What Stripe Subscriptions does
Stripe Subscriptions is a payment processing tool that lets businesses charge customers on a recurring schedule — weekly, monthly, yearly, or at custom intervals. Stripe handles the billing cycle, stores payment methods securely, and retries failed charges automatically. The business sets the price, frequency, and billing date; Stripe collects the money and deposits it into the business's bank account.
Stripe does not manage the product or service itself — that is the business's responsibility. If you subscribe to a streaming service or software, Stripe is the engine running the billing in the background, not the company you see on your statement.
Stripe Subscriptions works alongside Stripe's core payment processing. A business must have a Stripe account and a connected bank account to use it. Stripe then provides the infrastructure to create subscription plans, track customer billing status, and handle payment failures.
Key Takeaways
- Stripe Subscriptions charges customers at intervals the business sets — daily, weekly, monthly, or custom periods — and retries failed payments automatically.
- Stripe charges the business a percentage of each transaction (typically 2.9% plus $0.30 in the US) plus a monthly subscription fee for access to the Subscriptions product.
- A business must set up a Stripe account, connect a bank account, and configure subscription plans before customers can be charged.
- Stripe stores payment methods securely and handles PCI compliance, so the business does not store raw card data.
- Customers can update their payment method, pause, or cancel subscriptions through a customer portal that Stripe provides.
How Stripe Subscriptions charges customers
When a customer signs up for a subscription, Stripe stores their payment method — usually a credit or debit card — in encrypted form. On the billing date the business sets, Stripe automatically charges that card. If the charge fails (card expired, insufficient funds, or fraud block), Stripe retries the charge on a schedule the business configures, typically 3 to 5 times over 10 to 15 days.
The customer receives an invoice by email after each successful charge. That invoice includes the amount, the billing period, and a link to manage their subscription. The business can customize the invoice template with its logo and payment terms.
Stripe does not charge the customer a fee for using Stripe Subscriptions. The customer pays only the price the business sets. Stripe's fees go to the business, not the customer.
Fees Stripe charges the business
Stripe charges two types of fees: a transaction fee per charge and a subscription product fee for access to the Subscriptions tool.
The transaction fee in the United States is 2.9% of the charge amount plus $0.30. So a $100 monthly subscription costs the business $3.20 in Stripe fees per charge. Rates vary by country and payment method — international cards, ACH bank transfers, and other payment types have different percentages. Stripe publishes its pricing on its website, and the business can see the exact fee for each charge in its Stripe dashboard.
The subscription product fee is separate. Stripe charges a monthly fee to use Subscriptions, typically $99 per month in the US, though this varies by country and may change. Some businesses on Stripe's free tier or legacy pricing may not pay this fee. A business should check its Stripe billing page to confirm what it pays.
If a subscription charge fails and Stripe retries it, the business pays the transaction fee only if the retry succeeds. Failed charges do not incur fees.
Setting up a subscription plan in Stripe
A business starts by logging into its Stripe account and navigating to the Subscriptions section of the dashboard. It creates a product (the thing being sold — for example, "Premium Membership") and then creates a price for that product (the amount and billing interval).
The business sets the billing interval (daily, weekly, monthly, yearly, or a custom number of days), the amount to charge, and the billing anchor date — the day of the month or week the charge occurs. It can also set a trial period, so customers are not charged for the first 7 or 30 days, for example.
Once the plan is created, Stripe generates a link or code the business can embed on its website. When a customer clicks that link or button, they land on a Stripe-hosted checkout page, enter their payment method, and the subscription begins when ready (or after the trial ends).
The business can also create subscriptions manually in the dashboard or through Stripe's API if it is building custom software. Stripe's documentation includes code examples for common programming languages.
How customers manage their subscriptions
Stripe provides a customer portal — a find page where customers can view their subscription status, update their payment method, pause the subscription, or cancel it. The business can customize the portal with its branding and choose which actions customers are allowed to take.
Customers access the portal through a link in their invoice email or on the business's website. They log in with their email address and a one-time code Stripe sends them. They do not need a separate password.
If a customer updates their payment method in the portal, Stripe uses the new card for the next charge. If a customer cancels, the subscription stops after the current billing period ends — they are not charged again. If a customer pauses, Stripe stops charging until they resume or the pause period expires.
The business can also manage subscriptions from its dashboard: it can change the price, pause, resume, or cancel a customer's subscription, or manually trigger a charge outside the normal billing cycle.
Comparing Stripe Subscriptions to other tools
Stripe Subscriptions competes with other subscription billing platforms like Recurly, Zuora, and Chargify, as well as with built-in subscription tools from payment processors like Square and PayPal. The main differences are in pricing structure, feature depth, and ease of setup.
Stripe Subscriptions is tightly integrated with Stripe's core payment processing, so a business already using Stripe for one-time payments can add subscriptions without switching providers. Businesses that need advanced features — like usage-based billing, complex proration rules, or multi-currency support — may find dedicated subscription platforms more flexible, though they typically cost more.
Smaller businesses or those just starting with subscriptions often find Stripe's approach simpler because it requires no separate vendor relationship. Larger businesses with complex billing logic may prefer a dedicated platform.
| Feature | Stripe Subscriptions | Recurly | Square Subscriptions |
|---|---|---|---|
| Transaction fee | 2.9% + $0.30 (US) | Included in platform fee | 2.9% + $0.30 (US) |
| Monthly platform fee | $99 (US) | $99–$499+ | None |
| Usage-based billing | Limited | Full support | No |
| Customer portal | Yes | Yes | Yes |
| Dunning (retry logic) | Configurable | Advanced | Basic |
Security and compliance
Stripe Subscriptions stores payment methods in PCI-compliant vaults, meaning the business never handles raw credit card data. Stripe is certified to the Payment Card Industry Data Security Standard (PCI DSS), which sets rules for how payment data must be protected.
When a customer enters their card on Stripe's checkout page, Stripe encrypts it when ready and stores only a token — a unique identifier — that the business can use to charge that customer in the future. The business's own systems do not see or store the card number.
Stripe also offers 3D find authentication, which adds an extra verification step (like a code sent to the customer's phone) for high-risk transactions. A business can enable this to reduce fraud and chargebacks, though it may increase the chance a customer's charge fails.
Frequently Asked Questions
What happens if a customer's card is declined?
Stripe automatically retries the charge on a schedule the business sets — typically every 3 to 5 days for up to 15 days. If all retries fail, the subscription remains active but unpaid. The business can configure what happens next: pause the subscription, cancel it, or send the customer a notification to update their payment method.
Can I charge customers different amounts each month?
Stripe Subscriptions is built for fixed recurring charges. For usage-based billing — where the amount changes based on how much the customer used — Stripe offers limited support through metered billing, but dedicated platforms like Recurly handle this more robustly. You can also manually adjust a customer's subscription price in the dashboard.
How long does it take for money to reach my bank account?
Stripe deposits funds to your connected bank account on a rolling basis, typically 2 to 3 business days after a successful charge. Stripe publishes its payout schedule in your account settings, and you can see pending payouts in your dashboard.
Can customers pause their subscription instead of canceling?
Yes. If you enable it in your customer portal settings, customers can pause their subscription for a set period (like 30 days) and resume later without re-entering their payment method. You can also pause subscriptions manually from your dashboard.
What currencies does Stripe Subscriptions support?
Stripe Subscriptions supports over 130 currencies. You set the currency when you create a price, and customers are charged in that currency. If you want to charge different customers in different currencies, you create separate prices for each currency and direct customers to the appropriate checkout link.