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 web development skills 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
- Sales & Marketing: Stripe does not hire independent sales representatives and has received only a few merchant complaints about its sales practices.
- Costs & Contract: Stripe offers a month-to-month contract with no early termination fees.
- Complaints & Service: Stripe has received more than 250 public complaints.
- BBB Rating: Stripe currently has an “A+” rating with the Better Business Bureau based on 394 complaints in the past three years.
- Rates & Fees: How Merchants Avoid Fund Holds With 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
|Employs Independent Resellers||No|
|Advertises Deceptive Rates||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 the websites they manage. 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 A, item 7.
Stripe Marketing Example
Costs & Contract
Key Points - Costs & Contract
|ACH & Bitcoin Rate||0.8% (Capped At $5)|
|Debit & Credit Rate||2.9% + $0.30|
|Early Termination Fee||None|
|PCI Compliance Fee||None|
|Equipment Lease Terms||None|
Stripe’s costs and fees are fairly straightforward. The company charges 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 (refunded if the chargeback is reversed). Overall, Stripe’s pricing and business model resemble those 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 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 cash reserve 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
|Total Online Complaints||250+|
|Live Customer Support||No|
|Most Common Complaint||Fund Holds|
As of this review, Stripe does not 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 250 negative Stripe reviews on this and other consumer protection websites, many 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.
Key Points - BBB
|Product & Service Complaints||173|
|Billing & Collection Complaints||105|
|Advertising & Sales Complaints||89|
|Guarantee & Warranty Complaints||9|
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 an “A+” rating on its profile. The company has had 394 complaints filed in the past three years, with 173 of those related to the product or service, 105 due to billing and collection, 18 having to do with delivery problems, and 89 related to advertising issues. Eighty-one of these complaints were successfully resolved with BBB assistance, while 313 complaints either were not resolved to the merchant’s satisfaction or did not receive a final response from the merchant. Stripe has also received 38 negative reviews on 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 394 complaints in the short time it has had a BBB profile, we have adjusted the BBB’s rating to a “C.”
About Phillip Parker
Hi, I’m Phillip and I’m disgusted by the state of credit card processing in the U.S. and abroad. I believe that the industry has been overrun by people who engage in fraud and deception in order to steal money from hard working business owners. I’ve made it my mission to expose the companies and individuals who engage in predatory marketing, pricing, and contracts, or just provide terrible service. Along with uncovering the bad guys, I’ve also discovered the good guys who do stand out from the status quo. CPO is a website where you will find ratings and reviews of these companies along with advice on how to save money and which service providers consider. Together we can move the industry in a positive direction. If you would like to help support my work, please checkout “Fee Sweep” my eGuide to getting the lowest possible fees when accepting card payments. If you haven’t heard of “interchange” this advice will save you hundreds, even thousands, in processing fees.Schedule a Consultation with Phillip