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Thanks to its advertised simple flat-rate pricing structure, Stripe is regularly recommended for small businesses. But although transparent, calculating costs with Stripe isn’t that straightforward for most businesses. And that’s because payments outside of debit/credit cards and digital wallets incur extra fees. On top of that, you’ll have to deal with even more fees for invoicing, subscriptions, automated tax collection, and more.
Stripe’s fee structure is one of the least competitive I’ve seen. Sure, Stripe’s pay-as-you-go structure is convenient for new, small, and low-volume businesses. However, once you start processing more payments, this convenience isn’t worth the above-average fees.
Join me as I take a deeper look at Stripe’s pricing structure and uncover exactly what you get for your money.
A Quick Note on Stripe’s Pricing Structure
Stripe offers two pricing structures – a basic flat fee and a customized plan. The flat fee structure is available to most Stripe customers, while the custom plan is reserved for large businesses. Stripe doesn’t give any criteria for what it considers a “large enough” business, unfortunately. While I’ve included a section below on fees that apply specifically to merchants paying for a custom plan, everything else refers to the flat-fee structure plan.
Stripe’s Core Transaction Fees
Stripe uses a flat rate fee structure with no monthly fees or setup costs. You’ll also pay for every additional feature you use on a per-transaction basis (i.e., you’ll effectively pay for payment processing on a pay-as-you-go basis). This fee structure includes a long list of core features at no extra cost, so it’s easy to see why Stripe is such a popular choice for small businesses on a limited budget.
Here’s a breakdown of the core transaction fees you can expect to pay with Stripe:
2.7% + 5¢
Tap to Pay (in-person contactless) payments
2.9% + 30¢
International payment card
Between 80¢ and 2.95% + 30¢ depending on card type, plus additional 1.5%
Payments in currency other than $USD
Additional 0.08% per successful card charge
ACH Direct Debit
0.8%, capped at $5, plus an additional $1.50 per instant bank account validation
$1 per transaction
$8 per transfer
$5 per check
These fees don’t seem particularly terrible. If you accept a $100 transaction through your e-commerce store, you can expect to pay $3.20 in fees (before adding additional Stripe services). Its card processing fees are above average, but the cost is still manageable – even for new and small businesses. Adaptive Acceptance (a machine-learning-powered tool that improves transaction authorization rates) has a small enough fee that makes it a no-brainer if you’re worried about low authorization rates.
However, businesses that handle multiple currencies should note that they will effectively pay double the advertised per-transaction rate due to additional fees. Most processors only charge an additional 1% for international payments, so the combined 2.5% charged by Stripe is well above average.
Another issue that Stripe doesn’t address is that processing international payments is typically considered a high-risk activity. Yes, you can sign up for Stripe for free and without the usual required underwriting. However, international payments can appear fraudulent without proper context, putting you at risk of account holds or deactivation.
If I were to take many international payments, I would sign up with PaymentCloud instead. It specializes in high-risk merchant accounts and allows you to negotiate your fee structure. Since Stripe doesn’t offer customized rates for small to medium-sized businesses, you’ll likely strike a better deal with PaymentCloud.
You also need to consider the cost for failed, bounced, or disputed transactions.
Failed ACH Direct Debit payment
$4 per failure
ACH Direct Debit dispute
$15 per dispute (refunded if successful)
$15 per dispute (refunded if successful)
$15 per cheque
These fees are some of the lowest in the industry. While it’s hard to pinpoint an average chargeback fee, most payment processors that we’ve reviewed charge around $20-$30.
Additional Stripe Fees
Most businesses will need more solutions than just payment processing, and Stripe charges additional fees to cover these. Some services are included, such as an automatic card updater and 3D Secure authentication for online purchases. However, other nice-to-haves come at a premium rate.
You’ll receive Stripe payouts on a 2-day rolling basis, or you can choose to receive your money weekly or monthly. High-risk businesses will have to wait longer with a 14-day payout speed. All payment processors charge extra for faster payouts, and Stripe is no exception.
Instant payout (within 30 minutes)
1% of payout total, minimum fee of 50¢
ACH Direct Debit two-day settlement
This fee structure is pretty standard. Most payment processors I’ve reviewed will either charge a flat monthly fee or a percentage for faster payouts. With a default payout speed of 2 days, you probably won’t need to pay these fees unless you need to maintain a rapid cash flow.
Stripe is one of the few payment processors that offer buy-now-pay-later (BNPL) services, like Klarna, Afterpay, and Affirm. These services are becoming increasingly popular but also have incredibly high fees.
Fee Per Payment
Affirm (Pay in 4 & Instalments)
6% + 30¢
Afterpay (Pay in 3 or 4)
6% + 30¢
Klarna (Pay in 4)
5.99% + 30¢
2.99% + 30¢
Note that these fees are paid per payment, not per sale. So, to compare these services to Stripe’s fees, let’s say your customer uses Affirm to split their $100 purchase into four payments of $25. For every $25 payment, you’ll pay $1.80 in fees, losing $7.20 of your $100 sale. That’s over twice the cost of Stripe’s standard per-transaction rate.
While BNPL services don’t typically disclose their merchant fees, those often range between 2% – 8%. If this is a service you want to offer, it may be worth getting quotes from other processors to see if you can get a better deal.
Stripe offers two invoicing options. You can use Stripe’s Invoicing tool, and you can generate post-payment invoices. Post-payment invoices are self-explanatory – they’re just invoices you generate after customers pay via a payment link or a Stripe-hosted payment page.
Stripe’s Invoicing tool also has two tiers – Starter and Plus. Plus gives you additional features, like customer portals, automatic payment collection, and auto-reconciliation.
Stripe Invoicing (Starter)
0.4% per paid invoice
Stripe Invoicing (Plus)
0.5% per paid invoice
0.4% per invoice, capped at $2
As with the rest of Stripe’s pricing, it’s affordable for smaller businesses but loses value as your business grows. It’s decent for occasional invoicing, but you’ll likely get a better deal with another processor if you send invoices regularly. Stax, for example, is an excellent choice for high-volume businesses, as invoicing is included in your monthly fee.
Stripe’s Billing tool is a subscription management service. Like Invoicing, it has a basic Starter tier, with more features available on the pricier Scale tier.
Stripe Billing (Starter)
0.5% per recurring payment
Stripe Billing (Scale)
0.8% per recurring payment
As with Stripe’s Invoicing tool, it’s not terrible if you’re just getting started with your subscription-based business. However, as your business scales, you’ll want to consider an alternative payment processor that includes these tools at no extra cost.
Stripe Tax automatically calculates and collects sales tax, VAT, and goods and services tax due on each sale. This works for both US and international taxes. It also automates your tax filing by generating tax reports you can easily export.
Stripe Tax (<$100,000/month transaction volume)
0.5% per transaction in registered locations
Stripe Tax (>$100,000/month transaction volume)
0.4% per transaction in registered locations
It’s undoubtedly a useful tool, particularly if you have a larger business operating across multiple states or countries. At the risk of repeating myself too many times, I’ll say it once more – if your business is large enough to need this tool, you’ll get a better processing deal elsewhere.
Stripe already includes many security features with your standard per-transaction fees. As you’d expect, you can also pay more for enhanced security features. These include point-to-point encryption (P2PE), ID verification, chargeback protection, and Stripe Radar for Fraud Teams, the processor’s proprietary fraud prevention tool powered by machine learning.
You’ll get the basic version of Stripe Radar for Fraud Teams with your plan. This tool allows you to set custom rules, similar to Authorize.net’s fraud detection and prevention suite.
5¢ per authorization
Stripe Radar for Fraud Teams
2¢ per screened transaction
ID document and selfie verification
$1.50 per verification
ID number lookup
50¢ per lookup
0.4% per transaction
The above fees are a small price to pay for extra security, particularly if you have a mid- to high-risk business. Chargeback protection, in particular, is handy if you have a higher-than-average chargeback rate. This feature is effectively insurance for chargebacks – Stripe covers the disputed amount and any associated fees.
The last major feature I must mention is Stripe’s Financial Connections tool. You’ll have to use this to accept ACH payments or connect to a customer’s financial account.
Instant bank account verifications
$1.50 per successful verification (verification via micro-deposits is free)
Account balance retrieval
10¢ per successful API call
Verify bank account owners
$1.50 per successful verification
Account transaction feed
30¢ per institution per account holder per month
Custom Plan Fees
Finally, it’s worth noting that merchants on custom plans will pay different rates for certain features. While the custom plan offers different per-transaction pricing for payment processing, some additional fees are standardized. Curiously, you’ll have to pay for features that are included for free in the standard plan, such as 3D secure authentication and Stripe Radar.
3D Secure authentication
3¢ per attempt
Card account updater
25¢ per update
5¢ per screened transaction
Stripe Radar for Fraud Teams
7¢ per screened transaction
Stripe says its custom plan is for “businesses with large payments volume, high-value transactions, or unique business models.” But particularly in light of the fee structure I’ve outlined above, I wouldn’t recommend using Stripe if you run a larger business. If your business is at the point where it qualifies for this plan, you will get more for your money elsewhere.
If this sounds like your business, then my top recommendation is Stax. Thanks to its subscription-style pricing, Stax can potentially save your business up to 40% on your processing bill. Instead of paying an elevated flat rate per transaction, you’ll pay the wholesale interchange rate plus a few cents. All the software you need (except a few add-ons) is included in your monthly fee, so you won’t have to worry about your costs spiraling out of control.
Additional Stripe Features and Fees
Stripe offers far more features (and associated fees) than I have space for here. These include custom domain names for payment pages, automated accounting services, custom data reporting, card issuing, and more. As with most of Stripe’s features, these are optional, but they do make Stripe increasingly unaffordable if those features are necessary for your business.
Why We Don’t Recommend Stripe’s Flat-Rate Pricing
According to a study conducted by S&P Global, more than half of consumers use their debit card as their primary payment method – and the higher a consumer’s household income, the more likely they were to use their debit card over a credit card. Debit cards have a significantly lower wholesale interchange rate (the rate charged by card networks) than the flat rate charged by Stripe.
With that in mind, using Stripe’s flat-rate pricing doesn’t make sense unless you have no other option. You’ll end up paying a significantly higher markup on the majority of the cards that you accept. The only exception is if the bulk of your sales come from premium credit cards with a higher wholesale rate than the charged flat rate.
Don’t get me wrong – I don’t think that flat-rate pricing is completely pointless, nor that Stripe has nothing to offer. However, in this case, the biggest benefit of flat-rate pricing comes from Stripe itself.
Stripe’s lack of monthly fees, transparent pricing, and a “most features are optional” pricing structure is why it’s a good choice for limited-budget businesses, not the flat-rate pricing model. It’s also convenient for new businesses because they can set up their merchant account without underwriting.
The Best Stripe Alternatives
Given that few businesses can benefit from Stripe’s pricing model, I recommend the following alternatives.
Leaders Merchant Services: Best for Budget-Conscious Businesses
Stripe’s higher-than-average pricing isn’t ideal if you take more than the occasional payment, which is where Leaders Merchant Services (LMS) comes in. LMS’s low markup, per-transaction, and monthly fees are great when you have a limited budget and can’t afford large upfront fees. With LMS, businesses can choose to pay extra for the software they need, helping those with less complex needs keep their costs low.
If you’re worried about your chances of being approved, LMS might be able to help. With an impressive 98% approval rate and same-day setup, LMS is likely to accept new businesses, those with poor credit, and those classified as medium-risk.
Like most processors, Stripe doesn’t accept merchants operating in specific high-risk industries such as gambling or CBD products. If, at any point, Stripe feels that your business is too risky, it can terminate your account without warning. This will put your business on the MATCH list, a list of terminated merchant accounts maintained by Mastercard – further limiting your future processing options.
You can avoid this by using PaymentCloud, our top pick for high-risk merchants. While PaymentCloud charges a higher flat rate than Stripe, it’s worth it for the security you get. You’ll also get chargeback protection and a customizable fraud detection and prevention suite (two tools that Stripe charges extra for). PaymentCloud also promises to help you win up to 70% of disputes – ideal for high-risk merchants with a higher-than-average chargeback rate.
While most payment processors charge for their services via an interchange markup, Stax doesn’t. Instead, you’ll pay the wholesale interchange rate and a small transaction fee per sale on top of a flat monthly fee. Admittedly, this payment model might not be as affordable as Stripe’s for smaller businesses. However, if you earn over $8,000 a month, youcan save up to 40% with Stax.
That’s because, unlike Stripe, Stax doesn’t charge extra fees for core software tools like invoicing and subscription management. The only additional costs you’ll pay cover optional extras such as same-day funding, custom branding, and accounting automation. And although Stripe’s hardware is exclusive, Stax allows you to keep using your devices even if you decide to change processors.
As your business grows, you’ll find that the cost of Stripe starts to outweigh the benefits. If this sounds like your situation, then Payment Depot is a great choice for you. Payment Depot offers a fairly priced subscription-based pricing model that can help you save hundreds of dollars each month on payment processing fees. Like Stax, you’ll pay a flat monthly fee, no interchange markup, and a small transaction fee, and you’ll get all the software you need at no extra cost.
That said, you won’t get the same proprietary software that Stax offers. Because Payment Depot is a more affordable subscription-style service, you’ll get third-party software options like Authorize.net instead. But the trade-offs are negligible – each handpicked tool will provide the same great service you’d expect from a Stax subsidiary.
Stripe’s flat-rate pricing structure and accessibility make it a decent choice for new and small businesses or businesses that only process payments occasionally. Given that you pay a flat rate per transaction, and all additional features are charged per transaction, Stripe presents a budget-friendly, pay-as-you-go approach to payment processing.
However, as your business grows and you start accepting more payments, Stripe becomes increasingly unaffordable. In particular, those operating in high-risk industries will be at a disadvantage. As Stripe allows you to sign up without underwriting, any slightly risky transaction might put your account at risk of immediate termination.
With that in mind, I can’t recommend Stripe as a payment processor for any established business. You’ll get a far better deal with any of our suggested Stripe alternatives, no matter your business type.
Yes and no. Stripe and PayPal are both payment processors, but only PayPal can be used as a digital wallet. Essentially, whenever money is paid into your Stripe account, you’ll have to wait for payout until you can use it. However, I don’t recommend using either of these as your payment processor. Their flat-rate pricing models mean they both have higher-than-average fees that put most businesses at a disadvantage.
How do I reduce my Stripe fees?
There are two main ways to reduce your Stripe fees. The first is to apply for customized pricing. To do so, you must be handling a large volume of transactions or high-value transactions or have a “unique business model.”
The second is to read our list of top 10 credit card processors in 2023. No matter your business type, size, or industry, our curated list will have a payment processor that can save you a significant amount over Stripe’s fees.
Emma is a freelance content writer who specializes in thoughtful and insightful blogs and articles. Her main passion is the intersection of human behavior and modern technology, particularly in the context of marketing and cybersecurity. Outside of work, Emma loves video games, superhero movies, crochet, and cuddling her German Shepherd.