How Does Stripe Make Money?

January 10, 2020

January 10, 2020

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Stripe is one of the world’s most popular options for credit card processing, payment gateways, and merchant accounts for business owners. But how does Stripe make money on the services they provide? Fees One of Stripe’s primary sources of revenue comes through the fees they collect from merchants. We’ll discuss these first. Credit Card Processing […]

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Stripe is one of the world’s most popular options for credit card processing, payment gateways, and merchant accounts for business owners. But how does Stripe make money on the services they provide?

Fees

One of Stripe’s primary sources of revenue comes through the fees they collect from merchants. We’ll discuss these first.

Credit Card Processing Fees

Credit card processing fees, which vary depending on which country the transaction is occurring in, are charged on every single transaction that is completed. These fees are deducted from credit and debit card transactions before the revenue is deposited into your merchant bank account. While they are small, they add up for a company that helps merchants process many thousands of transactions each day.

Disputed Charge Fees & Chargeback Fees

Another type of fee Stripe charges merchants occurs when a charge is disputed, or a customer tries to reverse a transaction that has already been processed. These are called disputed charge fees and chargeback fees. Sometimes these are associated with fraudulent transactions, but other times they’re simply the result of a mistake.

Products

Stripe also makes money off of the subscription fees they charge for all of the different products they sell. This next section will outline some of their add-on products, and how they make money for Stripe.

Stripe Connect

For example, Stripe Connect is a premium product that users of Stripe can pay extra for. It essentially provides a platform for businesses to open online marketplaces, enabling third-party buyers and sellers to transact with one another. For merchants looking to run a service similar to Ebay, Stripe Connect makes it easy to offer buying and selling features to your customers.

Stripe Atlas

Stripe Atlas is another popular Stripe product. This product essentially gives business owners everything they need to get started and open up shop. Entrepreneurs can use Stripe Atlas to incorporate their US-based company, set up their first business bank account, and get guidance on hard-to-understand legal and tax issues.

Premium Support

Premium tech support is another way that Stripe makes money. This is a customized support plan for businesses that are growing at a rapid pace, or are extremely complicated for one reason or another. Essentially, for a “pro plan” premium fee, you can get additional guidance and support from Stripe’s business experts to make sure your businesses stays on track.

Final Thoughts

Metrics show that most of Stripe’s net revenue comes from credit card and debit card processing fees charged on transactions at merchants using the Stripe dashboard. However, that’s not their only income source. Premium customer support and add-on products are another revenue stream for them. With payments totaling billions of dollars being processed daily, however, the bulk of Stripe’s annual profits come from all those fees charged on credit card transactions.

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