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. 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 maybe a tad overwhelming for the uninitiated. Every time I update this review, there’s something new. It’s like peeling back the layers of an endless onion (though perhaps with fewer tears).
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 seem tailored to a few very particular niches. 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, it’s hard to recommend it over other options.
Then there’s the fact that 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 since our last check-in. 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. I am comfortable raising Stripe to 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.
Check out the full review for more information, and let me know what you think in the comments section.
Products and Services:
Stripe claims to offer 100+ features, and I’m inclined to believe it. The 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 now 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 Kickstarter.
- 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 $30-$40 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.
- Advanced reporting: Download your choice of reports, or send data to QuickBooks or Xero. You can send data directly to these programs using Snapy, PennyPipe or Commerce Sync.
- 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.
- 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.
- Instant* debit card transfers: Stripe offers the option for marketplaces using Connect to transfer money directly to a debit card immediately, a service that used to take a few days. The funds recipient pays 1.5% of the total funds transferred. (*Instant depends on the bank still. It could take 30 minutes, or it could still take 48 hours to receive funds.)
- Stripe Relay: Relay is geared toward contextual commerce. It’s a way for you to power purchases in mobile apps that aren’t yours (such as ShopStyle, Spring, and InMobi). You can also sell on Twitter. These are all great tools for the right merchants, but I feel they’re a bit limited. 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.
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, WHMCS, 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.
Looking around, it doesn’t seem like Stripe has added all that much in terms of features since our last look at the companies. New countries, yes, but the core offerings are the same.
But there is one other big thing that Stripe just rolled out: 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.
It sounds a bit like Stripe’s existing fraud detection tools, beefed up with a bit more programming and data analysis. Even Stripe admits that Radar is still a bit of an experiment. While it’s free for merchants to use right now, the company hasn’t ruled out the prospect of launching it as an entirely separate service.
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 actually natively support mobile payments or any sort of in-person payments, something I think is actually 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 integrations here. 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.
I think this entire category could use some work, but I am happy to see multiple options available to merchants. And I am sure more are on the way.
One of the nicest things about pay-as-you-go processors is that they generally have 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 that 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.
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 and 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.
Sales and 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. 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 and 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. You’ll also enjoy the fairly thorough knowledge base.
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 though, 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.
Negative Reviews and Complaints:
At the time of writing this review, Stripe’s BBB page still has an A+ rating with 384 complaints closed in 3 years, 117 of them in the last 12 months. That’s an increase in overall complaints since our last check-in in March 2016 (up from 362) — but a decrease in complaints in the last 12 months (down from 135). 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’s a relief to see that the complaint volume isn’t doubling or tripling like it has at previous updates. It tells me the worst is likely (maybe hopefully?) over.
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 1455 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, Kickstarter, and other mass platforms can make accuracy a bit complicated. The best reference I can find is a line in an article that Stripe supports hundreds of thousands of businesses. (By comparison, we know Square has at least 2 million active merchants and PayPal Business has more than 8 million merchants). That same article goes on to say Stripe claims to have at some point processed 4 out of every 5 cards in the world…which is a really lofty claim. But I don’t doubt it.
Stripe also has 30 reviews on the BBB page, only one of which is positive. That is disappointing, but not exactly surprising.
Also, you’ll find this bit of information from the BBB on the complaints page:
Stripe, Inc. came to BBB’s attention in July 2012. A review of the company was done in August 2015. Complaints on file state that funds are held from consumers without any explanation as to why, and accounts are closed without explanation. Complaints also state that consumers have difficulty reaching the company.
BBB advises consumers read the company’s Terms of Service fully, to understand what they are agreeing to. Specifically, Section C: Processing Card Transactions and Receiving Your Funds and Section D.License, Termination, and Other General Legal Terms.
Stripe, Inc., also advised BBB that the best way for customers to get ahold of Stripe is through email at firstname.lastname@example.org.
Unfortunately, since January 2016, none of the BBB’s complaints are accessible to the public (except for one from October) — so we can’t go through them to see what pain points merchants are encountering, or gauge how Stripe is responding. We’re having to look at other sources: comments on this review, of course, comments elsewhere on the web.
Ripoff Report shows 45 reports (up ever so slightly from 40) and most pertain to account holds or terminations.
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. Facebook comments seem to go ignored, but 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.
- 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.
I think that Stripe Radar is just building on these existing tools with a bit more data collection and refinement, but I am curious to see whether it will actually improve fraud prevention. 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 and 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. 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.
Back in January 2015, Stripe managed to lure the crowdfunding giant that is Kickstarter away from its longtime partner, Amazon Payments, all in the name of making it easier for creators to get their projects set up and funded quickly. Stripe is also powering Kickstarter’s rival, IndieGoGo.
In addition, when Flint closed down unexpectedly in February 2016, it recommended its customers transfer over to Stripe. Shopify sets their merchants up with Stripe accounts, too — and they’re certainly not the only ones. When I first took a look at Shopify myself, I honestly expected to see more issues relating to its payment services because of its relationship with Stripe, but I found hardly any, and most stemmed from merchants crossing into 1099 space.
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, positive user reviews are scarce at the moment. I would love to see some case studies beyond the fraud prevention, and maybe some more proof from some small and medium-sized businesses, not just the giants of commerce.
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, but they fit in a slightly different cubbyhole.
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. If you need in-person payments as well as online, there are other options.
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 might want to look for other options.