Customers expect they can pay for goods and services in ways beyond cash. Debit card and credit card transactions are increasingly common, as are digital wallets, which allow consumers to make contactless payments by holding their smartphone to an NFC-enabled payment terminal. But to extend these payment options to your customers, you need to partner with a payment processor.
Stripe is one such processor. In fact, it's our pick as the best processor for online businesses. It offers competitive rates and few fees compared to other leading payment processors.
This guide will help you understand Stripe's pricing and the fees you can expect to pay when partnering with the company.
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Does Stripe charge a fee for refunds?
Stripe has chargeback fees, like most other credit card processors. If a customer disputes a charge and requests a payment reversal, Stripe charges you $15. However, if the dispute is settled in your favor, Stripe will reimburse the entirety of the fee. Most credit card processors do not reimburse chargeback fees in the event of a payment dispute. Moreover, if you issue a refund to a customer, Stripe does not charge a refund fee, but you will not be reimbursed for the initial transaction cost of the refunded payment.
How much does Stripe cost per month?
Stripe charges different rates and per-transaction fees depending on the transaction being conducted and how the customer is paying for those goods and services.
Here's a closer look at Stripe's rates and fees:
- Domestic debit card and credit card payments: When you accept domestic debit cards or credit cards, regardless of the brand, you will pay a 2.9% rate plus 30 cents for each transaction. The same rates apply for customers using a digital wallet.
- ACH debit transfers: You can accept ACH debit and credit transfers, as well as wire transfers with Stripe. There are separate pricing details for different types of payments using this method, such as ACH direct debit payments, wire transfers or checks. For a list of pricing details, see Stripe's website.
- In-person credit card payments with a Stripe terminal: When accepting in-person credit card payments using a Stripe terminal (also known as a card-present transaction), you will pay a rate of 2.7% plus 5 cents per transaction regardless of the card type or brand.
How much you pay each month depends largely on your sales volume and the value of each sales ticket. Stripe offers volume discounts for businesses that process more than $100,000 in transactions per month. Custom pricing is available for businesses that engage in microtransactions or unusually large sales tickets. Additionally, nonprofits could qualify for special pricing. [Want to learn more about credit card processors? Check out our reviews and best picks.]
Stripe online payments
Payments come in many shapes and sizes, and Stripe can handle virtually all of them. This breakdown shows how each payment method is handled by the service.
- Online transaction fees (currency conversion fees): When online transactions involve an international card, there is a flat-rate fee of 1% per transaction. In cases where currency conversion is necessary, the conversion fee is 1% per transaction. In some cases, a transaction may incur both fees.
- Chargeback fee: Chargeback fees can be handled in two ways. The traditional method involves a $15 fee per chargeback. If the customer's bank rules in your favor, this fee is refunded in its entirety. Conversely, you can opt for chargeback protection. This is charged at 0.4% per transaction, and it covers the disputed amount and the dispute fees whenever they occur.
- ACH credit: Stripe already covers debit charges. For ACH credit charges, the fee is 0.8%, but it is capped at $5 per transaction. There is a $1 credit per ACH payment, and there is a $7 fee when invoices are reconciled. The number of payments within an invoice does not impact the $7 fee.
- Failed ACH direct debit payments: ACH debit is already covered, but failed and disputed payments are a separate issue. Failed debits will incur a payment of $4 for each transaction that failure occurs. Disputed ACH direct debit payments will incur a $15 dispute fee. This is independent of refunds that may be awarded in the dispute.
- Wire transfer: Wire transfers are available through Stripe. Each individual wire payment will be charged $8. Stripe can automatically reconcile wire payment invoices. When this occurs, there is a $7 charge per invoice.
- Checks: Checks can be processed and accepted through Stripe, which offers automatic check processing to simplify the transaction. Check processing fees start at $20 per month, if fewer than five checks are processed in that month. For individual fees, there is a charge of $5 per check, $15 per bounced check and $7 per invoice. Invoice payment will incur upon reconciliation and is independent of the number of checks in the invoice.
- Alipay: Alipay is another e-wallet program that many users favor. Stripe supports Alipay and treats it as a unique payment method. This means that payments made with Alipay are subject to a standard 2.9% plus 30 cents per transaction. No additional fees are necessary to process Alipay payments.
- Klarna: Stripe also supports Klarna payments. The processing with the app will depend on how payments are divided. In the universal Pay Later plan, the fee is 5.99% plus 30 cents per transaction. With the Slice It payment, the fee is 2.99% plus 30 cents per transaction. The classic Pay Later in 4 comes to 5.99% plus 30 cents per transaction. All plans are available for transactions supported by Klarna.
- SEPA: Single Euro Payments Area payments are handled separately from foreign cards and currency conversions. Payments routed through the SEPA system have their own fee for processing, which comes out to 2.9% plus 30 cents per transaction. This is available for all SEPA payments.
How are Stripe's fees calculated?
Stripe does not charge many of the common fees that other credit card payment processors charge. Here's a list of the common fees you won't pay with Stripe:
- No application or setup fee
- No monthly fees for statements or customer service
- No monthly minimum processing requirement
- No payment gateway setup fee
- No monthly payment gateway fee
- No annual fee
- No PCI compliance fee
- No early termination or account closure fee
You will, however, incur costs for chargeback fees and international transactions. International transactions are based on a percentage of the transaction value, while chargeback fees are a flat rate of $15. You are refunded the chargeback fee if the disputed transaction is resolved in your favor.
Stripe charges additional monthly fees for extra services or third-party integrations.
Which is better: PayPal or Stripe?
PayPal and Stripe are both mobile payment processors and, as such, offer similar pricing and fee structures.
PayPal charges several of the same fees that Stripe does, including a chargeback fee and international transaction fee. PayPal's chargeback fee is a flat rate of $20 per incidence, while international transaction rates are 1.5% of the sales value. (There's a supplemental 2.5% fee for currency conversions when they're required.) PayPal charges additional fees for optional services, like its recurring billing service and advanced fraud protection services.
Here's a closer look at the common fees you won't pay with PayPal:
- No application fee or setup fee
- No monthly fee for statements and customer support
- No monthly minimum processing requirement
- No gateway setup fee
- No monthly gateway fee
- No annual fee
- No annual or monthly PCI compliance fee
- No early termination or account closure fee
With PayPal Payments Pro, you can have funds instantly deposited into your bank account for $30 per month. It allows you to accept payments online through a virtual terminal or through your website with a payment gateway.
How do Stripe's fees compare with Square's fees?
Square, a prominent competitor of Stripe's, offers a similar pricing and fee structure. Square maintains several fees that Stripe charges. Its per-transaction fees range from 10 to 30 cents on most payment types. Square does not, however, apply a chargeback fee.
Here's a closer look at the fees you won't pay with Square:
- No application or setup fee
- No monthly fee (sometimes called a statement fee)
- No monthly minimum processing requirement
- No payment gateway setup fee
- No monthly payment gateway fee
- No annual fee
- No PCI compliance fee or PCI noncompliance fee
- No early termination or account closure fees
- No chargeback fee
With Square, you can have funds instantly deposited into your bank account rather than waiting the standard two or three days. This service will cost you an additional 1% fee. There are also monthly fees for additional services or third-party integrations.
What is Stripe's commission fee for international transactions?
If you accept international payments with Stripe, an additional 1% fee will be levied on top of Stripe's regular rates. If currency conversion is required for the international payment, Stripe charges 1% on top of the normal international transaction rates.
Stripe supports processing in more than 135 currencies, accumulating separate balances for payments in different currencies. When setting up a Stripe account, you specify a "presentment" currency, which is your preferred currency. Whenever the presentment currency differs from the "settlement" currency used in the transaction, Stripe converts the payments to your presentment currency before transferring funds to your bank account. This is when you incur the currency conversion fee.
How flexible is Stripe with fee negotiation?
Generally, Stripe's fees are not negotiable. The company doesn't charge some of the most common fees that other card processors charge. However, if your business generates more than $100,000 in sales volume each month, you might qualify for discounts. Additionally, there are some custom plans that could be negotiated when you sign up with Stripe.
Nonprofits might qualify for special pricing. Most businesses, however, are subject to Stripe's normal fees, which include the per-transaction fees, chargeback fee and international transaction fees.
Credit card processing a must for small businesses
Credit card processing is effectively a need for most small businesses today. As more consumers forgo cash for easier payment methods like credit cards, debit cards and digital wallets, enabling these payment methods is a matter of customer service and securing repeat business.
Many processors charge a wide range of fees, which can significantly increase your monthly costs. Stripe maintains comparatively few fees and charges competitive rates, however, making it easy and affordable for entrepreneurs to accept credit and debit card payments, as well as allowing customers to use their digital wallets.
If you're interested in credit card processing services, companies such as Stripe, Square or PayPal could be right for you. To learn more about credit card processing companies and how your business could benefit from working with one, see our best picks page and our reviews of the best credit card processing services.