What Is Stripe and How Does it Work?

Looking for a full-stack payment processor for your business? Many sellers are turning to Stripe to simplify the checkout process for their small-business. This article walks you through the key features of Stripe and how to use it in your internet business 

Here’s What We’ll Cover:

Here’s What We’ll Cover:

What is Stripe?

How Does It Work?

Who Uses Stripe?

How To Set Up and Use Stripe

More About Stripes Services

Is Stripe Right for Your Business?

More Stripe Resources for Online Businesses

What is Stripe?

Stripe is an online payment processing and credit card processing platform for businesses. 

When a customer buys a product online, the funds need to be delivered to the seller; Insert Stripe. Stripe allows safe and efficient processing of funds via credit card or bank and transfers those funds to the sellers account. Stripes software includes both a payment processing platform, as well as a credit card payment gateway, and both are required in each successful online transaction– making it the most efficient and simple software to choose for online payments.

How Does It Work? 

Stripe has simplified the process of their service for business owners so it’s easy to understand and navigate.

Stripe Payment Process: 

• When you create an account for your business, Stripe software will connect to the purchasing page of your shop platform. 
• Once a customer is ready to purchase an item or service and ‘checkout’, they will input their financial information in the purchase page. 
• The information will then be sent from the website, through the Stripe software that will verify that the funds are available (payment gateway) and process the payment before sending it to the merchant account. 
• Merchant receives funds, and a confirmation of sale is sent to both the buyer and the seller.

Stripe Protects from Fraud 

If an error occurs in the payment process (i.e. inadequate funds in the buyer’s account) Stripe will reject the transaction and the customer is notified to use a different payment method. 

Stripe also monitors for fraudulent transactions and will automatically block any transactions that look suspicious. 

Implementing a combination of spending limits and merchant controls on cardholders will help eliminate exposing your business to fraudulent activity. 

What Payments Does Stripe Support?

Stripe accepts a wide variety of payments to make the process easy for you and your customers. Accepted payment forms include:

• Cards
• Wallets
• Currencies
• Bank debits and transfers
• Cash-based vouchers
• Bank redirects
• Buy now, pay later 
• Subsidiary support

Customers can pay in-person, online, or with a mobile device. 

Who Uses Stripe? 

Stripe is known to provide strong security, and some of the best development tools in the payment processing industry– making it a highly sought after resource by online companies. If you’re interested in learning more about using Stripe in your own small-business, consider all of the successful companies that trust Stripes services– Stripe is used by large brands such as Lyft, Amazon, Shopify, and Pinterest. 

The company claims that nearly 90% of all personal credit cards have been processed via Stripe’s software. 

Chances are you’ve used Stripe in your own purchases, so why not use Stripe to power your business transactions? 

Business Models Supported by Stripe:

• Ecommerce sites
• Retail online stores
• B2B Platforms
• Software as a service
• B2C Marketplaces 
• Nonprofits and fundraisers 

How To Set Up and Use Stripe 

Setting up a Stripe Account for your business takes a few simple steps:

1. Begin by registering with Stripe to set up your account
2. Head to your inbox and verify your email address
3. Click the link to activate your Stripe account
4. Add in your business details and banking information
5. Set up your Stripe connection and select the option for ‘build a platform or marketplace’
6. Complete your Platform Profile
7. Update your settings and check that Connect is enabled on your account
8. Give your business information one final review and start making sales!

1. Register with Stripe here 
2. Verify the email address you’ve signed up with in your inbox  
3. Activate your account 

• Add business details  
• Add banking information 

1. Set up Stripe Connection 

• Select the option ‘build a platform or marketplace’ 

1. Complete your Platform Profile 
2. Update your settings 

• Check that Connect is enabled on your account and fill in your company information 
• Review your business details and start making sales!

More About Stripes Services 

Set Up Your Business with Stripe Support

As you navigate Stripe software, you’ll become familiar with all of the services and support that comes with your subscription. 

• When setting up your Stripe, you can contract with one of Stripe’s partener developers to assist in the development aspects of your software setup 
• Stripe is available in 34 different countries and can accommodate 135 currencies,  making it an excellent resource for international merchants 
• Stripe provides some of the best developer tools in the payment processing industry
• Security for buyers and sellers is one of Stripe’s top priorities making each online transaction thoroughly protected and secure 
• Stripe gives buyers the option to save their financial information with the merchant for future purchases 
• Like other ecommerce services, Stripe has fees that are applied to purchases. Learn more about Stripes transaction fees here 

Benefits of Using Stripe

Stripe helps boost sales by giving your customers more ways to pay. The flat rate pricing system makes it easy to manage your monthly expenses so you don’t have to worry about hidden fees. A customizable checkout flow lets your tailor Stripe to your business needs, and 24/7 customer support is always on hand if you have any questions about making Stripe work for you. 

Is Stripe Right for Your Business?

Freelancers and small-business owners know how important it is to streamline their online strategies to consolidate their workload. Having the right tools for your online payments is key to an efficient and growing online ecommerce. 

Stripe is a payment processing system that is easy to set up and navigate, offers reliable security for buyers and sellers, and provides service worldwide. 

Key Takeaways

Offering versatile payment options is essential to keeping your business competitive. Learn the essentials to find out how Stripe works for you:

• Stripe is a payment processing platform that lets your business safely and effectively accept online and credit card payments
• Stripe supports a wide variety of popular payment options, including credit, debit, online, and mobile
• Any business can use Stripe, from major companies like Shopify to freelancers and small businesses
• Stripe is an easy to set up processing system, and offers flat rate fees and 24/7 customer service to support your business

FAQs on Stripe

Is Stripe safer than PayPal?

Both Stripe and PayPal offer secure services that are PCI compliant, meaning they meet the standards set by the Payment Card Industry. 

Does Stripe charge a fee?

Stripe payment is a flat fee per transaction; for example online sales will cost 2.9% + 30 cents for every payment. There are no subscription fees or set up fees with Stripe. 

Do I need a business bank account for Stripe?

If you aren’t set up as a separate business entity, you can use Stripe as an individual by selecting the Individual/Sole proprietorship option.

Do Stripe payments go straight to bank account?

Stripe pays directly to your bank account, with payout availability varying based on your country and industry. You also have the option for Instant Payouts, which can be requested any time and typically arrive within 30 minutes. 

More Stripe Resources for Online Businesses

• How Do I Accept Online Payments With Stripe?
• What are the Transaction Fees for Stripe? 

FreshBooks Integrations- Stripe

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