Founded in 2010, Stripe (stripe.com) is a web application that allows merchants to accept credit card payments through their websites. The service is particularly tailored to merchants with access to web developers who want to customize the application according to their specific payment needs. Stripe is similar to Braintree Payment Solutions in that it does not charge any setup fees, monthly fees or monthly minimum charges. Interestingly, the company has also received investment capital from the founders of another competitor, PayPal. Stripe was founded by brothers John and Patrick Collison, and Patrick currently serves as the company’s CEO. Stripe’s headquarters can be found at 3180 18th St Ste 100, San Francisco, California 94110-2042.
Video Introduction to Stripe
Stripe Products and Services
- Debit and credit card processing
- Simple checkout buttons
- Mobile app integration
- Custom coupons
- Recurring billing
- Multi-currency support
Sales & Marketing
Key Points - Sales & Marketing
|Uses independent resellers?||No|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||No|
Stripe appears to rely primarily on its website and traditional advertising to market its services. The company specifically caters its advertising to web developers who would like to add a payment application to their websites. Stripe appears to quote its rates transparently and truthfully in its official marketing materials. However, the Stripe website does not prominently list any explanations of its cash reserve and account cancellation policies, both of which appear to be responsible for merchant complaints on this site and elsewhere. It is our opinion that Stripe could do a better job of explaining the circumstances under which merchants might experience holds before these merchants sign up for the service, and we have slightly lowered the company’s score to reflect this. Any merchant who is potentially considering doing business with Stripe is encouraged to read the company’s Terms of Service, located here, with special attention paid to section B, item 5 and section C, item 11.
Costs & Contract
Key Points - Costs & Contract
|Keyed-in rate:||2.9% + $0.30|
|PCI compliance fee:||None|
Stripe’s costs and fees are fairly straightforward with the company charging a flat per-transaction fee of 2.9% + $0.30, regardless of card type or locality. The company does not charge an early termination fee, a PCI compliance fee, or a fee for refunds or failed payments; however, there is a $15 Chargeback fee per incident. Overall, Stripe’s pricing and business model resemble that of the mobile credit card processing company Square, but for online businesses.
Like Square, the company’s standard policies regarding fraud prevention and prohibited business activities appear to be cause for complaint among several merchants. Two specific problems have been consistently reported in the complaints shown below this review and on other consumer protection websites. In one scenario, merchants apply for processing with Stripe and are informed that they are approved and ready to go. After processing one or more transactions, these merchants find that their payments have been frozen and their accounts cancelled due to their business’s engagement in prohibited activities of some kind. These cancellations appear to take effect with little or no warning, and merchants report difficulty resolving the unprocessed payments in a satisfactory and efficient manner.
In the second case, merchants express confusion over their payments being held in a reserve account. This is a common fraud prevention practice that we don’t tend to penalize processors for, but it seems that Stripe does not effectively communicate its reserve policies to merchants or warn them when a reserve amount might be withheld. Merchants should be aware that Stripe reserves the right to “change the Payout Schedule or suspend payouts to your Bank Account should we determine it is necessary due to pending disputes, excessive or anticipated excessive Chargebacks or refunds, or other suspicious activity associated with your use of the Service or if required by law or court order,” according to its terms of service.
Complaints & Service
Key Points - Complaints & Service
|Live customer support?||No|
|Most common complaint:||Fund holds|
As of this review, Stripe does not appear to have a dedicated customer phone support number, which could be a drawback for some merchants. However, the company does provide a help section on its website, a community forum, and email support. We are currently able to locate over 100 negative Stripe reviews on this and other consumer protection websites, some of which express concern that Stripe is a scam or a ripoff. This represents a steady increase in complaints since our last review. Common issues include sudden cancellation of merchant accounts, reserves being withheld without notice, and difficulty reaching customer support in a timely fashion. Complainants who have signed up with Stripe through Shopify also seem to have some trouble activating the “Authorize Only” fraud prevention setting, with both Stripe and Shopify blaming each other for this setting’s malfunction. Overall, Stripe still maintains a relatively low complaint volume considering its ease of sign-up and its size, but the trend since our last update is a negative one.
Related CPO Content
Key Points - BBB
Note: We have adjusted this company’s BBB rating according to our own standards. To better understand why we adjust BBB ratings, please see our Rating Criteria.
Stripe has been accredited with the Better Business Bureau since May 2013 and currently shows a “B+” rating on its profile. The company has had 264 complaints filed against it since its account was opened in 2012, with 161 of those related to the product or service, 80 due to billing and collection, 16 having to do with delivery problems, and six related to advertising issues. Sixty-five of these complaints were successfully resolved with BBB assistance, while 199 complaints either were not resolved to the merchant’s satisfaction or did not receive a final response from the merchant. Stripe has also received nine negative reviews to its profile, although it should be noted that these reviews are not subject to verification by the BBB.
Given the fact that Stripe has amassed over 260 complaints in the short time it has had a BBB profile, we have adjusted the BBB’s rating to a “B-.”
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About Phillip Parker
Phillip Parker is a former merchant services agent turned small business advocate and the author of "Fee Sweep," which teaches merchants how to dramatically lower their processing rates, eliminate junk fees, and avoid fine-print scams. He founded CardPaymentOptions.com to help merchants enact positive change in the credit card processing industry. Schedule a Consultation with PhillipSchedule a Consultation with Phillip