Stripe Payments Review
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There’s a kind of special allure to companies like Stripe. They’re media darlings, led by entrepreneurs who want to change the way we do business and have impressive client lists to show off. Stripe, in particular, has been extremely popular, securing round after round of VC funding and the backing of investors like Elon Musk and Peter Thiel — co-founders of rival company PayPal. But does the reality live up to the hype?
Stripe is a third-party payments processor built around a simple idea: make it easy for companies to do business online. It’s not just about processing credit cards (that’s boring to most people). Stripe primarily targets developers with a suite of tools that make it nearly effortless to handle everything from in-app payments to marketplace transactions. Its feature list is impressive, if a tad overwhelming for the uninitiated.
There’s a lot to love about Stripe; that’s for sure. It’s powerful, easy to use, and chock-full of features…but it’s not for everyone.
Many of Stripe’s features are tailored to larger enterprises. Stripe has powerful tools for marketplaces and developers, as well as large eCommerce enterprises and global businesses. There’s no denying that. And Checkout is a great hosted payment page for any merchant. But if you’re not going to use everything Stripe has to offer, or if you don’t have strong dev skills or a developer on your team, it’s hard to recommend it over other options. It does not seem like Stripe is really a good option for small merchants who want to do it themselves or need a simple solution just to get up and running.
Furthermore, as a third-party processor, Stripe isn’t immune to the same sort of problems that plague PayPal, Square, and other payment processors that aggregate rather than opening individual merchant accounts: common account holds and terminations and spotty customer service.
Here’s the thing, though. I feel that Stripe wants to get better, and it has improved. The volume of complaints is leveling out and Stripe is taking measures to improve. It’s not outshining the competition, but it is on par with the others. For that reason, Stripe earns 4 stars. If it could improve its quality of customer service and work on that holds issue, we’d consider bumping it up beyond that.
This is my recommendation: If you really plan to use all of the cool features Stripe has to offer, it’s worth putting on your shortlist (which, by the way, should also include Braintree). If you are a low-volume user (under about $10K per month), the no-monthly-fee setup at Stripe is in your favor…but there are still other options to accept payments online, for both developers and non-developers.
For higher-volume users who don’t necessarily need all of the bells and whistles the Stripe offers, but still require a developer-friendly option, consider PayJunction. It offers interchange-plus and the developer support is pretty solid. The feature-set isn’t exactly what Stripe has, but it’s versatile.
If you are a low-volume user who only needs some of the basic dev functions, or if you want a seamless way to accept payments online and in-person, you might want to look at Square, which ticks all of those boxes, or PayPal, which is far more user friendly but also offers a solid array of dev tools.
If you are a nonprofit wanting to accept donations online, I encourage you to consider PayPal or one of the merchant accounts that offer discounted rates for charities.
Check out the full review for more information, and let me know what you think in the comments section.
Products & Services:
Stripe’s basic offerings are deceptively simple, but underneath you’ll find tools you probably didn’t even realize existed. Everything is broken down into two categories:
- Payment processing: Stripe gives you instant access to processing, much like Square or PayPal does. Stripe’s processing services are available in 25 countries at the time of writing this (including beta tests), but it accepts more than 100 types of currency.
- Developer tools: This is the part of Stripe that most users really sink their teeth into. These APIs (application programming interfaces) provide an incredibly solid and well-considered framework for developers to quickly and easily integrate the Stripe payment platform using a variety of languages (curl, Ruby, Python, PHP, Java, Node, etc.). It’s a solid foundation to build on and expand your business, and Stripe updates its features and the documentation constantly.
Here’s a quick rundown of some features Stripe has set up for you or your developer to work with:
- Stripe Checkout: Checkout saves you from having to design forms and payment flows from scratch, but also allows for a high level of customization. Unlike a basic PayPal account, your customers stay on your page the entire time, and unlike the PayPal Pro account (which gives you the hosted page), all PCI compliance is handled for you. (Note: Square also gives you a hosted payment page at no extra charge and handles PCI compliance.)
- Mobile commerce integration: Stripe provides documentation for Android or iOS to power in-app payments. There’s also a one-touch solution that enables users to save their data for faster purchases next time.
- Marketplace solutions: Stripe is continually expanding its offerings, which shows that it clearly is invested in helping this niche thrive. There are a huge array of tools to help you route your payments to your merchants, and you can even offer them instant deposits.
- Platform building tools: Marketplace solutions fit under this, but you’re not limited to that. Basically, you can build any platform where you need your users to get paid. Lyft uses Stripe, as does IndieGoGo.
- Subscription solutions: This includes unlimited options for plan types.You can even subscribe single users to multiple plan types. Upgrading subscribers to higher tiers is easy. This is another feature that actually works in favor of everyday merchants, and it’s provided at no charge for merchants (compared to $10/month for PayPal).
- Coupons and free trials: Stripe provides great marketing tools, made easy. Entice would-be customers to take the plunge by setting up a free trial period or providing a special offer.
- Teams: Create teams for your employees and assign permission levels to them, which keeps your data secure.
- Stripe Connect: Connect is a suite of tools designed specifically for marketplaces. Stripe supports more than 100 currencies and automatically converts them. You can also use Connect to verify international sellers, add descriptor text that appears on credit card statements, and automate payments for marketplace sellers or create a custom payment schedule.
- Stripe Atlas: Atlas allows international businesses to incorporate in the U.S., set up a U.S. bank account, and get tax and legal guidance. Stripe says it has had more than 400 startups apply in more than 90 countries, and it has added more than 100 partners to the network since the launch.
- Stripe Radar: Radar is Stripe’s solution to eCommerce fraud. (Fun fact: there’s a lot of online card fraud already, and likely to be even more as EMV comes into prominence.) So this is actually worth pausing and taking note of. Radar uses machine learning to better identify and stop credit card fraud. It also gives merchants tools in their dashboard to allow them to set specific rules for transactions, test what impact those rules will have based on previous data, and reduce the amount of manual work your team has to do.
- Bitcoin integration: Pay just 0.8% per transaction, up to a maximum of $5.
- ACH payments: ACH, or eCheck payments, aren’t necessary for everyone, but they can be useful to some industries. Stripe’s ACH payment feature includes two options for account verification: microdeposits or Plaid. Both are built right into Stripe for a seamless interface. Like Bitcoin, you’ll pay 0.8% per transaction up to $5.
- Stripe Relay: Relay is geared toward contextual commerce. It’s a way for you to power purchases in mobile apps. Relay’s features allow merchants to link their eCommerce catalogs with your app or directly upload product information. Relay creates in-app buy buttons and forwards all the sales information to the merchants to fulfill the order. I am very curious to see how Relay evolves in comparison to PayPal Commerce offering, which seems more accessible to your typical merchant (for example, it has the ability to integrate buy buttons directly into blog posts and emails). However, PayPal Commerce is still in beta mode, whereas Relay has had a full-scale rollout.
More About Stripe’s Features
If you want to take advantage of Stripe’s payment processing without getting involved with the developer tools, consider using a Stripe third-party plugin for WordPress, Magento or Drupal. You can also take advantage of the dozens of services that allow for simple Stripe integration for e-commerce, invoicing, form building, analytics, and so on. Some integrating providers include BigCommerce, Shopify, Squarespace, Big Cartel, Stitch, Harvest, Weebly, and a ton of others.
Something that’s also worth mentioning is security. Stripe is a PCI Level 1-compliant service, which is the highest level of certification. In addition, if you decide to leave Stripe, they will help you export all of your card data to a new PCI compliant provider. That’s actually a pretty awesome deal (but one that Braintree also offers).
You can accept orders over the phone with Stripe, but it is on you to protect your customers’ card data, so Stripe recommends using an invoicing service as an alternative. You also can’t use this as your primary means of payment processing either — Stripe is not meant to be used as a virtual terminal. It’s more of a last-ditch effort.
And then there’s the other thing, which you’ll see if you take a look at the list of integrations Stripe supports:
Stripe doesn’t natively support mobile payments or any sort of in-person payments, something I think is a failing on the company’s part. (Everyone else seems to be realizing the benefits of omnichannel commerce.) But Stripe will let other developers use its API to create mobile payment apps.
You can check out the list of Stripe integrations for yourself if you’d like. Some of them are dependent upon the consumer using the app. A few are going to charge you, the merchant, extra for using their services — which will put rates well above what you’d pay from a standard mPOS app. Others are free. You’ll have to investigate and decide which one, if any of them, suit your needs.
It’s also worth mentioning that Stripe is expensive for Card Present mPOS transactions. So even though you can….the question remains, whether you should use it to power your mPOS app. We’ll get to that in the Fees & Rates section, though.
What’s New at Stripe
Looking around, it doesn’t seem like Stripe has added all that much in terms of features since our last look. The only noteworthy new feature is Sigma — but it’s a doozy.
Sigma is business reporting. But it’s not just telling Stripe to generate a list of reports based on the available options — it’s customizable SQL queries. SQL is programming language specifically for database management. With Sigma, if you can write the SQL query, Stripe will give you the report. In other words, you can get all sorts of business intelligence without having to manually comb through the data yourself. For large, growing, or very data-driven enterprises, this is possibly a game changer.
And of course, Stripe still has a fairly comprehensive array of preset reports that you can download. This is your standard analytics. Sales, fees, etc., but it’s what you should expect from any fairly tech-savvy processing company.
That really is Stripe in a nutshell. If you’re wondering, “Do I really need all that?” the answer is probably no. Stripe is definitely more friendly to large businesses, SaaS platforms and marketplaces. If you’re just trying to run an eCommerce business, you might want to look at one of Stripe’s processing partners (Shopify, Squarespace) and get set up through them.
If you don’t have a developer on the team, you’re really not going to be able to get the most out of Stripe anyway. It’s powerful, but it’s not a solution that works for anyone or everyone.
Stripe Fees & Rates:
One of the nicest things about pay-as-you-go processors is that they generally have a pretty clear pricing structure. For each credit card transaction, Stripe charges just a single flat rate:
- 2.9% + $0.30
Stripe also supports ACH (direct deposit) and Bitcoin transactions. You’ll pay just 0.8% per each transaction, up to a maximum of $5.
That’s it. If you’re processing over $80,000 per month or more than 10,000 transactions per year, you might qualify for a lower rate on card transactions. Aside from that, don’t bother trying to negotiate. It’s a take-it-or-leave-it type of deal.
Use of all that Stripe has to offer (gateway, developer tools, etc.) is included here. Interestingly, this means customers that process lower volumes will actually get a better deal, since all costs are built into the transaction fees.
These costs are generally fair and absolutely competitive in the industry, given the complete lack of additional fees and the plethora of features available. Plus, 2.9% + $0.30 is exactly what Square, PayPal, and Braintree charge for online transactions, too.
However, you can get better rates for other types of transactions if you Stripe for collecting donations, selling digital goods, or even hooking up to an mPOS. PayPal accommodates all three with different plans:
- Nonprofit discount: 2.2% + $0.30
- Micropayments plan: 5% + $0.05
- mPOS swipe/dip rates: 2.7%
That’s not counting the interchange-plus plans you can get, or the nonprofit discounts that merchant account providers offer. So if you are focused primarily on cost, Stripe is competitively priced, but it’s not the most affordable option.
If you need an mPOS that processes through Stripe, I recommend looking at Shopify. For $9/month, you can get the Lite plan with invoicing, buy buttons, and an mPOS that charges 2.7% per swipe.
Stripe charges the industry-standard chargeback fee of $15. I like that it will refund this fee if the chargeback is decided in your favor. Not all processors do this, and it’s really fairly generous considering that they have to pay to do the paperwork one way or the other. However, customer reviews of Stripe suggest that very rarely, if ever, will you have a chargeback decided in your favor.
Stripe now offers two-day payouts to most US-based merchants, except those it deems “high risk.” This is a vast improvement of their former seven-day rolling payouts. Most international merchants are still stuck with the seven-day system for now, though.
Contract Length & Early Termination Fee:
No early termination fee. Period. Thumbs up. That’s what we like to see here. And remember we said Stripe will help you export your customer data and take it with you if you ever decide to leave.
However, I can’t stress this enough: Just like you’d read a contract for a merchant account, read Stripe’s terms of service before you sign up. Like any other third-party processor, Stripe does include a provision that it can terminate your account or implement a hold if it deems your business an unacceptable risk (or for pretty much any other reason, or no reason at all). if you prize stability over anything else in a processor, Stripe isn’t a good choice for you. But if you’re looking for flexibility and no monthly fees, or a scalable platform to build your business on, Stripe is definitely a good choice.
Sales & Advertising Transparency:
Stripe uses transparent, ethical, fair advertising, with none of the common problems seen from big companies. Stripe has no hidden fees, no unusual contract terms, and no scams or gimmicks to speak of.
If you’ve processed cards before, you shouldn’t be met with any surprises from Stripe as far as financial operations go. If you haven’t, then there might be a slight learning curve. But Stripe is a good company to learn with (financially speaking) since the service is entirely pay-as-you-go.
Customer Service & Technical Support:
The good news: Stripe has email-based customer service and support, alongside a number of public social media outlets. You can follow the company on Facebook, Twitter, and LinkedIn, and get updates on Stripe services via Twitter. However, posts to their social media and blog are infrequent, and I think there might be some missed opportunity there. For a company that’s all about the digital revolution, I kind of expected more.
I like that you can still reach out to support with questions without having to log into a Stripe account. A lot of companies will require you to sign up and sign in first, but if you’re still shopping around and just want to get a question answered, Stripe will do that for you. There’s a passable knowledge base, but honestly, when I start digging into Stripe for more information, I usually head over to the developer documentation, which will give you a much more detailed look at what is even possible
Something else cool that Stripe offers is status reporting. Head over to status.stripe.com to find out about service uptimes.
Now for the bad news: You can’t get Stripe on the phone. A lot of merchants have complained about generic customer support responses and an overall lack of personal attention given to problems. In some ways, this reminds me of Square’s customer service, especially in the early days (not a good thing). I get that phone support is difficult and an expensive investment, but when merchants can’t accept payments, they need a solution (or at least an answer) right away. Email just doesn’t cut it. We’ve seen this same argument with Square, which also gave in and added phone support, eventually.
On the plus side, Stripe has pretty effective Freenode-based chat support (#stripe). There you’ll find both Stripe reps and other users to give you instant advice and solutions. It’s a good starting place, at least, and offers a somewhat public channel for you to voice your concerns or troubles.
Still waiting on that phone support, though.
Negative Reviews & Complaints:
At the time of writing this review, Stripe’s BBB page still has an A+ rating with 393 complaints closed in 3 years, 92 of them in the last 12 months. That’s pretty steady since our last check-in (down just barely from 396 in 3 years and 100 in the last 12 months). That makes me happy. Two years ago, Stripe saw a very sudden rise in complaints, which I am guessing was a result of growing pains. It appears that the complaint volume has leveled out significantly
It’s hard to compare complaint volume directly to PayPal, where many of the complaints are from customers on eBay attacking merchants or those who have an issue with PayPal’s P2P payments. But Stripe is still quite a bit below Square’s complaint rate — which currently has 1464 complaints in the past 3 years.
The other thing to consider is we don’t actually know how large Stripe is in terms of merchants: the company doesn’t disclose its numbers and support for Lyft, Shopify, Kickstarter, and other mass platforms can make accuracy a bit complicated. There’s a page on the Stripe site that says, “You’re in good company. Join 100,000+ businesses on Stripe.”
Stripe also has 40 reviews on the BBB page, only one of which is positive. That is disappointing, but not exactly surprising. You can find other positive reviews elsewhere on the web, but that’s another section. We’re looking specifically for the bad stuff right now.
Ripoff Report shows 47 reports and most pertain to account holds or terminations. That’s also not exactly surprising, but that’s only one more than our last check-in. So again — the complaint volume is leveling out.
These complaints come up most often in reviewing the chatter:
- Account holds and terminations: By and large, the most common complaint against Stripe is sudden account terminations and sweeping payment reversals without notice and with little explanation. Merchants also comment about sudden holds on their funds while their account is “under review.” This kind of thing happens all the time with “instant access” payment providers. While they give you instant access to payment processing, they can (and absolutely will) review your account and processing habits soon after you begin to use the service. At this point, they can cancel your account for any number of reasons, real or perceived. Quite a few people have complained about Stripe refusing to release funds and not being able to get any sort of answer from customer support.
- Unresponsive customer service: This seems to come up less with everyday problems, and more when a serious and difficult issue comes up (like funds being held or accounts being canceled). More than one user has complained about being ignored in these situations, or it taking days, or weeks, to get a response. Twitter seems active and the support reps are helpful.
- Chargebacks: Let me start by saying that a chargeback is not Stripe’s fault. The company deals with Internet businesses, many of which offer higher-risk products (electronic delivery, subscription-based products, international sales, etc.), so chargebacks are going to happen. When a chargeback occurs, Stripe becomes responsible for giving the money back to the customer. Because of this, it will take the money from you to cover the cost, at least until the investigation has closed. Stripe didn’t invent the way the industry handles this issue, and in many ways, it simply has no control over these protocols. It also merits mentioning that Stripe doesn’t offer any sort of assistance in fighting chargebacks beyond its documentation tools — but then again, only a select few processors get hands-on in the process.
- Not User-Friendly: Stripe is not a payment processing option for the layperson or the DIYer — not unless you’ve got coding experience. Plenty of users complain about the ease of use (or, perhaps more accurately, the lack thereof). Remember: Stripe was built with developers in mind first and foremost. If you need something that you can just plug and play, this is not the option for you. Instead, I highly recommend checking out PayPal or Square.
- Lack of fraud protection: This issue ties into the matter of chargebacks, but is also worth discussing in its own right. Merchants don’t seem to feel like Stripe gives them any way to protect against fraudulent charges and chargebacks. That’s not to say there aren’t any tools that merchants can enable — there are several. But merchants feel that the system is somehow broken, which I completely understand.
This is not something to take lightly, and so I really dug into it. This is what I found: Stripe has an automatic algorithm that works to identify fraudulent transactions and flags them. There is not a lot of information out there about how it works. We do know the system can generate false positives, so if you find a declined transaction that you know to be legitimate, you can override it and try the transaction again.
You can also mark transactions as fraudulent and refund them yourself (make sure you report them to Stripe.) Second, you can enable CVC and AVS (address) checks and automatically decline transactions that fail them (these are two separate things). That second part is important because a transaction can still go through even if the checks fail. However, at the same time, it is not uncommon for legitimate shoppers to get their own zip codes wrong.
If you’re curious, you can check out a few case studies about Stripe’s fraud prevention here.
In the meantime, do your homework: Check that you have any relevant security measures enabled. And if you notice a change relating to Stripe’s fraud protections, let us know!
Positive Reviews & Testimonials:
Stripe has an expansive and impressive list of successful clients, including Foursquare, Squarespace, Shopify, Grooveshark, Evite, Reddit, Mashable, Volusion, eHow, Hubspot, and Dribble, for starters. Stripe also powers Kickstarter and its rival crowdfunding platform, IndieGoGo. We’re talking about some major Internet players, which comes as high praise in my book — even though no specific praise is given besides their continued business.
While Stripe doesn’t go as far as Braintree does with intensive case studies, it does at least offer a nice page of logos for you to browse and some shiny marketing copy. Check it out. Aside from that, I would love to see some case studies about features beyond fraud prevention, and maybe some more proof from some small and medium-sized businesses, not just the giants of commerce.
From the user reviews I have seen, merchants seem to love the freedom that Stripe offers. Those that have developer teams say it’s also very easy to use and flexible enough to accommodate their needs. Most think the pricing and value is pretty fair for what you get (the developer tools are included at no charge, after all). While I do see some comments that the customer support is good, it’s not an overwhelming number — certainly not more than the complaints about non-responsive or unhelpful service.
Please leave us a comment if you have first-hand experience with Stripe. Make sure to review our comment policy before posting to ensure we’re able to publish your remarks.
Without any doubt, Stripe is a major contender in the new, simplified, stylized online payments industry. Stripe, Braintree, and probably others I haven’t discovered yet are all vying for the top spot, each offering subtly distinct services, but all charging almost the exact same rates and operating on similar business models. PayPal and Square figure in there some way too, especially as they move more and more into the realm of omni-channel commerce, not just mPOS or eCommerce.
In theory, Stripe delivers everything that small and large merchants alike should want. However, it fails in some elements of its execution, particularly in regard to the stability of its clients’ accounts and overall customer service. Unfortunately, that’s not exactly a unique failing among payment aggregators, either.
Second, many tools seem targeted especially at developers, large businesses, and marketplaces. It’s all well and good that Stripe offers them. They’re important. If you’re tech-savvy, or you have someone to handle the code for you, you’ll go far with Stripe. But if all you want is an easy way to take payments on your website, I don’t see a clear advantage of using Stripe over one of the other options. In fact, Stripe will probably be far beyond what you need.
And finally, you’re going to get competitive pricing with Stripe, but it won’t be the lowest pricing you can get. For that, you will have to look elsewhere.
Stripe has earned its 4-star rating for now. It is not a perfect processor, but I think the company has outgrown the worst of its growing pains. Ultimately, ask yourself two questions: (1) Will you use everything Stripe has to offer? (2) Does Stripe have everything you need? If the answer is yes, it’s worth pursuing. If the answer to either question is no, you should look for other options.