What Business Owners Need To Know About Stripe Fees

What Business Owners Need To Know About Stripe Fees

Stripe is a widely used payment processing platform that handles over 250 million API requests daily. However, with numerous payment fees shown on Stripe’s website, you may wonder how much Stripe charges and if it’s worth considering for your business.

Here’s what business owners need to know about stripe fees.

Stripe charges fees for services, including payment processing, payout, refund, and discount rates. Payment processing fees are based on the type of transaction, with credit and debit card payments costing 2.9% + 30 cents per transaction.

Transferring funds from Stripe to your bank account incurs payout costs, which vary by country and currency.

This article will discuss what business owners need to know about Stripe fees. We will explore the various pricing plans, how costs are calculated, and how they affect your business. It will also analyze the pros and cons of Stripe payments and other alternative payment processing platforms.

What is Stripe?

Stripe is a payment gateway and online financial services provider that facilitates the processing of online transactions for merchants. It was founded in 2010 by Patrick and John Collison.

And it is now one of the most widely used systems for accepting electronic payments. In 2022, Stripe reported that 3.3 million sites in over 120 countries, including Amazon and Google, used its services.

With Stripe, merchants may take payments from various sources, including credit cards, debit cards, Google Pay, Apple Pay, Alipay, and more. Additionally, Stripe’s platform includes a suite of tools to help businesses manage their payments, subscriptions, and revenue reporting.

Stripe offers a robust API that allows companies to easily integrate payment processing into their websites, mobile applications, and in-store checkout systems.

Businesses can use Stripe’s extensive documentation and support to learn more about the platform and create bespoke payment solutions. With Stripe software and APIs, companies can integrate one-time or subscription payments, billing, invoicing, sales tax automation, and more on their website.

In addition to its developer-friendly features, Stripe also offers businesses competitive pricing and transparent fees. Unlike other payment processing services, Stripe has no hidden fees, only 2.9% + 30 cents for every successful transaction.

What business owners need to know about stripe fees is that they can be discounted for businesses processing high volumes of transactions.

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What are Stripe fees?

Here’s what business owners need to know about stripe fees; they are payments made for the payment processing service’s solutions. The company caters to various enterprises, including e-commerce websites, marketplaces, and subscription services. They help businesses fight fraud, issue cards, make payments, etc.

Each solution has a standard per-transaction processing cost. This way, businesses will know precisely how much Stripe will cost them at any given time. They’ll also be able to select the most appropriate price tier for their needs.

Stripe’s pricing plans

Stripe’s pricing is relatively straightforward, with transparent per-transaction pricing. However, what business owners need to know about stripe fees is that there are no monthly or annual fees. The platform’s adjustable price structures accommodate businesses of any size.

Businesses can choose between the Integrated Plan and the Customized Plan, which are priced differently. For enterprises of any size, the Integrated Plan’s pay-as-you-go structure is an attractive feature. Conversely, the Customized Plan is ideal for businesses that process large payments.

Does Stripe charge fees for these plans? Here’s what business owners need to know about stripe fees regarding pricing plans:

Integrated plan

The Integrated Plan includes no monthly or setup costs and straightforward per-transaction pricing. Online purchases include a 2.9% transaction fee + 30 cents. The fee for an in-person transaction is 2.7% plus 5 cents.

All foreign and currency exchange transactions incur a 1% surcharge. Automatically, these costs are taken out of the merchant’s total payout.

The Stripe Integrated Plan also features a hosted, conversion-optimized checkout page. The multilingual checkout process (accessible in 20 different tongues) supports one-time and recurring payments. Also, Stripe will automatically collect 0.5% in taxes from each transaction and provide straightforward tax reporting for each filing market.

Customized plan

Companies who make many payments may consider the Customized Plan. Volume reductions, international rates, multi-product savings, and interchange prices are all available through this package. The Integrated Plan is the best option for those just getting their online store up and running.

If your company’s sales volume is significantly higher than others in your industry, you should contact Stripe’s sales team. They can tell you if the Customized Plan fits your company better.

What is Stripe payment processing fees: a complete guide

Stripe processing fees can quickly add to your business’s transaction cost. However, what business owners need to know about Stripe fees is it’s transparent and straightforward. Stripe customers can expect no hidden fees or surprises.

By understanding the fees associated with different payment methods, you can decide whether Stripe is a suitable payment processor for your business. This section will provide a detailed breakdown of Stripe’s business payment processing fees on the integrated plan.

1. Credit or debit cards

Stripe charges a simple per-transaction fee of 2.9% + $0.30 for every successful credit or debit card charge made through its platform.

This fee is charged regardless of whether the card is used in a domestic or foreign transaction. There is no monthly or setup fee, and Stripe does not charge fees for failed transactions.

2. ACH stripe fee

Stripe charges fees for ACH payment processing and credit and debit card processing fees. The maximum fee for using the ACH payment method is $5, and the transaction fee is 0.8%. Stripe also charges $1.00 per ACH credit payment.

For a two-day settlement of an ACH direct debit payment, the fee is 1.2%. A failed ACH direct debit payment will cost you $4.00, while a failed immediate bank account confirmation will cost you $1.50. It costs $15.00 to dispute a payment made by ACH direct debit through Stripe.

3. Wire transfer

If you receive payments through wire transfer, there will be an $8 fee per transaction. It’s important to note that wire transfers may take a few days to process, so it may not be the fastest payment option available.

Additionally, some banks may charge their fees for receiving wire transfers, so you should check with your bank to see if there are any additional costs.

4. Checks

For each check a business receives as payment, Stripe charges a fee of $5. This fee applies whether the payment is made with single or multiple checks.

If a check is returned or bounces, Stripe charges an additional fee of $15. Businesses must remember that these fees apply to check payments processed through Stripe.

5. Digital wallets

Digital wallets like Google Pay, Apple Pay, and Alipay are all accepted by Stripe. Although the fees associated with these digital wallets vary depending on the region, they could be anywhere from 2.9% + to $0.30 per transaction.

6. International payments

Stripe is currently supported in 47 countries, such as Canada, Brazil, Japan, and Croatia. It accepts more than 135 currencies, allowing businesses to display prices in local currency for customers.

It also automatically collects taxes in 30 countries, provides worldwide support, and works with various payment methods, such as Bancontact, EPS, Giropay, and iDEAL.

Stripe charges an additional 1.5% fee for currency conversion and another 1% for cross-border transactions. It’s important to note that fees vary by foreign payment option.

The overall cost of processing a transaction in a non-domestic currency is 4.9% plus $0.30.

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Summary

To help you better understand the different fees, we have summarized them in the table below:

Payment MethodFee
Credit/Debit Card2.9% + $0.30 per transaction
ACH Direct Deposit0.8% per transaction with a cap of $5
ACH Credit$1 per credit payment
Wire Transfer$8 per transaction
Check$5 for every check received
Digital WalletsVaries by region
International1% for currency conversion + 1% for cross-border

What business owners need to know about Stripe fees is that Stripe offers discounts for businesses with high transaction volumes. If your business processes over $80,000 monthly, you may be eligible for custom pricing based on your volume and needs.

How does stripe calculate fees?

Stripe fees are calculated using a flat rate per transaction, with additional costs for more complex services.

Transaction fees are determined by several factors, including the total value of the transaction, any applicable interchange fees, Stripe’s standard markup, any applicable foreign sales fees, and the availability of any additional features you may enable.

Remember that your monthly processing statement will not provide a breakdown of the interchange and markup fees when using Stripe’s flat-rate pricing. You will have access to this data if you select a personalized pricing plan that includes interchange-plus pricing.

Therefore, it’s crucial to understand how fees are computed so you can price your products appropriately and prevent unnecessary charges.

Stripe’s fees calculated are based on a percentage of the transaction amount, usually 2.9%, plus a fixed fee, usually 30 cents. For instance, if you want to process a $50 transaction, your charges will be calculated as follows:

$50 x 2.9% + 30¢ = $1.75.

In this scenario, you will eventually receive $48.25. Customers should be charged $51.80 (including the $1.75 processing fee) if you choose to have them cover it. However, if you find it challenging to calculate stripe fees manually, you can always use an online stripe fee calculator.

How does Stripe charge fees?

Stripe fees are charged automatically to the bank account you connect to your Stripe account when you set up the service.

Each transaction appears in your dashboard as a pending balance of the transaction amount minus the fees. What business owners need to know about stripe fees is that it’s automatically deducted when you transfer money from card to account.

Stripe fees for other products

Stripe isn’t just a payment processor. It offers various services to help businesses manage payments, automate subscriptions and invoicing, and prevent fraud. Let’s look closely at some of these products and their associated fees.

Stripe Connect

With Stripe Connect, companies have a more comprehensive tool to create their online marketplace. They can control their platform and send money to other countries using APIs and other programmable tools.

Stripe Connect comes in three different flavours: Standard, Express, and Custom, each with its own set of costs and capabilities depending on the platform in question.

Stripe Connect offers three pricing models: Standard, Express, and Custom. Standard has no platform-specific fees. Express and Custom charge payout fees of 0.25% plus $0.25 per payout sent and a $2 fee per monthly active account.

Stripe billing

Stripe Billing is an API-based service that lets you send bills to your customers for subscriptions or invoices. It offers features such as coupons, free trials, and failed payment emails.

The pricing for Stripe Billing starts at 0.5% for the Starter package and goes up to 0.8% or more for the Scale package.

Stripe Atlas

Stripe Atlas facilitates incorporating a foreign firm in the United States as a C-Corporation in Delaware. The one-time setup price is $500, with a $100 renewal fee each year.

Annual corporate tax preparation packages start at $250, with filing taxes in Delaware beginning at $225.

Stripe Radar

Stripe Radar is a fraud detection system that analyzes transactions for suspicious activity using machine learning. If you have an all-in-one package, there will be no additional cost for this assistance. It costs $0.05 per screened transaction unless you’re on a bespoke pricing plan, in which case it costs $0.10.

Radar for Fraud Teams, available on Stripe for $0.02 per transaction with the integrated plan and $0.07 per transaction with customized pricing, gives users finer-grained control over the screening process.

Stripe Treasury

Stripe Treasury is an application programming interface (API) for integrating banking services into platforms and marketplaces.

In a Stripe personal bank account, consumers can save money, pay bills, earn interest, and control their financial flow. Although the service’s price has not been public, its target audience is significant enterprises.

Stripe Identity

Stripe Identity has identity verification capabilities, including document verification and a lookup by identifying number.

Regardless of your plan, each confirmation will cost $1.50, and each ID lookup will cost $0.50. Only US social security numbers can be verified using the ID number lookup feature.

Stripe Tax

Stripe Tax is a paid add-on that may determine and collect local taxes from clients and generate in-depth tax reporting data. If your business must collect customer taxes, Stripe Tax will cost 0.5% per transaction or 0.4% if your monthly processing volume is over $100,000.

Stripe Capital

Through Stripe Capital, eligible businesses can obtain loans through merchant cash advances. The borrower allows Stripe to deduct an agreed-upon percentage of future gross sales as loan repayment.

Stripe’s pricing structure is dynamic based on transaction volume and customer history.

Pros & cons of Stripe payments

Regarding payment processing, Stripe has plenty of benefits that make it an attractive option for businesses. What business owners need to know about Stripe fees is that the payment has pros and cons. This action discusses some pros and cons of using Stripe:

Pros of Stripe

  • Discounts for certain types of businesses: If you have a high payment volume or are a non-profit organization, Stripe may offer volume discounts. It’s worth reaching out to their sales team to discuss your options.
  • No hidden fees: There are no hidden fees or monthly charges with Stripe. PCI compliance and technical assistance are the only features and services included in their all-in-one offering.
  • Universality: Stripe streamlines accepting payments from customers worldwide by supporting more than 135 different currencies and various payment methods.
  • Extensive features and services: Whether you opt for the integrated or customized plan, Stripe offers many features and services to help you manage your payments smoothly. This is especially beneficial for larger companies that need more flexibility and customization options.
  • High security: Stripe takes security very seriously and employs best practices. They have passed the most stringent certification standards in the payments industry and have been audited by a PCI-accredited auditor.
  • Stability: Stripe processes payments quickly and without issues, thanks to frequent updates and testing.
  • Simple setup: You don’t need any prior coding experience to start with Stripe.
  • Responsive customer service: All Stripe customers can access free, always-available email, chat, and phone support.

Cons of Stripe

  • Required software development expertise: Since Stripe offers APIs and extensive tools, it’s best to have coding knowledge or a team of coders to make the most of the platform.
  • No discounts for small-volume businesses: Stripe doesn’t offer discounts for individuals or small-batch businesses.
  • Payment gateway setup can be challenging: It can be complex for non-developers, requiring professional assistance for flawless execution.
  • Stripe’s in-person payment options are limited: There aren’t many options to pay in person, with its physical card reader service not widely available.

Is Stripe right for your online business?

Stripe is an excellent payment processing solution for many online businesses. However, what business owners need to know about stripe fees is that they may be too expensive for some companies. Here are some factors to consider when deciding if Stripe is suitable for your business:

  1. Business size: Stripe is ideal for businesses of all sizes, but it’s most advantageous for large-scale operations. Its pricing model and features may be less attractive to small businesses with low transaction volumes.
  2. Technical expertise: Stripe offers various APIs and other integrations requiring coding knowledge. If you need more technical expertise, you may hire a developer or use a pre-built integration to get the most out of Stripe.
  3. International sales: Stripe’s support for over 135 currencies and various payment methods makes it an excellent option for international businesses.
  4. Security: Stripe’s high level of security and compliance with industry standards makes it a safe choice for processing payments.

Alternatives to Stripe & fees comparison

While Stripe may be a great payment processor for some businesses, others may prefer an alternative. What business owners need to know about stripe fees is that they are competitive and cheaper compared to other popular options. Here are some popular payment processors that you can consider:

Payment ProcessorTransaction FeeMonthly FeeChargeback FeeDiscount RateAccepted CurrenciesFeatures
PayPal3.49% + $0.49$0$20Available for some merchants  200+Fraud detection, mobile card reader
Square  2.9% + $0.30$0$0Available for some merchants  40+Mobile card reader, invoice generation
Stripe2.9% + $0.30$0$15Volume discounts for large payments volume and non-profits135+Discounted ACH rates, extensive APIs

When comparing Stripe to other payment processors, it’s essential to consider the specific needs of your business. Here are a few areas to compare:

  1. Pricing: Stripe’s transparent pricing model offers competitive rates for larger businesses. However, other processors may offer more attractive rates for smaller businesses.
  2. Features: Stripe’s integrations, APIs, and payment options are extensive and customizable. Other processors may have more limited options but may still meet the needs of some businesses.
  3. Support: Stripe’s 24/7 customer support is highly responsive and helpful. Other processors may offer less comprehensive support options.

What business owners need to know about Stripe fees conclusion

Stripe is a popular payment gateway for online businesses due to its extensive features and services, high security, and responsive customer service. It offers a transparent pricing model with no hidden fees.

However, the lack of discounts for small-volume businesses and the need for software development expertise may be a drawback. What business owners need to know about Stripe fees is that they can be tailored to fit the business.

Stripe also offers stable and secure payment processing and a simple setup process that does not require coding knowledge. It is an excellent choice for companies that want flexibility and additional features with a customized plan.

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FAQs about what business owners need to know about Stripe fees

What is Stripe’s processing fee?

The stripe processing fee is the cost charged by Stripe for processing payments on behalf of your business. The fee is a flat rate plus a percentage of the entire transaction value.

Why do I have a charge from Stripe?

If you have a charge from Stripe on your account statement, the charge was likely made for a product or service you purchased from a business that uses Stripe as its payment processor.

Does Stripe accept international payments?

Yes, Stripe accepts international payments and supports processing payments in over 135 currencies, making it an ideal payment gateway for businesses with a global customer base.

Is Stripe cheaper than PayPal?

Generally, Stripe fees are lower than PayPal's, especially for businesses with larger transaction volumes. However, the specific rates and fees can vary based on the payment method, transaction volume, and other factors.

Are Stripe fees tax deductible?

What business owners need to know about Stripe fees is that they may be tax-deductible as a business expense. However, this depends on your country's tax laws and regulations. Consult an accountant if you need help determining whether something is tax deductible.

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