Stripe Merchant Account | Accepting Online Payments
E-commerce merchants looking for a seamless way to accept credit and debit card payments without having to use payment solutions from multiple companies should consider setting up a stripe merchant processing account.
Stripe is one of the better merchant service payment providers in the world with a client roster that includes the following companies:
- Shopify
- Amazon
- The American Red Cross
- Zendesk Inc
- Instacart
- Lyft
- Stack
- Udemy
- Coursera
- Accenture
- CircleCI
- Under Armour
- Blue Apron
The Collison brothers—John and Patrick started working on Stripe in 2010, after Patrick had complained to his brother about the difficulty he encountered with accepting online credit and debit card payments.
The 2 brothers developed a solution and within weeks had processed their first payment.
Today, a Stripe merchant account is a common solution for merchants looking to do business across borders because the platform processes payments in more than 135 currencies.
As a venture capital funded company, Stripe does not disclose its revenue openly, but according to industry sources the company does at least $200 billion in transactions every year.
Why Having a Stripe Merchant Account is Important
In 2010, only a broker could provide access to a credit card processor that could help you accept credit and debit card payments online.
The main options were banks and credit card companies offering poorly structured and complicated credit card payment processing services.
Most of these financial institutions were using a retail model for online businesses with no knowledge of how to leverage technology to assist these e-commerce related small businesses.
Stripe’s initial mission focused on digital card payments before pioneering into building a payment processing platform specifically for the app and ecommerce industry.
The payment platform streamlined the entire process of accepting online payments and added bonus features to make it user-friendly and effective.
Some of these features included fixed rates irrespective of the card network, anti-fraud protection as well as an application programming interface or API that permitted app makers to easily integrate card processing into their apps.
Stripe Payments was initially established as a payment processing platform that permitted the transfer of funds from a customer’s bank account into a business account.
Even though the main focus of Stripe is to provide eCommerce merchant account services for online businesses and app developers, the payment processing platform has transitioned into in-person and online sales with an expansive line-up of POS systems, credit card terminals and mobile processing.
A Stripe merchant account is incredibly easy to set-up and comes with an affordable pricing structure. Manageable processing fees, low monthly fees and low transaction fees make this a perfect choice for many smaller businesses and start-ups.
Its cutting-edge technological process has removed the cumbersome approach of opening a traditional merchant account, replacing it with an easier, faster and more transparent alternative.
5 Reasons You Should Open a Stripe Merchant Account
Fast and Simple Onboarding Process: Stripe does not require any lengthy underwriting process to approve a full-feature merchant account.
Individuals that apply online get approved within 24 hours. If further information is required prior to account approval, the merchant will be notified.
One Payment Processing System: Stripe accounts offers multiple currency payments, outlets for payment gateways, and credit card payment processing.
Even with POS systems, countertop credit card terminals, and mobile app add-ons, Stripe Payments remains one of the easiest platforms to use because it offers a single integration process for all channels.
Protective Features: While no payment service provider can boast of offering 100% security and protection, Stripe does a lot to ensure merchants are protected.
Stripe Chargeback Protection protects businesses from dishonest disputes. If a merchant faces any fraudulent dispute, Stripe covers the amount and waives dispute fees. Chargeback Protection costs 0.4% per transaction.
Furthermore, Stripe is a certified PCI Level 1 Service Provider—the highest level available in the payments industry.
It is also audited by an autonomous PCI Qualified Security Assessor (QSA).
Stripe’s basic security features are provided for all accounts at no extra cost. For more advanced fraud protection tools, business owners can use Stripe Radar.
Radar analyzes millions of credit card payments and uses them to build a behavioral data bank that predicts or unearths fraudulent activity.
Array of Customization Options: Stripe offers an extensive collection of APIs, developer tools and shopping cart integrations for ecommerce customization.
The only drawback for these features is that they require someone with good coding skills. If a merchant has zero coding skills, there is always the option to employ the services of a developer who does.
Global Payment Solution: As mentioned earlier, Stripe is an international payment solution to accept credit and debit card payments.
While other platforms are restricted to operating only within their home countries, Stripe allows merchants to offer local payment methods to customers, in spite of their geographical locations, and then receive payouts in their preferred currency.
For instance, an American can sell a product in England or Japan and get paid in British pounds as well as the Japanese Yen and then go ahead to withdraw the proceeds in dollars.
How Stripe Merchant Accounts Work
Stripe Payments is an independent sales organization (ISO). In other words, it does not really process transactions, rather the payment service provider simply collects and forwards transactions to financial institutions and follows up to ensure the process is completed.
Stripe does this by allowing platform users to sign up as sub-merchants under their merchant account.
This simplifies the card process and allows users to collect payments instantaneously. All charges pass through Stripe’s merchant account which is why the ISO bears the full cost of fraudulent transactions.
Requirements for Opening a Stripe Merchant Account
- List of approved countries
- Government Issued Identification (driver’s license or passport)
- Bank account in approved transfer currency (Not a virtual account)
- Taxpayer or Employer Identification Number (EIN)
- Valid physical address to receive mail (Not P.O. box)
- Phone number in location country
- Functional website showing products or services
Integrating a Stripe Merchant Account With an E-commerce Website
- Even though coding work is required to use Stripe’s developer tools, setting up a basic Stripe account is straightforward–visit Stripe’s website and click on the “Start Now” button.
- You will be redirected to a “Create Your Stripe Account” page where you can provide your full name, email address, and country as well as choose a password.
- Click on the link provided in the Stripe verification email to confirm the email address.
- Provide the information required to activate the Stripe merchant account. This includes: type of business, merchant account information, fulfillment details and a recent credit card statement.
You will usually receive an email confirming that the account has been approved within 24 hours, perhaps a bit longer.
Point to Note: Stripe uses an accelerated process to get e-commerce merchant accounts approved quickly.
It is important to be upfront about your business to avoid problems with your account in the future.
With regards to setting up a Stripe account with your ecommerce website, two key pairs are needed for Stripe’s REST API.
- One for testing
- One for going live
They are located in the Stripe Dashboard under Developers —> API Keys.
Once the account is activated, the merchant can toggle between Test and live keys.
Stripe works well with mainstream server-side languages and frameworks with attention given to Java, Go, .NET, PHP, Ruby and Python.
If you are using a default option like Stripe Checkout, just copying and pasting the relevant lines of code is all that is required.
Enjoying the Full Benefits of a Payments Aggregaotor
A Stripe e-commerce merchant account offers an affordable and convenient way for businesses to accept payments, but for merchants to fully enjoy these benefits, they must abide by the rules.
It is important for a merchant to read and understand the requirements of committing to this payment service provider to avoid having funds frozen or an account terminated.
Opening a Stripe merchant account is not difficult, but merchants need to understand the rules and regulations to avoid unpleasant surprises.
Avoiding Account Termination
If a vendor fails to abide by the service rules, Stripe has the right to clamp down on a merchant’s funds indefinitely or terminate the account without any prior warning.
Here are 2 main reasons why Stripe e-commerce merchant accounts are terminated.
One reason is because of excessive chargebacks. Chargebacks are not something to take lightly. They can ruin an online business overnight if not managed properly.
Payment processors that fail to keep chargeback rates within manageable percentages risk the wrath of banks and credit card networks. This is why payment processors like Stripe are willing to drop businesses at a moment’s notice once their chargebacks spiral out of control.
Secondly, when a vendor fails to deliver as promised or operates in an industry notorious for fraud, the onus is on the payment processor to issue refunds if things go awry.
Stripe and other payment service providers are always quick to sever ties with merchants that show a high level of financial risk because it increases their chances of losing money.
Here are some tips to remain on the safe side and avoid Stripe merchant account termination.
- Do your due diligence and ensure your business is not in a high-risk category. Stripe does not provide high-risk merchant account services.
- Ensure you operate your business within network rules, keeping up with PCI standards as well as data card security essentials.
- Use Stripe services as stipulated and do not deviate down the line.
- Keep chargeback rates under 1% by working with chargeback and mitigation experts.