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Understanding Stripe Credit Card Processing Fees

By
Adam C. Uzialko
,
business.com writer
|
Nov 24, 2019
Kritchanut/Getty Images
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With Stripe, you can accept credit and debit card payments. Here's a breakdown of the fees you can expect to pay with Stripe.

Customers expect they can pay for goods and services beyond just paying with 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 relatively 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.

 

Editor's note: Looking for the right credit card processor for your business? Fill out the below questionnaire below to have our vendor partners contact you about your needs. 

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.]

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 also 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, you can have funds instantly deposited into your bank account for $30 per month with PayPal Payments Pro. 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 with Stripe, offers a similar pricing and fee structure. Square maintains several fees that Stripe charges. It's per-transaction fees vary 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 associated with 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 nonnegotiable. 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 is a must for small businesses

Credit card processing is effectively a need for most small businesses today. As more consumers forego 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 and 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.

Adam C. Uzialko
Adam C. Uzialko
Adam C. Uzialko, a New Jersey native, graduated from Rutgers University in 2014 with a degree in political science and journalism and media studies. He reviews healthcare information technology, call centers, document management software and employee monitoring software. In addition to his full-time position at Business News Daily and business.com, Adam freelances for several outlets. An indispensable ally of the feline race, Adam is owned by four lovely cats.
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