What Stripe does and who uses it

Stripe is a payment processor that lets businesses accept credit cards, debit cards, and digital wallets online. When a customer enters their card details on a website or app, Stripe handles the transaction — it talks to the customer's bank, checks the card is valid, moves the money, and sends confirmation back to the business.

Stripe works for online stores, subscription services, marketplaces, nonprofits, and software companies. It does not require a physical location or a traditional merchant account with a bank. You connect Stripe to your website or app through code, and it starts processing payments the same day you set it up.

Stripe also handles invoicing, recurring billing, and payouts to your bank account. The company is based in San Francisco and operates in over 40 countries, though the features and fees available to you depend on where your business is located.

Key Takeaways

  • Stripe charges a percentage of each transaction plus a fixed fee per payment, with rates varying by card type and country.
  • Setup takes hours, not days — you provide business details, connect a bank account, and can start processing payments when ready.
  • Stripe holds funds for a period called the rolling reserve, which means not all money reaches your bank account right away.
  • Stripe's dashboard shows every transaction, refund, and payout, so you can track money in real time without logging into your bank.
  • Disputes and chargebacks are handled through Stripe's system, and you can upload evidence to defend a transaction if a customer contests it.

How Stripe charges fees

Stripe's main fee is 2.9% plus $0.30 per successful card payment in the United States. This means a $100 transaction costs you $3.20. The percentage stays the same, but the fixed fee applies to every transaction, so small payments are proportionally more expensive.

International cards cost more: 3.9% plus $0.30 in most cases. Some card types — American Express, for example — may have different rates depending on your agreement with Stripe. ACH bank transfers (moving money directly from a customer's checking account) cost 0.8% with a $0.30 minimum and $5 maximum.

Refunds cost nothing to process, but Stripe keeps the percentage fee from the original transaction. If you refund a $100 payment, the customer gets $100 back, but you do not recover the $3.20 Stripe charged you initially. Disputes and chargebacks carry a $15 fee each if you lose.

Stripe does not charge a monthly subscription or setup fee. You pay only when money moves through the system. If you process no payments in a month, you owe nothing.

Rolling reserves and when you get paid

Stripe does not send you all the money customers pay on the day they pay it. Instead, the company holds a portion in a rolling reserve — typically 1% of your transaction volume, held for 7 days. This means if you process $10,000 in a week, Stripe sets aside $100 and releases it seven days later.

The reserve exists to cover chargebacks and refunds. If a customer disputes a charge or you issue a refund, Stripe pulls the money from the reserve rather than from your bank account. Once the reserve period passes and no disputes emerge, the money moves to your connected bank account.

Payouts happen on a schedule you choose — daily, weekly, or monthly. Stripe deposits the money into the bank account you provided during setup. The first payout can take 5 to 7 business days; after that, payouts follow your chosen schedule.

Some businesses with higher dispute rates or newer accounts may face larger reserves. Stripe reviews your account history and adjusts the reserve amount based on risk.

Setting up Stripe and connecting it to your site

You start by going to Stripe.com and entering your business name, email, and password. Stripe asks for your business type (sole proprietor, LLC, corporation, nonprofit), your address, and your tax ID or Social Security number. This takes about 10 minutes.

Next, you add a bank account where Stripe will send payouts. You provide the routing number and account number, and Stripe verifies it by depositing two small amounts (usually under $1 each) that you confirm in your Stripe dashboard.

Once your account is verified, you can start accepting payments. If you have a website built with Shopify, WooCommerce, or another platform, you install Stripe's plugin or extension from that platform's app store. If you built your own website, you use Stripe's code libraries (called SDKs) to embed a payment form.

Stripe provides documentation and code examples for every major programming language. If you are not a developer, you can use Stripe's Hosted Checkout — a pre-built payment page you link to from your site, so customers never leave Stripe's find servers to enter card details.

Disputes, chargebacks, and fraud protection

When a customer says a charge was unauthorized or the product never arrived, the dispute goes to Stripe first. You see it in your dashboard with a important date to respond — usually 7 days. You can upload an invoice, shipping confirmation, email correspondence, or any evidence that the transaction was legitimate.

Stripe reviews your evidence and makes a decision. If you win, the money stays in your account. If you lose, Stripe removes the amount from your next payout and charges you $15. A chargeback is a dispute that the customer's bank escalates; Stripe handles the process the same way, but the $15 fee still applies if you lose.

Stripe uses machine learning to flag suspicious transactions before they complete. High-risk payments may be declined automatically, or you can set rules in your dashboard to accept or reject transactions based on location, card type, or amount. You can also require 3D find authentication — an extra password step that reduces your liability if the transaction is later disputed.

Stripe does not hold you liable for fraudulent transactions if you follow its security guidelines. This means if a stolen card is used on your site and the cardholder disputes it, Stripe absorbs the loss, not you — as long as you did not store card details insecurely or ignore Stripe's fraud warnings.

Stripe versus other payment processors

Square and PayPal also process online payments and charge similar rates (around 2.9% plus $0.30). The main differences are in features and integrations. Square is stronger for in-person payments with card readers; PayPal is better if you already have a PayPal business account. Stripe is built for developers and scales well for high-volume businesses.

Authorize.Net and First Data are older processors that require a separate merchant account with a bank, which adds setup time and monthly fees. They are less common for new businesses but may be required by certain industries.

Some platforms like Shopify include payment processing built in, so you do not choose Stripe separately — the platform handles it for you. If you use Shopify Payments, you pay Shopify's rates instead of Stripe's, though the rates are similar.

What happens if Stripe closes your account

Stripe can close an account if it detects fraud, high chargeback rates, or business activity that violates its terms. High-risk industries like gambling, adult services, and unlicensed money transmission face stricter review. If your account is closed, Stripe freezes your balance for 90 days while it investigates, then sends any remaining funds to your bank account.

You can appeal a closure by submitting documents to Stripe's support team. Providing invoices, customer communications, and proof that disputes were resolved can help your case. If the appeal fails, you need to move to another processor — your transaction history stays with Stripe, but you cannot process new payments through them.

To reduce the risk of closure, keep your chargeback rate below 1%, respond to disputes quickly with evidence, and avoid business types Stripe explicitly prohibits. Stripe publishes its restricted business list on its website.

Frequently Asked Questions

Can I use Stripe if I am outside the United States?

Stripe operates in over 40 countries, but the features and fees available depend on your location. Some countries have higher fees or longer payout times. Check Stripe's website for your country to see the exact rates and which payment methods are supported.

What payment methods does Stripe accept besides credit cards?

Stripe accepts debit cards, Apple Pay, Google Pay, ACH bank transfers, and regional methods like iDEAL in Europe and Alipay in Asia. The methods available depend on your location and your customer's location. You can enable or disable any method in your dashboard.

How long does it take to get money after a customer pays?

The money is held in Stripe's rolling reserve for 7 days, then sent to your bank account on your payout schedule. If you chose daily payouts, you see the money 7 to 8 days after the customer's payment. Weekly or monthly payouts take longer.

What if a customer wants a refund?

You issue a refund through your Stripe dashboard by clicking the transaction and selecting "Refund". The customer's card is credited within 1 to 3 business days. Stripe does not charge you to process the refund, but you lose the transaction fee you originally paid.

Does Stripe work with my shopping cart platform?

Stripe integrates with Shopify, WooCommerce, BigCommerce, Magento, and most other platforms. Search your platform's app store for Stripe and install the official extension. If your platform is not listed, you can use Stripe's code libraries to build a custom integration.