Stripe is one of the most popular service providers offering payment gateway software solutions for merchants. Stripe takes the process of technical integration with gateways, and makes the process easy for business owners. This post will discuss what Stripe is and how it works, and then outline the pros and cons so you can decide […]
Stripe is one of the most popular service providers offering payment gateway software solutions for merchants. Stripe takes the process of technical integration with gateways, and makes the process easy for business owners. This post will discuss what Stripe is and how it works, and then outline the pros and cons so you can decide if it might be the right choice for your company.
Stripe gives you a payment gateway that is easy to set up and use. For it to work, it combines software with POS hardware, enabling you to accept payments via credit cards and debit cards. After a customer swipes their card, the system sends an electronic payment from the issuing bank to your merchant bank, all using an Internet-enabled communication system.
Stripe combines the functionality of a payment gateway provider and a merchant account all in one. It does this by allowing full, instant access to payment processing functions without businesses being forced to open a separate merchant account, as Stripe takes on both roles.
Stripe also allows their customers (i.e. you, the merchant), the ability to customize your payment processor. This is because you can choose what features you want, depending on the needs of your business. You can even set up a subscription-based business where your customers are billed for recurring payments for products or services. Their API integration (also called Application Programming Interface) allows you to integrate Stripe’s software within your own ecommerce store or app.
Stripe is customizable, with software and hardware options allowing you to accept many different types of payment. This includes cards from most of the major credit card networks like American Express, Mastercard, Visa, and Discover. It also enables payments from several foreign credit card networks, making it compatible for international transactions for certain countries. In other words, even if your customer has their address in Beijing, you can accept payments from them for your US-based company.
Stripe can also be set up for accepting payments from mobile phones. For mobile payments, data is transmitted through an iOS or Android mobile phone, via applications like Google Pay and Apple Pay. In order to accept them, you need a POS terminal that is compatible with a feature called NFC.
NFC stands for “Near Field Communication,” and it allows for your POS terminal to communicate with Android or iPhone devices simply by the customer waving the phone in front of the NFC scanner. There doesn’t have to be physical contact between the phone and the payment terminal.
Businesses looking to accept other payment types, such as in-person payments, can customize Stripe according to their needs. Stripe includes features that allow it to integrate with other online purchasing platforms. Its software can also include add-ons such as invoicing, shipping, and order management features. We’ll discuss these more later.
Stripe’s payouts offer a very fast turnaround of about two business days for funds to hit your account. As the merchant, you get to choose your preferred payout currency regardless of the currencies used to make the payments. That means that no matter what currency your customer pays in, you can still receive payout on the merchant end in your currency of choice.
This removes the hassles of conversion. With support for over 135 currencies, you are able to accept payments from customers in countries all across the world.
Stripe’s integrated payment gateway comes pre-loaded with fraud prevention features, so you don’t have to worry about data not being encrypted and transactions not being secure. For additional security, you can purchase add-ons that apply additional verification to the checkout process before payment is made, adding an extra layer of protection for you and your customers.
One of these layers of protection adds additional authentication steps during checkout, such as Verified by Visa. Verified by Visa is part of a system called 3D Secure, and makes it easy to validate each payer is a legitimate client before payment is authorized.
Thankfully, there is no need for you to audit Stripe’s security features as their internal team has already ensured their software complies with PCI-DSS and other security standards for debit card and credit card payments. Being PCI compliant is a requirement for all ecommerce merchants, so knowing compliance is already taken care from the get-go of is a big plus.
If a charge is disputed, Stripe steps in and helps you resolve the issue by getting in direct contact with the credit card network on your behalf. For a time-strapped business owner, that extra help can make all the difference. We’ll talk more about Stripe’s support options next.
When you’re choosing a POS system and payment gateway service, customer support is critical. Without strong support, one glitch in your system, and you could miss a ton of sales. If there are issues that impair your business’ ability to accept payments, you need to be able to resolve them as quickly as possible.
Stripe’s support team is ready 24/7, so you can always get help when you need it most and keep your operations running smoothly. Their support includes phone and live chat, so you can choose the communication method that suits you best.
In addition to payment gateway integration, Stripe allows merchants the option of adding a dynamic suite of additional features to further automate your business. Here are some of Stripe’s most popular add-ons:
This feature is for payment platforms and online marketplaces that need to make payments to third parties. For example, you might have an app that connects freelance drivers with riders who need to pay for a trip. By integrating Stripe Connect with your platform, you can enable the customer to pay the driver while your platform collects a small fee. Meanwhile, accounting and legal compliance are already built in.
As another example, you might launch a platform that enables potters to sell their pottery directly to interested customers. Stripe Connect creates a way for your platform’s users to transact seamlessly with one another.
Stripe’s Atlas is designed for online entrepreneurs looking to get their business officially started. It takes the research and guesswork out of things like incorporating your company, setting up official ownership documents, getting an IRS employee ID number, issuing stock, and setting up a merchant bank account.
It even provides support after you launch, such as with templates for legal documents commonly needed after you start a business. Lastly, Atlas includes a basic Stripe account so you can start to accept payment via credit and debit cards online.
Stripe Sigma uses Java SQL to process and analyze business data. SQL means “Structured Query Language,” and is a computer programming language used to manage information in a database. Using SQL, Sigma enables automatic reporting from multiple data sources to give you insights into questions like how many invoices remain unpaid, what your sales volume was for certain time periods, and other key metrics to help monitoring and analysis of every aspect of your business.
Relay is a software API that allows you to publish products and enable ordering functions in a third-party app. Relay can also be used to offer in-app purchases in an app that you develop.
For example, you might have an online store that sells dresses. With Relay, if another company develops an app for users to find the best deals on dresses, you’ll be able to partner with them to sell your own dresses in their third-party app. For another use case, you could use Relay to sell products directly through tweets published on Twitter.
For Stripe’s basic features, the pricing scheme includes small percentage plus a flat fee for every transaction that is processed. For transactions where the card is present, fees are lower than for card not present transactions, since the risk of fraud is lower.
When there is a chargeback, Stripe charges a fee for that as well. This is because they have a cost they have to bear that is associated with each instance of a chargeback. There is also an additional fee for recurring charges once your company processes $1 million transactions or more.
Merchants also have to purchase hardware such as POS tablets, swipe card readers, mobile payment-enabled POS terminals, and barcode scanners. Depending on what type of business you own, you may not need every piece of hardware they offer.
Stripe’s payment structure doesn’t require monthly contracts, so you are free to cancel the service any time you want. In addition, there are no charges for setup, or for PCI compliance. Stripe’s products are already fully compliant with PCI standards out of the box.
Stripe is affordable, which is a huge boon for any business. The fact that they don’t lock you into monthly contracts, prevent you from having to pay for PCI compliance, and give you the ability to customize what features you want makes it a great value.
Stripe also offers total customization. Whether all you need is a simple POS, Stripe has you covered. Similarly, if you need a suite of complex tools and advanced features, Stripe gives you options.
Nothing is perfect, and Stripe comes with a few potential pitfalls. For one, they can freeze or cancel your account with little notice. While they don’t do so maliciously, there is always the possibility of your account being frozen by mistake or for the wrong reason.
In addition, Stripe is allowed to use their own discretion whether or not your account becomes risky. Ultimately, this is subjective. If Stripe decides it necessary to protect themselves from what they see as risky activity on your account, they reserve the right to hold funds or shut it down completely.
For many business owners, Stripe and its add-ons make it fantastic and affordable POS software and merchant account provider. No company is perfect, and Stripe comes with potential pitfalls. But between customization, price, customer support and functionality, it has emerged as a market leader and is a good option for merchants to consider.
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