Stripe is a payment processor that lets you accept credit cards and digital wallets online
Stripe is software that sits between your customer and their bank. When someone buys from you, Stripe handles the transaction — it takes the card details, checks with the customer's bank that the money is there, moves the funds to your account, and sends you a receipt. You do not store card numbers yourself. Stripe stores them in their secure system and you just tell Stripe to charge a card when you need to.
Stripe works for online stores, invoicing, subscriptions, and in-person payments if you add a card reader. The company makes money by taking a small cut of each transaction — typically 2.9% plus 30 cents for online card payments, though the rate changes based on your business type and sales volume. You pay only when money actually moves; there is no monthly fee to have an account.
The main reason businesses use Stripe instead of building their own payment system is that Stripe handles the security and legal parts. Your business does not have to store sensitive card data, which means you do not have to meet the strictest security rules. Stripe does that work.
Key Takeaways
- Stripe takes payment information from your customer, checks with their bank, and deposits money into your business account — you never touch the card number directly.
- Stripe charges a percentage of each transaction plus a small flat fee, with no separate monthly cost to maintain the account.
- You can use Stripe for online checkout, email invoices, recurring subscriptions, and physical card readers at a register or pop-up.
- Stripe handles security and compliance so your business does not have to store or protect raw card data.
- Setup takes minutes if you already have a business bank account and tax ID, though approval can take a few business days.
How Stripe connects to your website or store
If you run a website, Stripe gives you code you can add to your checkout page. When a customer enters their card details and clicks "pay," that code sends the information to Stripe's servers, not to your own computer. Your website never sees the full card number — Stripe returns a token, which is a safe stand-in that only Stripe can decode.
You do not have to write code yourself. Stripe works with popular store platforms like Shopify, WooCommerce, BigCommerce, and Squarespace. If you use one of those, you just connect your Stripe account and turn on payments — the platform handles the technical part. Stripe also offers pre-built checkout pages you can link to from an email or social media post, so customers land on a Stripe-hosted page to pay.
For businesses that do not have a website, Stripe Invoicing lets you send a payment link by email. The customer clicks the link, enters their card details on a Stripe page, and the money lands in your account. You can set up recurring invoices too, so Stripe charges the same customer on a schedule without you having to send a new invoice each time.
What payment methods Stripe accepts
Stripe accepts all major credit cards: Visa, Mastercard, American Express, and Discover. It also accepts digital wallets like Apple Pay, Google Pay, and PayPal, so customers can pay with one click if they have those set up on their phone or computer. In some countries, Stripe accepts local payment methods — bank transfers, iDEAL in the Netherlands, Alipay in China — but the core offering is cards and digital wallets.
When a customer pays with Apple Pay or Google Pay, they do not enter a card number at all. They authenticate with their fingerprint or face, and the wallet sends Stripe a one-time token. This is safer for the customer and faster for you. Stripe also supports ACH transfers (bank-to-bank payments in the US) if you set that up, though it takes several days to settle.
Fees and what they cover
For online card payments, Stripe charges 2.9% of the transaction plus 30 cents. So a $100 sale costs you $3.20. If your customer pays with a digital wallet, the rate is the same. International cards cost slightly more — 3.9% plus 30 cents — because Stripe has to convert currency and take on more fraud risk.
Stripe's fee includes fraud detection, which runs automatically on every transaction. If a payment looks suspicious — a card used in two countries in one hour, or a mismatch between the billing address and the card's registered address — Stripe flags it. You can set rules for what Stripe should do: block the payment, let it through, or ask the customer for extra verification.
There are no hidden monthly charges, no setup fees, and no fees for failed payments. You pay only when a transaction succeeds. If a customer disputes a charge with their bank (a chargeback), Stripe charges you $15 to investigate and respond. If you lose the dispute, you also lose the original sale amount.
Security and what Stripe handles for you
Stripe is PCI compliant, which means it meets the security standard that credit card companies require. PCI compliance is expensive — it means hiring security auditors, running penetration tests, and maintaining detailed logs. By using Stripe, your business does not have to do that work yourself. Stripe does it, and you inherit the protection.
When you use Stripe's checkout, your website never receives the customer's full card number. Stripe's code intercepts it before it reaches your server. This means if someone hacks your website, they cannot steal card data because it was never there. You only store the token Stripe gives you, which is useless to a thief.
Stripe also monitors for fraud patterns. If a card is used repeatedly in a short time, or if the location does not match the customer's history, Stripe can block it automatically. You can also set up 3D Secure, which asks the customer to verify their identity with their bank — this reduces your liability if the transaction turns out to be fraudulent.
Setting up Stripe for the first time
To open a Stripe account, go to stripe.com and click "Start now." You will need your business name, your personal name, your business address, and your tax ID (EIN in the US). Stripe also asks for your business bank account number so it knows where to send your money. The whole form takes about five minutes.
After you submit, Stripe reviews your information. This usually takes one to three business days. Stripe is checking that you are a real business and that you are not in a high-risk industry — they decline some businesses in gambling, adult services, or high-chargeback categories. Once approved, you can start accepting payments immediately.
If you use Shopify, WooCommerce, or another platform, you do not fill out Stripe's form directly. Instead, you go to your platform's payment settings, choose Stripe, and log in with your Stripe account. The platform handles the connection. You still need a Stripe account, but the setup is faster because the platform already knows what information Stripe needs.
When Stripe might not be the right choice
Stripe works well for most online businesses, but it is not ideal for every situation. If you process a very high volume of payments — tens of thousands per month — you might negotiate a lower rate with a different processor. If your business is in a high-risk category (like CBD sales or cryptocurrency), Stripe may decline you or charge higher fees.
If you need to accept payments in person at a physical store, Stripe offers a card reader, but it is not the cheapest option for high-volume retail. Square and Toast are often better for restaurants and shops because they are built for that use case. If you need to accept checks or wire transfers, Stripe does not handle those — you would need a separate process.
Stripe also does not offer merchant cash advances or loans, which some competitors do. If you need to borrow money against future sales, you would have to go to a different company. For most online businesses, though, Stripe is straightforward and widely supported.
Frequently Asked Questions
Do I need a business license to use Stripe?
Stripe does not require a business license, but it does ask for a tax ID (EIN in the US). If you are a sole proprietor, you can use your Social Security number. Stripe's main goal is to verify you are a real person or business, not to check whether you have filed paperwork with your state.
Can my customers see that Stripe is processing their payment?
Yes, they will see "Stripe" on their credit card statement or in their payment confirmation. You can customize the name that appears — for example, you can make it say "MyStore.com" instead of "Stripe" — but Stripe's involvement is visible to the customer and their bank.
What happens if a customer disputes a charge?
The customer contacts their bank and says the charge was unauthorized or the product did not arrive. Stripe notifies you and gives you a window (usually 7 to 10 days) to respond with evidence — a shipping receipt, email confirmation, or other proof. If you win the dispute, you keep the money. If you lose, Stripe refunds the customer and charges you $15 plus the original transaction amount.
Can I use Stripe if I am outside the United States?
Stripe operates in over 40 countries, but not all. You can check stripe.com to see if your country is supported. If it is, you can open an account with a local bank account and tax ID. Fees and supported payment methods vary by country.
How long does it take for money to appear in my bank account?
Stripe deposits money to your bank account on a rolling basis, usually within two to three business days. You can see the exact schedule in your Stripe dashboard. Some banks take an extra day to process the deposit on their end, so it may be four business days total from the time the customer pays.