaction, checking for available funds and assessing any potential risks.
6. Within seconds, an approval or decline message is sent back through the same channels, ultimately reaching your customer.

Post-Transaction Process

After the initial authorization, Stripe continues to work for you:

1. Approved transactions are batched for settlement, typically at the end of each business day.
2. Stripe handles the settlement process, communicating with the various financial institutions to ensure funds are transferred correctly.
3. Finally, Stripe deposits the funds into your connected bank account, minus its processing fees.

As a payfac, Stripe bundles your transactions into other businesses transactions. Stripe is the merchant and you are borrowing its payment processing ability. This offers both pros and cons to how you can scale.

SCALE YOUR ONLINE STORE

What is Stripe Connect?

Stripe Connect is a tool that helps you handle complex payment scenarios in your online store. As a platform owner, you’ll find it invaluable for managing multi-party transactions, whether you’re running a marketplace, a subscription service, or any business model that involves splitting payments.

Key Features of Stripe Connect

1. Automated Onboarding and Verification: Stripe Connect streamlines the process of adding sellers or service providers to your platform. You can onboard new accounts in minutes, with Stripe handling the compliance and verification processes behind the scenes.
2. Flexible Payment Flows: You have full control over how funds are distributed. Whether you need to split payments between multiple parties, hold funds for a set period, or make instant payouts, Stripe Connect adapts to your specific needs.
3. Global Reach: Stripe Connect allows you to expand globally by handling currency conversion and international payouts, allowing you to pay sellers in their local currency.
4. Risk Management and Compliance: Stripe Connect takes care of regulatory requirements, including KYC (Know Your Customer) verifications, tax reporting, and fraud prevention. This reduces your compliance burden and helps protect your platform from potential risks.
5. Advanced Reporting Tools: Get full visibility into your payment infrastructure with Stripe Connect’s reporting capabilities. You can track payments, generate tax forms, and access detailed account statistics all from one dashboard.

EXPAND YOUR BUSINESS GLOBALLY

What is Stripe Checkout?

Stripe Checkout is a low-code payment integration that creates a customizable form for collecting payments, designed to streamline the checkout process.

Key Features of Stripe Checkout

Flexible Implementation Options

You have three ways to implement Stripe Checkout:

1. Stripe-hosted page: Redirect customers to a secure Stripe-hosted payment page.
2. Embedded form: Keep customers on your site with an embedded payment form.
3. Customized checkout: Create a checkout experience using Stripe Elements.

Built-in Functionality

Stripe Checkout comes with features to enhance your customers’ payment experience:

• Support for digital wallets and Link for faster checkouts
• Responsive mobile design
• Strong Customer Authentication (SCA) compliance
• Automatic card validation and error messaging
• International language support
• Adaptive pricing for global customers

Customization Options

Tailor the checkout experience to match your brand:

• Custom branding with your colors, buttons, and fonts
• Global payment method support
• Subscription upsells
• Custom success pages
• Abandoned cart recovery

Streamlined Customer Experience

Stripe Checkout is designed to reduce friction and increase conversions:

• One-click payments for returning customers
• Autofill capabilities with Link
• Support for over 40 local payment methods

Stripe Checkout tries to make it as easy as possible for you to get set up and start selling. There are risks to this method, but Stripe Checkout does have global reach and is intuitive.

STREAMLINE THE CHECKOUT EXPERIENCE

Which payment methods does Stripe accept?

Stripe offers a comprehensive range of payment methods that cater to most customers’ preferences. Here’s an overview of the payment methods Stripe accepts.

Credit and Debit Cards

Stripe supports major global and local card networks, including:

• Visa
• Mastercard
• American Express
• Discover
• Diners Club
• JCB
• China Union Pay
• Cartes Bancaires (in Europe)
• Interac (for in-person payments in Canada)

Digital Wallets

Stripe integrates with popular digital wallets, offering your customers a quick and secure checkout experience:

• Apple Pay
• Google Pay
• Cash App Pay
• Link by Stripe

Bank Debits and Transfers

For customers who prefer direct bank payments, Stripe supports various methods:

• ACH Direct Debit (US)
• SEPA Direct Debit (Europe)
• Bacs Direct Debit (UK)
• BECS Direct Debit (Australia)
• Pre-authorized debit payments (PADs) (Canada)

Buy Now, Pay Later Options

Stripe allows you to offer flexible payment options:

• Affirm
• Afterpay/Clearpay
• Klarna

Local Payment Methods

Stripe supports numerous country-specific payment methods:

• iDEAL (Netherlands)
• Bancontact (Belgium)
• EPS (Austria)
• Przelewy24 (Poland)
• Multibanco (Portugal)
• Boleto (Brazil)
• OXXO (Mexico)

The payment methods you offer at checkout say a lot about your business. Your aim shouldn’t be to offer every method on Earth, but the ones that your customers prefer. Every payment method you offer that your customers don’t need costs you money.

OFFER THE PAYMENT METHODS YOUR CUSTOMERS WANT

Which businesses does Stripe support?

For the health and longevity of your online store, you need to understand which types of businesses Stripe supports and which it doesn’t. This knowledge will help you determine if Stripe is the right payment facilitator for your enterprise.

Businesses Supported by Stripe

Stripe works with a narrow range of businesses, including:

• E-commerce stores (only for physical, in stock goods)
• Software as a Service (SaaS) companies (limited)
• Non-profit organizations
• Platforms connecting buyers and sellers (limited)
• Startups and small to medium-sized enterprises (only stores processing less than $20k/month)
• Global businesses expanding into new markets

Businesses Not Supported by Stripe

While Stripe is flexible, it maintains a Restricted Business List to comply with legal and financial regulations. Some businesses that Stripe typically doesn’t support include:

• Financial services offering investment and credit products
• Businesses selling nutraceuticals, CBD, and FDA-regulated products
• Adult content and services
• Gambling and betting services
• Multi-level marketing schemes
• Virtual currency or cryptocurrency businesses
• Digital products

DON’T LET STRIPE SHUT DOWN YOUR BUSINESS

Stripe Pros and Cons

If you want an exhaustive list of the pros and cons of using Stripe for your business, check here. Below is a more comprehensive look at Stripe.

Stripe Pros

• User-friendly interface suitable for startups and small enterprises
• Supports usage-based pricing models
• Accepts a wide variety of payment methods
• Enables global sales
• Offers flat-rate pricing for simplicity
• Provides robust security measures

Stripe Cons

• May not support all types of online businesses
• Flat-rate pricing can be more expensive compared to other options
• Highly risk-averse policies may lead to account closures
• Even a single chargeback could potentially shut down a business
• May not be suitable for businesses with complex B2B billing needs

CONNECT WITH A PROCESSOR THAT SUPPORTS YOUR BUSINESS