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Stripe

Stripe is the default choice for developer-led companies and online businesses. It has the best API, the most integrations, and the fastest time-to-market. But it's not always the cheapest or easiest.

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When to Use Stripe​

You should use Stripe if:

  • You have a developer on your team (or can hire one)
  • You're building a custom checkout experience
  • You need subscription billing with complex logic
  • You're selling globally or plan to expand internationally
  • You want to own your payment infrastructure long-term

Skip Stripe if:

  • You need a plug-and-play solution with no coding
  • You're primarily card-present retail (Square is better)
  • You can't afford a developer for integration
  • You need phone support for every issue (Stripe is mostly email/docs)

Pricing Breakdown​

Standard Pricing (Pay-As-You-Go)​

Transaction TypeRateNotes
Card-not-present2.9% + $0.30Online, mobile, recurring
Card-present2.7% + $0.05In-person with Stripe Terminal
International cards+1.5%On top of base rate
Currency conversion+1%For non-USD transactions
Disputes$15Win or lose (refunded if you win)

Volume Pricing​

Stripe offers custom pricing for businesses over $1M/month in volume:

  • Typical discount: 0.1-0.3% off standard rates
  • Negotiation threshold: $5M+/month for significant discounts
  • You need to ask - they won't offer proactively

Hidden Costs​

FeeAmountWhen It Applies
Radar for Fraud Teams$0.05/screened transactionAdvanced fraud rules (optional)
Radar for Fraud Teams (standard)$0Basic fraud detection (included)
Billing$0Subscription/invoicing (included)
Instant payouts1.5% (max $10)Same-day deposits
Account updater$0.10/updated cardAutomatic card updates

Effective rate for most SMBs: 2.9-3.2% all-in for CNP transactions.

What Stripe Does Well​

1. Developer Experience​

Stripe's API is the industry gold standard:

  • Excellent documentation with live examples
  • SDKs for every major language (Python, Node, Ruby, PHP, Go, Java)
  • Webhook reliability
  • Transparent error messages

Reality: If you have a technical team, you'll ship faster with Stripe than anyone else.

2. Subscription Billing​

Stripe Billing handles complex subscription logic:

  • Proration, metered billing, usage-based pricing
  • Dunning (smart payment retry logic)
  • Customer portal for self-service
  • Trial management

Best for: SaaS, subscription boxes, membership sites, usage-based businesses.

3. International Expansion​

Stripe supports 135+ currencies and 45+ countries:

  • Local payment methods (iDEAL, Bancontact, SEPA, etc.)
  • Multi-currency pricing
  • Tax calculation (Stripe Tax)
  • Compliance (SCA, PSD2)

Best for: Companies selling globally or planning international expansion.

4. Ecosystem Integration​

Stripe integrates with everything:

  • Shopify, WooCommerce, Salesforce, QuickBooks
  • No-code tools: Webflow, Bubble, Zapier
  • Every major e-commerce platform

What Stripe Does Poorly​

1. Customer Support​

The problem: Stripe support is primarily email and documentation. Phone support exists but is slow to reach.

Reality check:

  • Under $1M/month: Email support with 24-48 hour response times
  • Over $1M/month: Dedicated account manager (maybe)
  • Urgent issues: You're reading docs and community forums

Workaround: Stripe's documentation is excellent. Most questions are answered there. But if you need hand-holding, this is painful.

2. Account Holds and Reserves​

Stripe is aggressive about risk management:

  • New accounts: 25% rolling reserve is common
  • Sudden volume spikes: Instant holds
  • High-risk industries: Reserves up to 30%+

Common trigger: Going from $10K/month to $100K/month in one month = automatic review and potential hold.

What to do: Communicate with Stripe before big launches. Provide documentation proactively.

3. Card-Present (In-Person) Limitations​

Stripe Terminal works but is inferior to Square for retail:

  • Fewer hardware options (Square has more readers)
  • Higher per-transaction fees than Square for CP
  • Less mature POS features

Reality: If you're primarily brick-and-mortar retail, Square is better.

4. Surprise Terminations​

Stripe can terminate your account with minimal warning:

  • High chargeback ratios (>0.75% = warning)
  • Restricted business categories (CBD, adult, etc.)
  • Terms of service violations (even accidental)

They don't negotiate much. If terminated, your money is held for 90-180 days.

Pricing Comparison (Stripe vs Competitors)​

ProcessorCNP RateCP RateSetup FeeMonthly Fee
Stripe2.9% + $0.302.7% + $0.05$0$0
Square2.9% + $0.302.6% + $0.10$0$0
PayPal3.49% + $0.492.7% + $0$0$0
AdyenNegotiated (~2.5%)Negotiated$0$0

Verdict: Stripe pricing is competitive but not the cheapest. Square beats them for card-present. PayPal is more expensive for CNP.

Who Stripe Is Best For​

Perfect Fit​

Business TypeWhy Stripe Wins
SaaS companiesBest subscription billing, developer-friendly
MarketplacesStripe Connect for split payments
High-growth startupsScales from $0 to $100M+
Global businessesMulti-currency, local payment methods
Custom checkoutsFlexible API, Stripe Elements

Poor Fit​

Business TypeBetter Alternative
Retail storesSquare (better hardware, POS features)
Non-technical foundersPayPal, Square (easier setup)
High-risk businessesSpecialized high-risk processors
Ultra price-sensitiveTraditional processors (negotiate rates)

Common Gotchas​

1. The "It Just Works" Myth​

Stripe requires development work. Budget for:

  • Initial integration: 20-80 hours (depending on complexity)
  • Ongoing maintenance: 5-10 hours/month
  • Testing and compliance: 10-20 hours

Reality: Stripe is developer-friendly, not non-technical-founder-friendly.

2. Chargeback Surprise​

Stripe's chargeback threshold is 0.65% for early warning. At 0.75%, expect aggressive intervention.

What happens: Reserves, holds, or termination. Monitor your ratio weekly.

3. International Card Fees​

The +1.5% international card fee adds up:

  • 10% international customers = ~0.15% to your effective rate
  • 50% international customers = ~0.75% to your effective rate

Calculate this before committing.

4. Instant Payout Costs​

1.5% for instant payouts sounds convenient but is expensive:

  • $10K instant payout = $150 fee
  • $100K instant payout = $1,500 fee (capped at $10 per payout, so actually $10)

Wait the 2 days for standard payouts unless you have a cash emergency.

Test to Run​

Stripe integration audit (if you're already on Stripe):

Week 1:

  1. Pull your last 3 months of Stripe fees
  2. Calculate your effective rate: total fees / total volume
  3. Compare to 2.9% + $0.30. Are you paying more than expected?

Week 2: 4. Check your dispute rate in Stripe dashboard 5. If over 0.5%, investigate root causes (see Chargeback Prevention)

Week 3: 6. Review your payment retry logic (if you have subscriptions) 7. Are you using Stripe's smart retries? (Billing → Settings → Smart Retries)

Success criteria: Effective rate under 3.2%, dispute rate under 0.5%, retries enabled.

Scale Callouts​

Under $100K/month:

  • Stripe's standard pricing is competitive
  • Support is slower but documentation is good
  • Focus on integration quality over price negotiation

$100K-$1M/month:

  • Start tracking effective rate monthly
  • Consider asking for volume pricing (small discounts possible)
  • Implement Stripe Radar for fraud if you're not already

Over $1M/month:

  • Negotiate custom pricing (0.1-0.3% discount achievable)
  • Request a dedicated account manager
  • Consider multi-processor strategy (don't put all volume on one processor)

Over $10M/month:

  • Negotiate aggressively or consider traditional processors
  • Adyen may offer better pricing at this scale
  • Build direct acquirer relationships for leverage

Where This Breaks​

  1. Restricted businesses: If you sell anything adjacent to CBD, adult, gambling, or other high-risk categories, Stripe will reject you or terminate without warning. Check their restricted businesses list.

  2. No phone for emergencies: If your account is held and you need money TODAY, Stripe can't help. Email support takes 24-48 hours minimum.

  3. Subscription complexity ceiling: Stripe Billing handles 95% of subscription use cases. The remaining 5% (complex seat-based pricing, weird proration rules) require custom code.

  4. Card-present at scale: If you're doing $1M+/month in card-present volume, Square or a traditional processor will offer better rates.

Next Steps​

Considering Stripe?

  1. Read Stripe's documentation to gauge complexity
  2. Compare to Square if you're card-present
  3. Review Buying Payments for processor selection framework

Already on Stripe?

  1. Run the test above to audit your integration
  2. Check Auth Optimization to improve approval rates
  3. Set up Chargeback Alerts if ratio > 0.5%

Switching from Stripe?

  1. Read Processor Switch Checklist
  2. Consider PayPal or Adyen
  3. Don't switch for pricing alone - switching costs are high

See Also​