What Stripe does

Stripe is a payment processor that lets businesses accept credit cards, debit cards, and digital wallets online and in person. It handles the technical connection between your customer's bank, your business bank account, and your website or app — you don't have to build that infrastructure yourself.

When a customer enters their card details on your checkout page, Stripe encrypts that information, sends it to the card networks (Visa, Mastercard, American Express), checks with the customer's bank that the funds exist, and then deposits the money into your business account. Stripe takes a cut of each transaction for this service.

Stripe also provides the software tools you need to run that checkout — the forms customers fill out, the ability to save cards for repeat purchases, fraud detection, and reporting that shows you which transactions succeeded and which failed.

Key Takeaways

  • Stripe charges a percentage of each transaction (typically 2.9% plus 30 cents for online card payments) rather than a monthly fee, so you only pay when you actually process a sale.
  • You can start accepting payments within hours by adding Stripe to your website, online store, or invoicing software — you don't need a separate merchant account with a bank.
  • Stripe handles the security and compliance work (PCI compliance) so your business doesn't have to store or manage raw card data.
  • Stripe works with most website builders, shopping carts, and accounting software, so you may already have access to it through a tool you use.

How Stripe charges you

Stripe's pricing depends on how you accept payments. For online card payments (the most common), Stripe charges 2.9% of the transaction amount plus 30 cents per successful charge. If a customer pays $100, Stripe takes $3.20 and you receive $96.80.

In-person payments processed through a Stripe card reader cost 2.7% plus 5 cents per transaction. International card payments cost 3.9% plus 30 cents. ACH bank transfers (moving money directly from one U.S. bank account to another) cost 1% with a $5 minimum and $5 maximum per transaction.

Stripe does not charge monthly fees, setup fees, or cancellation fees. You pay only when a transaction goes through. Failed transactions and refunds do not incur charges. If you use Stripe's invoicing feature to send bills to customers, there is no extra cost — you only pay the standard processing fee when the customer pays the invoice.

What you need to use Stripe

To accept payments through Stripe, you need a business bank account in the United States, Canada, the United Kingdom, or one of 40+ other countries where Stripe operates. You also need a valid business tax ID (EIN in the U.S.) or personal tax ID if you're a sole proprietor.

Stripe will ask for basic information about your business — what you sell, your expected monthly revenue, and your business address. They use this to assess fraud risk. The signup process takes about 10 minutes, and you can usually start processing payments the same day, though Stripe may hold your first few payouts for a few days while they verify your account.

On the technical side, you need either a website or a way to send payment links to customers. Stripe provides pre-built checkout pages you can link to directly, so you don't need coding knowledge. If you use Shopify, WooCommerce, Square Online, or most other e-commerce platforms, Stripe is already built in — you just connect your Stripe account.

Stripe versus other payment processors

The main competitors to Stripe are Square, PayPal, and Authorize.Net. Square charges the same 2.9% plus 30 cents for online payments and also offers in-person card readers. PayPal's standard rate is 3.49% plus 49 cents, which is higher than Stripe for most transactions. Authorize.Net charges a monthly gateway fee ($25) plus per-transaction fees, so it costs more if you process a small number of payments.

Stripe's main advantage is that it integrates with more software tools than its competitors — if you use a specific shopping cart, invoicing app, or accounting software, Stripe is more likely to be a built-in option. Stripe also tends to have lower fees than PayPal and does not require a monthly subscription like Authorize.Net.

Square is the closest competitor in terms of pricing and ease of use. Choose Square if you primarily sell in person and want a simple card reader, or if you already use Square's other tools like Square Register or Square Appointments. Choose Stripe if you sell mostly online, use specialized software that integrates with Stripe, or want the lowest per-transaction cost.

How Stripe keeps payments secure

Stripe is PCI DSS Level 1 certified, which is the highest security standard for handling payment card information. This means Stripe has passed rigorous audits proving it encrypts card data, monitors for fraud, and protects against hacking.

When you use Stripe, your customers' card numbers never touch your servers. Stripe's code runs on your checkout page and sends the card data directly to Stripe's encrypted servers — your business never sees the raw card number. This means you don't have to worry about storing card data securely or being liable if hackers steal card information from your site.

Stripe also includes fraud detection that flags suspicious transactions automatically — for example, a charge from a different country seconds after a previous charge, or a card number that appears in multiple failed attempts. You can review flagged transactions and decide whether to accept or reject them.

When Stripe might not be the right choice

Stripe does not work in every country. If your business is based outside the 40+ countries where Stripe operates, you will need a different processor. Check Stripe's website to see if your country is supported.

Stripe also does not process certain types of transactions. High-risk businesses — like online gambling, cryptocurrency exchanges, or adult content — are typically not allowed on Stripe. If you operate in one of these categories, you will need a processor that specializes in high-risk payments.

If you process a very high volume of payments (millions per month), you may be able to negotiate lower rates with a processor like Authorize.Net or by working directly with a payment processor that offers custom pricing. For most small and medium businesses, Stripe's standard rates are competitive.

Getting started with Stripe

Visit stripe.com and click "Start now" to begin the signup process. You will enter your email, create a password, and then provide your business name, address, and tax ID. Stripe will ask what you sell and your expected monthly revenue.

Once your account is created, you can add Stripe to your website or app. If you use Shopify, WooCommerce, or another platform with built-in Stripe support, you just connect your Stripe account through the settings. If you have a custom website, you can use Stripe's pre-built checkout page (no coding required) or integrate Stripe's API if you want a custom checkout experience.

Stripe will deposit your first payout into your business bank account within 2 to 5 business days of your first successful transaction. After that, payouts happen on a schedule you choose — daily, weekly, or monthly.

Frequently Asked Questions

Can I use Stripe if I don't have a website?

Yes. Stripe lets you create a payment link and send it to customers via email or text message. Customers click the link, enter their card details, and pay. You can also use Stripe's invoicing feature to send bills directly to customers, and they can pay by clicking a button in the invoice.

What happens if a customer disputes a charge?

Stripe notifies you of the dispute and gives you a window (usually 7 days) to respond with evidence that the transaction was legitimate — like a shipping confirmation, email receipt, or customer communication. If you don't respond or the customer's bank sides with them, Stripe reverses the charge and deducts it from your account.

Does Stripe work with my shopping cart software?

Stripe integrates with most major platforms including Shopify, WooCommerce, BigCommerce, Squarespace, Wix, and hundreds of smaller tools. Check Stripe's app directory or your shopping cart's payment settings to see if Stripe is available. If it is, connecting takes a few minutes.

How long does it take to get paid after a customer buys something?

Stripe deposits money into your bank account on a schedule you choose during setup — typically daily, weekly, or monthly. The first payout takes 2 to 5 business days. After that, payouts arrive on your chosen schedule, usually within 1 to 2 business days of the payout date.

What if I process a refund?

You can refund a transaction through your Stripe dashboard. The money goes back to the customer's card, and Stripe does not charge you a fee for the refund. The refund typically appears in the customer's account within 5 to 10 business days, depending on their bank.