Everything You Need to Know about Stripe: a Brief Guide

The right payment solution is crucial for the success of your online business. The huge variety of merchant service providers available on the market makes most startup founders confused about which is the best platform for their specific purposes. In this article, we’ll go through one of the most recognizable payment gateways, Stripe. Below you will find a description of its core features and comparisons with other popular payment systems. 

What is Stripe?

Stripe is an international payment service provider used to make and receive payments online. This system ensures successful financial operations for internet businesses of all sizes. Stripe helps buyers and sellers move money globally at speed. Its standard payout timing varies from one country to another but it typically takes 2–7 business days.

There are two main types of Stripe processing fees: pay-as-you-go pricing that equals 2.9% + 30¢ (for non-European cards) or 1.4% + 30¢ (for European cards) per successful card charge, and a custom package designed specifically for your business. In the first case, you can get started with managing your payments in minutes, while the second method requires some setup time. However, it provides you with substantial discounts. 

How Does Stripe Work?

Stripe’s platform allows one to accept and process payments as well as manage finance online. This is one of the most popular eCommerce solutions for web and in-person retailers, software platforms, marketplaces, subscription businesses, etc. Let’s consider how Stripe payment processing works.

Simply put, each online transaction requires a payment gateway and a processor. The first one securely captures and transmits the buyer’s credit card information to the processor. In turn, the payment processor transfers money to a third-party account deducting card-related fees. After that, the payment is routed to the merchant’s bank account.

What makes Stripe special is that it combines gateway functionality and payment processing. Since Stripe payment fees are quite low, this platform is considered to be not only very convenient but also the cheapest way to handle eCommerce. 

To integrate Stripe into your business, you should choose the method that perfectly suits your needs. Luckily, the platform provides a few flexible options. The easiest of them is Stripe Checkout, which dynamically adapts to your customer’s device and location and supports coupons, tax rates, etc. Clear and well-structured documentation makes Stripe integration easy and stress-free for your software development team.

Stripe Payment Methods

Doing business in foreign markets becomes much easier with Stripe because it’s compatible with lots of payment methods. Stripe’s API supports the following universal payment types: Alipay, Apple Pay, Google Pay, Microsoft Pay, Amex Express Checkout, Masterpass, Visa Checkout and WeChat Pay. Stripe supports local payment types too. These include ACH, Bancontact, EPS, Giropay, iDEAL, Klarna, Multibanco, P24, SEPA Direct Debit, and SOFORT. However, keep in mind that this list may change depending on changes in local financial regulations.

Why Choose Stripe?

Business owners from all over the world prefer Stripe mostly because it removes the “pain” from payment processing. However, there are a few more key reasons to choose this solution. 


Thanks to frequent updates and continuous testing, the platform functions perfectly, accepting payments without delays or errors. 

Transparency of Payments

Since the company focuses on the best ethical practices, Stripe pricing is transparent. The system doesn’t charge any hidden fees from businesses or customers.

Reliable Reputation

Is Stripe secure? For sure, yes! It has proven its trustworthiness over years of successful performance on the market.

Usability of the Interface

The Stripe interface is intuitive and extremely easy to use, which saves much time when navigating and entering data. 


Stripe is a universal online platform because it processes all types of currencies and credit cards as well as working with numerous payment methods. 

The Core Functionality of Stripe

Core functionality of Stripe

Stripe is a unique platform that can meet all your payment needs. You can receive and process payments in various ways as well as track and report your financial operations. Let’s dig deeper into the core functionality of Stripe. 

Accepting payments

Your customers can pick their preferred payment option, which allows you to reach a broader audience. Stripe accepts international payments from all major debit and credit cards and also allows for digital wallet payments. Additionally, buyers can use bank redirects and direct debits for subscriptions or recurring charges. Those who prefer the ‘buy now, pay later’ option can use Stripe too. Moreover, its mobile SDKs make it possible to accept payments from your app or mobile website. 

Financial reporting

Stripe provides real-time information about transfers, refunds and fees, so you can quickly gain insight into what’s going on with your accounting. Stripe Sigma analyses your data and allows you to instantly create financial reports using built-in features or customized API. In general, the system simplifies data consolidation and structuring, which saves you a substantial amount of time. 

Setting up subscriptions

The Stripe payment gateway allows you to set up subscriptions. This way you are able to charge your customers for the services you provide even on a daily basis. You can set the price for a subscription just in a few steps, using your Stripe dashboard. 

Stripe Atlas

This tool helps entrepreneurs launch a US-based startup from anywhere on Earth. Using Stripe Atlas, you can register a C Corporation in Delaware and open a U.S. business bank account fast and safely. Stripe makes it easier for founders to obtain a U.S. Employer Identification Number and complete all the necessary legal documentation. And what’s more, you can join a global community of entrepreneurs and experts who share their invaluable experiences. 

Stripe Connect

Stripe Connect makes the payment process easier for any marketplace or platform. The payment compliance is Stripe’s responsibility while users can control funds flow, facilitate payments, and easily manage platforms. Moreover, Connect offers various tools for any business model. 

Stripe Pros and Cons

Pros of Stripe

  • Ease of Use

Online businesses appreciate this credit card processor for being super easy to use. Its well-architectured API is not only free but also extremely simple. Those entrepreneurs who have minimum developer experience can customize it for their specific e-commerce activity almost effortlessly.

  • A Large Number of Integrations

Stripe provides a wide variety of integration options, so you can choose the most convenient one for your business. The system is compatible with various pre-built e-commerce plug-ins, including Drupal, Magento, PrestaShop, WooCommerce, WordPress, and Shopware.

  • Detailed Documentation

Since Stripe is focused on developers, it has comprehensive documentation that contains ready-made solutions for various programming languages. You will find very detailed explanations for gateway customization and its testing possibilities. Stripe documentation is written in plain language, so anyone can understand how to use its features and work with API. 

  • Custom Libraries

Stripe custom libraries include a majority of programming languages. Developers can use Javascript, Ruby, PHP, Java, Python, and Node.js. Since there is no need to write additional subprograms to integrate Stripe, you can focus on the product.

  • Payment Options

Stripe covers most payment options around the globe, i.e. credit cards, digital wallets, and automatic payments. The system processes cards not only of major brands (e.g. American Express, Visa, Discover, Mastercard) but also of the more niche products (e.g. JCB, UnionPay, Diners Club). It accepts international payments from Apple and Google Pay, Masterpass, Visa Checkout, Microsoft Pay, Amex Express Checkout, WeChat Pay, and other digital wallets. Stripe also allows for recurring regular payments, such as subscriptions.

  • Testing Environment

Stripe can boast of its bug-free testing environment. The platform provides users with dozens of sample credit card numbers, some of which contain invalid numbers. This way, you can see how the system works in general and what the specific error codes are. 

Cons of Stripe

  • Geo limitations

Although Stripe processes payments from anywhere in the world, currently it can be used by businesses from only 44 countries (however, the Stripe team is constantly working on adding new countries to the list). On top of that, some of its features may not be available in certain regions. However, you can use Stripe Atlas to incorporate a U.S. company no matter where you are based.

  • Requires a developer

As mentioned above, Stripe customization involves some API key juggling. Therefore, to customize it you must either be a developer or hire someone with a technical background. But as an alternative, you can use pre-built solutions created by Stripe partners and get started with the system without coding.

Comparing Stripe and PayPal

There are a lot of ‘Stripe vs PayPal’ debates today. Taking into account numerous advantages of each payment processor, it’s quite difficult to identify which one you should choose for your business. Let’s compare their core features and point out key differences. Hopefully, this will help you make a more informed decision. 


The approach of Stripe is pretty simple: it charges you a flat fee of 2.9% + 30¢ (for non-European cards) or 1.4% + 30¢ (for European cards) per successful transaction. But if you exceed $1 million in volume per year, there will be some changes in rates that are not generally disclosed. In either case, the rates remain flat. 

PayPal has the same base fee as Stripe, but it throws in some extra service fees. Before you make any transactions, you should thoroughly read the policies as there are a lot of nuances that make things more complicated. Basically, PayPal’s service fees are higher in most cases. 


Both Stripe and PayPal are very stable platforms as they take security seriously. If you use Stripe, customer credit card data is never sent to your server. Instead, all the information is transmitted directly to Stripe, so you don’t have to store sensitive data. 

PayPal works in the opposite way, which puts a big security burden on developers or customers. If you use this system, card data necessarily goes through your server first. This imposes additional responsibility on your business. 


Stripe API was a difference-maker when the payment system was launched. It’s written in simple language, clean, and extremely easy to use. Compared to the inconsistent and buggy APIs of other platforms, including PayPal, Stripe documentation is excellent.

Competition was one of the main reasons why PayPal reconsidered their approach to API. The documentation of their updated RESTful API is significantly improved now. What’s more, it’s coincidentally modelled after Stripe. 

Data Portability

Can you imagine that PayPal doesn’t allow its users to transfer credit card data to another payment processor? So if you’ve developed a successful membership site powered with PayPal subscriptions, you are at risk of losing your existing customers because some of them probably won’t sign up again.

In contrast, Stripe ensures successful data portability. If you decide to leave this platform, you can effortlessly migrate your data in a secure and PCI-compliant way. Stripe users highly appreciate their obstacle-free right to choose. 

Wrapping up

So who is the winner in this ‘PayPal vs Stripe’ battle? Both of them have fair fees, simple API, and sufficient security. However, Stripe is the cheaper option that encourages more secure practices and easy data migration. 

Comparing Stripe and Square

Another popular platform for businesses looking for payment processing is Square. Is it better than Stripe? Let’s make a quick comparison. 


As already mentioned, the Stripe payment processing fee is 2.9% + 30¢ (for non-European cards) or 1.4% + 30¢ (for European cards) for every successful charge, which is exactly the same for Square. But in-person rates are slightly different: 2.7% + $0.05 per transaction for Stripe and 2.6% + $0.10 for Square.


Depending on your business needs and possibilities, you can choose simple or intricate ways of setting up Stripe. If you don’t have a technical background, you can install the Stripe embeddable checkout in a few quick steps. But if you want to create a custom payment platform using Stripe Elements, you will need the assistance of a developer. 

Square’s setup is somewhat similar to Stripe’s as it provides both a checkout option and a customizable API. However, its developer documentation is less thorough, which makes setting up more complicated. 

Payment Methods

Your customers will have many more payment options if you use Stripe. This platform processes payment from all popular credit cards and digital wallets, which can significantly increase your conversion rates. So in this regard, Stripe definitely wins in the ‘Stripe vs Square’ battle.

Summing up

Although Square and Stripe have the same fees for online transactions, the first one offers you more powerful in-person payment options. Its setup for e-commerce stores is also easier to complete. But if you are running an international business, Stripe would be a better alternative for you thanks to its fair fee and long list of payment options. 


Stripe is a perfect solution for international businesses since it allows them to accept payments from all over the globe with the lowest fee possible. Diverse payment options make this platform a game-changer for your web store as customers find it extremely convenient to use. No matter where you are based, you can build your e-commerce presence and scale your business using Stripe.

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