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Stripe Payments Review: Fees, Complaints, Lawsuits & Comparisons

  • March 2, 2022
  • By Payments Industry Analyst, Phillip Parker
  • 494 User Reviews
see which processors will offer you the lowest pricing and best service
see who will offer you the lowest pricing and best service

Rating

 3.5/5
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(888) 963-8955

Most Recent Comment

  • Ian Eversley: says:
    April 16, 2022
    "Square, Stripe, Paypal and WePay are not real credit card processors. These are money transfer companies claiming to be credit companies. Ple..." Read More
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See All 5-Star Recommendations

Rating:
 3.5/5

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  • Ian Eversley: says:
    April 16, 2022
    "Square, Stripe, Paypal and WePay are not real credit card processors. These are money transfer companies claiming to be credit companies. Ple..." Read More
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A Developer-Friendly Credit Card Processor

Founded in 2010, Stripe is a web application that allows merchants like retail businesses and online stores to accept credit card payments online instead of typical pos systems. The service primarily markets itself towards web developers seeking robust online payment acceptance tools and APIs, and its capabilities include payment methods like recurring billing, accepting Bitcoin, and facilitating payments on marketplace-style platforms. Stripe is similar to Braintree Payment Solutions in that it does not charge any setup fees, monthly fees, or monthly minimum fees for payment processing.

Stripe is what is classified as a “third-party” payment processor, aka a non-banking processor or an “aggregator,” within the payment industry. From the business owner perspective, this simply means that Stripe will typically have a higher transaction fee than more traditional credit card processing companies like Helcim, and may have stricter fraud prevention protocols that could cause a legitimate business’ funds to be held back due to an overly sensitive trigger on card payments. Unlike Paypal, business owners must maintain a separate checking account to receive the funds from their transactions. It is noteworthy that Stripe has also been designated the preferred payment gateway for online companies like Amazon and Shopify due to its robust security features and wide array of developer-friendly tools and plugins.

When looking at online Stripe reviews, it’s apparent Stripe is very much a software company at heart. The product is a fairly straightforward card processor that is easy to use, integrates well with other platforms including online ones, and lacks the usual contractual terms and conditions associated with most payment providers. In that same approach, it also has some fees and stipulations that you might not see with standard debit and credit card processors. Stripe’s ease of use and flexibility lends well to a wide variety of businesses, especially those who rely heavily on e-commerce platforms. For traditional businesses in retail, hospitality, and other high transaction volume services, Stripe’s nuances might become a source of frustration and unnecessary cost. Read more about these issues in our Complaints and Service section below.

Is Stripe Holding Your Funds Right Now?

Thousands of merchants’ accounts have had their payments frozen by Stripe. If you’re one of them and finding your money frozen by stripe, then you might find these resources helpful:

  • How to Make Your Payment Processor Release Your Money
  • How to Fight Chargebacks
  • Best Merchant Accounts for Hard-To-Place Business Types

Stripe Online Payment Processing Options

Currently with Stripe, business owners can accept all major debit and credit cards online including Visa, Mastercard, American Express, and even Discover and Diners Club.

Stripe also allows online payments outside of the major card options through various digital or mobile wallets like Apple Pay, Google Pay, Microsoft Pay, and Click to Pay. Stripe also enables businesses to accept ACH credit and debit transfers as well as wire transfers.

Stripe Software Integrations

It would seem Stripe has spent considerable effort to make integrations and account setup as seamless as possible. Stripe’s built-in integrations are one of the big selling points for this online credit card payment service. Out of the box you can link your Stripe payments with major online ecommerce platforms like BigCommerce, OpenCart, MailChip, and SquareSpace. The payment service can also easily integrate with subscription and recurring billing platforms like GivingTools, Partial.ly, and others or it can utilize an internal sales management system known as Stripe Billing. If you are tied to accounting services like Netsuite or Quickbooks, Stripe can also easily connect to those platforms and has access to technical support through chat online to help.

Stripe E-Commerce Features

Currently, Stripe shows over 150 different e-commerce platform integrations on its website. Beyond the extensive integration list, the company has created several additional e-commerce features designed to further accent the online credit card payment service. Stripe Billing is a simple and easy-to-use subscription manager designed for businesses that need recurring billing services. Fraud protection is provided by Stripe’s Radar service.

Stripe Radar utilizes machine learning to automatically detect and prevent fraudulent transactions before they are settled, also while locking out fewer real customers. Radar has access to data partnerships with all the major credit card companies, providing a ton of data points for its machine learning systems. Combined with Stripe’s multi-layer security features it’s no surprise Stripe is considered to be one of the most secure payment platforms as well as being a Level 1 PCI Service Provider.

One of Stripe’s unique e-commerce features is Adaptive Acceptance. Again, we see the software-savvy company utilizing machine learning to dynamically retry declined transactions before even returning a decline code to the merchant. Ideally, if the funds are available, Stripe’s Adaptive Acceptance is more likely to successfully transmit the card payment through another payment lane.

This feature carries over to Stripe Billing as well. Before merchants are required to manually re-enter and retry recurring billing subscriptions Stripe will automatically check for card activity, changes or updates, and if the payment method is being used successfully. Stripe then uses that information to best approach another charge attempt at a more ideal time. Overall Stripe appears to be aiming to provide its customers higher invoice payment rates, and heavily leverages its machine learning products and access to vast amounts of financial data to automate that process.

Headquartered in California

Interestingly, Stripe 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 510 Townsend St, San Francisco, CA 94103.

Stripe Review Video Summary

https://www.cardpaymentoptions.com/wp-content/uploads/2021/12/Stripe_Payments_and_Merchant_Account_Rev.mp4

Stripe Review Table of Contents

  • Costs & Contract: Offers a month-to-month contract with no early termination fees. The company charges a flat transaction fee and provides the option for…
  • Complaints & Service: Has received more than 300 public complaints regarding…
  • BBB Rating: The company has been accredited by the Better Business Bureau since 2013. Currently has an “A+” rating but has 460 complaints and 112 reviews in regards to its…
  • Sales & Marketing: Does not hire independent sales representatives but has received only a few merchant complaints about its…

 

Companies Stripe integrates easily with.
Strip integrates easily with many big name e-commerce companies.

Should You Trust Stripe?

Lawsuits, Reviews & Complaints

See Who Makes The Cut >>>

Complaint Summary

Total Online Complaints 300+
Live Customer Support No
Most Common Complaint Fund Holds

Stripe Alternatives

We recommend Helcim as the top alternative to Stripe. Both services offer an API for developers, a month-to-month contract, and integrated mobile payment options, but Helcim provides a lower per-transaction fee, a customer support phone line, next-day funding, and QuickBooks integration. Helcim has also been consistently reviewed as one of our top-rated processors since we first reviewed it almost ten years ago. We feel that Helcim provides all the functionality that Stripe offers with a much smoother customer experience. For more information please read our full Helcim Review.

Stripe Holding Payments?

Common issues include sudden cancellation of merchant accounts, reserves being withheld without notice, and difficulty reaching customer support in a timely fashion. This is a common practice among merchant account providers, but Stripe’s lack of live support compounds the issue. 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.

Very Popular, But the Backlash Is Real

Overall, Stripe still maintains a relatively low complaint volume for a company of its size. This can be expected considering its ease of sign-up and the size of its user base, but the trend since our last update is a negative one. We’re still seeing a steady flow of negative Stripe reviews concerning fund holds, unexpected fees, and overall very poor customer service reviews.

High Amount of Refund Fee Complaints

In online Stripe reviews posted by customers, there are many reports of business owners being charged the 2.9% transaction fee on transactions even after refunds were issued. Stripe clearly states on their website: “There are no fees to refund a payment, but Stripe’s fees on the original payment will not be returned in case of a refund.” This can come as a surprise to many business owners who are used to paying the flat $.30 transaction fee on refunded transactions, but not the percentage fee. This is standard for many credit card payment providers, however Stripe will still charge you that percentage of the overall transaction. While Stripe does not accept most high-risk industries, there are still certain types of normal-risk businesses that might experience higher refund rates. We recommend potential customers with higher-than-average refund rates to look elsewhere for online payment processing to avoid paying lots of Stripe fees.

explination of Stripe's refund policy
Stripe’s fee refund policy.

Stripe Lawsuits & Fines

On February 1, 2019, Boom Payments! sued Stripe for patent infringement in the matter Boom! Payments, Inc. v. Stripe, Inc. et al. The lawsuit alleges that Stripe infringed upon two patents awarded to Boom Payments! by the US Trademark and Patent Office to process millions of transactions through its platform.

In 2020, a class-action suit was brought against Stripe for alleged data mining through its Stripe Elements feature. The most recent update to this suit came in summer 2021, when a judge from the Northern District of California ruled to dismiss the part of the suit that dealt with Stripe itself collecting user information.

The ruling states that the company provides enough information to users who agree to its use through third parties that Stripe can collect information. However, the question of whether it is legal that Stripe then passed that information on to other third parties was not answered. This suit appears to be ongoing as of the writing of this review.

Another 2020 lawsuit in Massachusetts saw the company paying $120,000 over allegations that Stripe’s risk monitoring and fraud prevention practices violated Massachusetts consumer protection laws.

The DOJ brought a case against Visa in 2021 that involved Stripe, saying that they were looking into Visa’s relationships with Stripe and other FinTech organizations. Essentially, the question is whether incentives given by Visa to the companies amounted to anticompetitive practices.

Stripe Customer Service Options

As of this review, Stripe appears to offer 24×7 phone support in English for all Stripe users but does not publicly list a dedicated support phone number. This is a primary factor keeping it from being considered one of our top-rated providers. However, the company does provide a help section on its website, a community forum, and email support. We are currently able to locate over 300 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.

We were not able to locate a dedicated Stripe customer service number. Stripe does not accept inbound customer support calls. Users must make a request for Stripe to contact them with a support phone call from inside the customer dashboard.

Is the BBB Rating for Stripe Accurate?

Better Business Bureau Profile

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see who will offer you the lowest pricing and best service

BBB Summary

Product & Service Complaints 242
Billing & Collection Complaints 189
Advertising & Sales Complaints 9
Guarantee & Warranty Complaints 2
Delivery Complaints 18

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.

Over 350 Stripe Complaints Filed Due to Product and Billing Issues

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 460 complaints filed in the past 36 months. 242 of the complaints were due to a problem with a product or service, 189 were billing or collections issues, 9 were due to advertising or sales problems, two were problems with a guarantee or warranty, and 18 were issues with delivery. Only 188 of these 460 complaints were resolved by the company to the satisfaction of the merchant. The remaining 272 were resolved to the dissatisfaction of the merchant or received no final response.

What BBB Customers Reviews Say About Stripe

Stripe has also received 112 reviews on its profile, 109 of which are negative, making only 3 positive in tone. It should be noted that these reviews are not subject to verification by the BBB. The most recent review was written by a Stripe user describes poor customer service experience:

Stripe closed my account without an explanation. I tried contacting Stripe’s supposed “24×7 support team” three times, and I have received no response. Clients can only contact stripe through email, which makes it even more frustrating. Thankfully I didn’t have a balance when they closed my account; otherwise, they might have held the money. I’m genuinely shocked that a company a successful as Stripe ignores their clients. I guess they don’t care about us smaller clients, and they prefer to focus on their big clients like Shopify and Lyft.I have dealt with other payment processors like Square, and their support is phenomenal compared to Stripe’s non-existent support.0/10 would not recommend. Is your business next?

“C” Level Performance

Given the fact that Stripe has amassed 460 complaints in the short time it has had a BBB profile, we have adjusted the BBB’s rating to a “C.”

How Expensive is Stripe?

Rates, Fees, and Contract Terms

This processor offers the lowest rates and best service we've seen

Cost Summary

ACH & Bitcoin Rate 0.8% (Capped At $5)
Debit & Credit Rate 2.9% + $0.30
International Rate 3.9% + $0.30
Instant Payouts 1%
Early Termination Fee None
PCI Compliance Fee None
Equipment Lease Terms None

Stripe Fees & Pricing

Stripe’s payment and credit card fees are fairly straightforward. The company charges a flat per-transaction fee of 2.9% + $0.30, regardless of card type, and adds a 1% transaction fee for international payments. Online merchants using the platform’s instant payout feature can have funds transferred to their bank account immediately, albeit with a 1% fee. The company does not charge an early termination fee, PCI compliance fee, or a fee for refunds or failed card payments; however, there is a $15 Chargeback fee per incident (refunded if the chargeback is reversed). Overall, Stripe’s pricing, payment methods and business model resemble those of the mobile credit card processing company Square, but for online businesses instead of retail businesses and restaurants.

Interchange-Plus Pricing Available

According to the company’s website, Stripe also provides interchange-plus pricing plans to online merchants in addition to their other card payment methods. Merchants can contact Stripe for custom pricing plans if they process a high volume of online payments for their customers. These merchants can also receive a volume-based discount to their tiered rate structure allowing for business flexibility. CardPaymentOptions.com considers the ability to provide interchange-plus pricing plans as a “must have” to be rated as a top-rated provider. 

Not All Merchants Accounts Welcome

Like Square, the company’s standard policies regarding fraud prevention and prohibited business activities appear to be cause for complaint among many online merchant accounts. Merchants report two specific problems in the complaints below this review and on other consumer protection websites. In one scenario, merchants apply for credit card processing with Stripe and are informed that they are approved and ready to go. After processing one or more online payments, these merchants find that their payments have been frozen and their accounts canceled due to the fact that their sales are considered “high-risk credit card processing” by Stripe. 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.

Stripe Has Total Control Over Your Money

In the second case, merchants express confusion over their card payments being held in a reserve account. This is a common fraud prevention practice that we don’t usually 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 “suspend Instant Payouts to you at any time, including (a) due to pending, anticipated, or excessive Disputes, Chargebacks, Refunds, or Reversals; (b) in the event of suspected or actual fraudulent, illegal or other malicious activity; or (c) where we are required by Law or court order,” according to its terms of service.

Does Stripe Use Deceptive Marketing?

Advertising & Sales Strategy

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you can trust these processor

Key Points

Employs Independent Resellers No
Advertises Deceptive Rates No
Discloses All Important Terms No

No-Nonsense Marketing, No Gimmick Fees

Stripe appears to rely primarily on its website and traditional advertising to market its online credit card services. The company specifically caters its advertising to web developers who would like to add an online payment application to the websites they manage. Stripe appears to quote its rates transparently and truthfully in its official marketing materials.

Watch Out for Stripe Fund Holds

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 numerous Stripe complaints on this site and elsewhere. It is our opinion that Stripe could do a better job of explaining the circumstances of their contract, 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 account provider who is potentially considering doing business with Stripe is encouraged to read the company’s fraud policy (excerpted below), which is similar to most other payment processor fund holding policies:

We may refuse, condition, or suspend any Transactions that we believe: (i) may violate this Agreement or other agreements you may have with Stripe; (ii) are unauthorized, fraudulent or illegal; or (iii) expose you, Stripe, or others to risks unacceptable to Stripe. If we suspect or know that you are using or have used the Services for unauthorized, fraudulent, or illegal purposes, we may share any information related to such activity with the appropriate financial institution, regulatory authority, or law enforcement agency consistent with our legal obligations. This information may include information about you, your Stripe Account, your Customers, and Transactions made through your use of the Services.

Does Stripe Deserve Your Business?

Review Summary & Our Thoughts

Stripe is a Decent Option for E-Commerce and Online Sales

Stripe is a large online credit card processor with robust integration tools for web development. Numerous Stripe reviews complain of fees or poor customer service, especially regarding fund holding policies. The company rates as an average merchant services provider according to our standards. The company has seen a large increase in customer reviews  and complaints since our last update, but its overall complaint volume remains low for its size. Stripe’s transparent pricing model and simplicity appear to satisfy the majority of its clients, but it’s reserve policy, cancellation policy, and customer support are responsible for most of the company’s complaints. Merchants are encouraged to carefully read Stripe’s terms of service and the contract agreement to compare it to other e-commerce merchant account providers.

5-Star Rated Stripe Competitors

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About The Author

Phillip Parker is a Payments Industry Analyst and creator of this blog, CardPaymentOptions.com. Phillip is passionate about researching merchant service providers and payment industry trends. He is often quoted as an expert source in national publications such as INC Magazine, The Los Angeles Times, Entrepreneur, and many others.

“I started this blog because I was disgusted by the business practices of the merchant services industry. I wanted to empower business owners by providing insight on how to avoid shady merchant account providers and costly credit card processing mistakes.” 

Phillip’s Processor Comparisons

Picking a credit card processor can be a headache, but we’ve made it easy. Phillip recommends comparing the best merchant services providers we’ve researched.

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