The Small Business Owner’s Guide to Stripe Fees: What You Need to Know
Small businesses looking for credit card payment processors tend to find the usual names popping up in their searches: Square, PayPal, Payment Depot, Stax, etc. On some occasions, Stripe may make it into these lists. While lesser-known, this company is worth a staggering $36 billion, processing payments for some of the world’s biggest organizations.
Stripe, in fact, powers much of the internet. According to their website, 90% of adults in the United States have bought from a website that uses Stripe to accept payments.
There is no denying that Stripe is a leader in the e-commerce payment processing space. Their suite of APIs is a developer’s dream. But in this article, we’ll take a look specifically at their services and fees to determine whether or not it’s a feasible solution for small business owners.
Stripe fees and pricing: An overview
There are two avenues to explore with Stripe as a payment provider:
- Integrated Plan. A pay-as-you-go option that is best suited for small businesses.
- Customized Plan. A highly customizable solution for large teams with in-house developers.
Stripe’s credit card processing fees
Through the Integrated Plan, the fee structure is quite transparent and straightforward for basic payment processing. There are no annual or monthly fees. Just the credit card transaction fees.
In-person debit and credit card processing is charged at 2.7% plus $0.05 per successful transaction. Whether your customers use debit cards, credit cards, mobile wallets (such as Android or Apple Pay), American Express, or Visa at the card reader, the costs remain the same.
Online card charges are all processed with a fixed fee of 2.9% plus $0.30. This pricing, again, remains the same no matter which card or payment method is used at checkout.
Types of Stripe fees
In addition to the typical transaction types, Stripe pricing also accounts for the nuances of online payment processing, but this is where costs can add up.
Stripe’s international fees
Accepting payments online gives your business the potential to connect with an international customer base. But those transactions come at a cost. International payments through Stripe attract an extra 1% for international cards and 1% for currency conversion if required.
These international card fees also apply to in-person payments: 1% for international cards and 1% for currency conversion if required.
ACH, checks, and wire transfer fees
Automated clearing house (ACH) bank transfers, checks, and wire transfers all come with their own cost structure.
- ACH credit payments attract $1 per payment
- ACH direct debit payments can range from 0.8% up to a maximum of $5
- Every failed ACH direct debit transaction will incur a $4 fee
- Disputed ACH direct debit transactions incur a $15 fee
- Wire payments are $8 per payment
- Checks are $5 per check
- Bounced checks incur a $15 fee.
Stripe’s specialized solutions and fees
Given the enormous variety of businesses that Stripe supports, they have a range of packages tailored to meet some of the most typical business needs.
Used by WooCommerce, Wix, Twitter, Salesforce, and others, Stripe Connect is for marketplaces and software platforms. Connect comes with programmable APIs and various developer tools to build end-to-end payment solutions.
This highly customizable solution comes with different pricing than those above. Connect comes in three tiers: Standard, Express, and Custom.
Standard has no platform-specific fees. Express charges 0.25% plus $0.25 per payout sent, plus $2 per monthly active account. And Custom fees are the same as Express, but additional features can be added for additional costs.
Used by Postmates, Ring, and Atlassian, Stripe Billing is for recurring business, such as subscriptions or invoicing. It comes with tools to help build and scale custom billing programs, which can be managed from your dashboard.
There are two Billing plans to choose from: Starter and Scale.
Starter costs 0.5% on recurring charges. And Scale can go to 0.8% or more as it offers more advanced integrations. Invoice automatic reconciliation on the Starter plan will cost $7 for each invoice, while the Scale plan has this feature included at no cost.
Used by Fitbit, Kickstarter, and Deliveroo, Stripe’s Radar solution protects against fraud. Built-in machine learning is used to identify fraud by comparing billions of data points throughout its network. Businesses on the standard Stripe payment plan can get access to this service for no additional fee.
If you want to use this without already being on a standard plan, the charge for screening these transactions is $0.05. Businesses needing a more advanced option have Fraud Teams, which charges $0.02 per transaction screened if you have a standard price plan. Or $0.07 per transaction screened if you use this without a standard plan.
Also in the Radar package is Chargeback Protection, automatically covering disputes without requesting evidence. The charge for this is 0.4% each time.
For entrepreneurs taking their first step toward launching their business, Atlas provides a smooth path to launch. From company incorporation to setting up a bank account, registration, tax ID, and everything else in between, Atlas is a one-stop business-launch-shop.
Paperwork, legal hurdles, and hidden fees are all managed and minimized through the Atlas platform. All you pay is $500.
Sigma is powered by SQL to help businesses get fast insights through analysis of their business data. With pre-built query templates, Sigma is accessible even to businesses without in-house analytics specialists.
Fees for businesses with low charge volumes are $0.02 per charge. Once you reach more than 5,000 charges per month, this rises to $0.014 per charge. An infrastructure fee is also charged, which can be anywhere from $10 to $100, depending on the sales volume.
Used by Postmates and NexTravel, Stripe Issuing allows businesses to issue their own cards — virtual or physical — for just $0.1 per virtual card or $3 per physical card. These give you total control over where they can be spent, as well as spending controls to cap amounts.
For the first $500,000, there are no transaction fees. After that, charges are 2% plus $0.20 per transaction. International payments attract extra fees, as with all other Stripe account solutions. There is also a $15 fee for lost disputes.
Stripe processing fees: FAQs
With so many service combinations and fees to consider, it can be difficult to narrow down whether Stripe is feasible for small businesses. Here we will answer some of the most commonly asked questions to help you assess Stripe for your business needs.
Does Stripe offer volume discounts?
Volume discounts are available only through the Customized pricing package, which we discussed at the very beginning. It is not available for businesses with high volumes going through the Integrated plan.
If you are on the Customized plan or intend to go onto the Customized plan, get in touch with their support team to find out if you qualify as high volume.
Does Stripe offer discounts for nonprofits?
Nonprofits accepting charitable donations may be eligible for discounted rates through Stripe, but there are a few barriers to eligibility.
As expected, you will need to show your nonprofit status to qualify. And you will also need to demonstrate that 80% or more of your organization’s donations will go through Stripe.
Processing ticket sales, tuition payments, membership fees, and other payments that help fund NFPs are not likely to help you qualify. The discount is largely based on organizations that rely primarily on charitable donations.
To find out if you qualify, it’s best to contact Stripe’s phone support to discuss your situation.
Is Stripe better than PayPal for small businesses?
It is never simple to say definitively which solution is best for small businesses, as everyone has different needs. So let’s instead compare some fees.
PayPal charges the same as Stripe for online payments: 2.9% plus 30 cents. Their additional service fees include:
- Adding PayPal buttons to your site: 2.9% + a fixed fee
- Adding PayPal to your checkout: 2.9% + a fixed fee
In-person payments are more expensive than Stripe, with PayPal charging:
- 2.75% for chip, pin, and contactless payments
- 3.4% plus 30c for magstripe payments
Stripe has far more options for the Customizable plan, but it can work out to be expensive. Compared with PayPal’s services, Stripe’s Integrated plan works out to be more cost-effective. There are no setup fees or monthly fees, and the pricing remains fixed no matter the card type.
How does Stripe compare with Square for e-commerce?
Square is a small business star, offering great point-of-sale (POS) solutions for small business merchants. Like PayPal, its online transaction rates are the same as Stripe: 2.9% plus 30 cents.
For in-person transactions, Square is more competitive with Stripe than PayPal. They charge:
- 2.9% plus 30 cents for online payments
- 2.5% for keyed entry
- 1.75% for card transactions.
In contrast, Stripe charges 2.7% plus $0.05 for all in-person transactions.
Square cannot compare with Stripe for online customizability. As a solution for startups and small businesses, Square and Stripe won’t really compete in the same way PayPal and Stripe might. Square is a great solution for brick-and-mortar business models that also have an online presence. But if you have a predominantly online business, Stripe is the better option.
Does Stripe charge merchants for refunds?
There are no fees for refunds. If refunds need to be issued, Stripe will subtract this from your Stripe balance or your bank account if there are no funds available in your Stripe balance.
The initial processing fee will not be returned, but there are no extra charges to worry about unless there is a dispute. Any disputes over transactions will attract a $15 fee.
Is Stripe right for small businesses?
Stripe shines brightest for its developer tools, which will typically not be needed by small businesses. But there are still benefits for SMEs. Stripe does not lock you into contracts, and PCI compliance is included in the processing fees.
The best approach is to crunch the numbers. See if it saves you money based on your business model. Per transaction fees can add up, so consider this in your assessment.
Wholesale rates can be a smarter option for small businesses to minimize the per-transaction costs. A provider like Payment Depot that offers web API, virtual terminal, recurring billing, encryption, mobile processing, and every other online need, may be a more cost-effective option.