Stripe is a payment service provider that business owners can use to accept dozens of payment methods, from credit cards to buy now, pay later services. It charges a fee on each transaction.
Stripe works best if you want to accept online payments. But, with added hardware, you can also use it for in-person payments.
When customers pay your business for products or services using cash or a check, those payments can be deposited into the business bank account. However, if they want to make payments using a credit card, you’ll need a payment processor.
As a , Stripe allows business owners to accept payments from credit and debit cards and processes those payments. Using Stripe, businesses can also accept payments from mobile wallets and buy now, pay later services. Stripe also supports payments in a variety of currencies. Stripe Payments is the software that processes those payments.
If you’ll want to use Stripe to accept in-person payments, the company offers Stripe Terminal, a system. If you plan on taking only online payments, then you won’t need it.
In addition to processing payments in person and online, Stripe offers lots of additional services, including billing, invoicing and sales tax automation.
Stripe Payments handles the steps between a customer providing their card information and learning that their payment has been accepted.
Here’s how it works:
Once the cardholder’s issuing bank finalizes its approval, you can transfer funds from Stripe into your business bank account. Stripe customers can receive payouts when transactions have finished processing (usually around two business days). Payouts can also be made on a schedule of your choosing (daily, weekly or monthly).
You’ll pay Stripe for facilitating each transaction. These fees vary by transaction type; for example, each successful online payment costs 2.9% plus 30 cents, whereas in-person fees are 2.7% plus 5 cents.
Some of the world’s largest companies, including Amazon and Shopify, use Stripe. But any merchant who accepts credit and debit cards or mobile wallet payments can use this payment processor.
Stripe is best suited for business owners who do much of their business online, as most of its unique features — such as its open application programming interface and ability to accept more than 135 currencies — are primarily relevant to online sales.
Stripe has been audited and certified as a PCI Level 1 service provider, which means it has to undergo an annual compliance report and routine security scans and tests.
Stripe encrypts all customers’ credit card numbers and stores decryption information separately, which means Stripe can’t see credit card numbers without taking extra steps.
Also, Stripe mandates that all online transactions take place over the more secure HTTPS network.
To begin using Stripe, take a few steps:
You won’t be able to collect payouts immediately, however. You generally can’t receive your first payout until seven days after you’ve taken your first payment. In some industries, the waiting period can be as long as 14 days.
This post was originally published on Nerd Wallet
