Stripe Merchant Payment Processing for Online Businesses
In the simplest terms, Stripe is a payment processor that supports the electronic transfer of funds from an issuing bank (customer’s bank) into an acquiring bank (merchant’s bank). A Stripe merchant tends to be a small business, processing under 25K in monthly volume that use Stripe payments for online bankcard acceptance.
Stripe is a third-party processor that allows merchants to accept multiple online bankcard payment methods with little to no monthly fees.
A Stripe customer doesn’t need to apply for a direct merchant bank account. A direct merchant account through a payment processor usually requires a lengthier underwriting process before being able to accept payments. Stripe bankcard payments provide more of an aggregator model for their sub merchants which allows for faster approvals on lower risk business types.
Stripe merchants are granted instant access to accept payments through their PayFac style payment platform. Customers apply via a boarding UI and online application interface when they sign up with Stripe.
Stripe Customers Accepting Payments
Stripe merchants can accept many online bankcard payment types, including MasterCard, American Express, JCB, Visa, Discover, Diners Club, China Union Pay, debit cards, checks, wire transfers, Google Pay and Apple Pay, among many others.
The payment service provider processes payments in more than 135 currencies, allowing Stripe merchants to charge customers in native currencies and withdraw payments in their preferred currencies.
Methods Stripe Merchants Use to Accept Payments
Stripe Checkout: A pre-built upload page optimized for one-time purchases and subscriptions. Merchants can also customize it for brand visibility and awareness.
Stripe Elements: This is a customized toolkit that allows merchants to build unique custom payment forms for desktops and mobile devices.
A merchant can successfully collect a customer’s information without handling sensitive data with Stripe Elements. The card details are truncated and converted to a representative Token which is sent to their well-secured servers.
Stripe Invoicing & Billing: With Stripe invoicing, Stripe merchants can send customized invoices requesting payment from customers.
Stripe Billing allows businesses to create repeated, tiered, scheduled, promotional and user-oriented based payments.
In-Person Payments: Stripe offers a slew of mobile terminals and card readers for people to make card payments physically.
In addition, Stripe online bankcard payments provide cutting-edge development tools for businesses to build their own point-of-sale systems (POS) using their own hardware.
Stripe Sources: This application programming interface (API) allows Stripe merchants to accept a variety of online payments with an easy integration.
Supported payment methods through a single API include Alipay, Giropay and Bancontact.
Stripe merchants can also use this API to build customized checkout forms.
Stripe Merchant Payment Methods
Stripe accepts an array of different payment methods. This makes it a popular and convenient choice for vendors looking to do business internationally.
This payment processing platform also stands out for partnering with competitors, particularly offshore popular payment types located in the European Union and China.
Stripe’s API supports the following international payment methods used by millions of people:
- Google Pay
- Microsoft Pay
- Apple Pay
- WeChat Pay
- Click to Pay
Stripe online bankcard payments also support the following local payment methods in popular markets:
- ACH debits
- ACH credit transfers
- Pre-authorized debits in Canada
- Grab Pay
- SEPA Direct Debit
- Przelewy24 (P240
- Bacs Direct Debit
These payment methods change frequently. For updates on supported payment types, always check Stripe’s website.
Credit Card Processing for Stripe Merchants
Processing payments with Stripe is seamless because the platform has a direct integration with mainstream credit card networks.
It optimizes the routing paths of card networks and whittles down the likelihood of shopping cart abandonment.
Stripe merchant transactions are automatically processed through different optimizations which makes it easier for cards to be quickly accepted.
Cards that are not approved are not rejected outright; they are automatically routed through other connections before a final decline.
For Stripe merchants located in the United States, Stripe deposits and processes payments on a 2 working-day rollover basis.
This means that payments processed on Monday will be available in a merchant’s bank account by Wednesday. Funds made available by Wednesday will be in the merchant bank account by Friday.
Regardless of the payment method used, payments will generally be processed within this time frame.
4 Ways Stripe Merchants Use Payment Tools for Business
Stripe merchant accounts also use a payment gateway and a payment processor to process transactions online.
The gateway ensures that a customer’s credit card payment information is securely captured while the processor processes the online transaction.
Funds from a customer’s issuing bank are routed to Stripe’s acquiring bank. Ultimately, transaction fees are deducted from the total sum paid, the balance is then forwarded to Stripe as the payment service processor and then forwarded to the merchant’s bank account.
Stripe provides a user-friendly way to do business online by merging gateway functionality and payment processing into a single product.
Here are 4 ways Stripe merchants can use these functionalities for offline and online transactions.
Invoicing and Billing
Stripe provides an excellent alternative for independent contractors and freelancers that use invoices to facilitate their payments.
These online invoices can be generated and sent from Stripe’s dashboard. Business logos, tax add-ons, line-by-line breakdowns as well as a secure payment link are features also included.
Stripe Checkout was created for users with no programming experience in mind.
The feature allows Stripe merchants to build customized payment pages without having to write a single line of code. All that is required is for users to know their way round their website’s content management system (CMS).
Everything is set up for a merchant to simply cut and paste the appropriate lines of code and follow that up by choosing from several pre-installed unique templates.
Stripe Terminal allows merchants to accept in-person sales by integrating physical processing hardware with payment stacks. BBPOS Chipper 2X BT and Stripe Reader M2 are bluetooth mobile compliant systems that allow magstripe, EMV and NFC payment methods.
The terminals are sold by Stripe at affordable prices. All payment data from in-person and online transactions are accessible from the dashboard.
For merchants to realize the full potential of Stripe, they need to be able to write code or at least find a developer that can do it for them.
Stripe’s in-house developers are also available to assist merchants if they experience any difficulties finding one on their own.
Stripe provides a reservoir of developer resources for all the features merchants would want to include on their site. The information is available on Stripe’s website. This is a great resource for merchants who have an idea of the direction they want to go before they begin.
Security, Integration and Account Management
Stripe online bankcard payments protect business owners from fraudulent transactions via Radar-a machine-learning anti-fraud system that processes millions of credit card transactions, differentiating legitimate purchases from fraudulent ones.
An additional layer of protection is called 3D Secure. 3DS passes customers through a verification process before they are allowed to make a purchase.
From a personalized dashboard, Stripe merchants can set up particular roles for their team members and monitor payment processing activity, i.e., everything from deposits to disputes and refunds.
All this activity can be tracked from Android and iOS mobile apps.
The Stripe dashboard also lets business owners generate financial reports, customize analytics and charts, export data and restructure workflows.
Stripe’s in-built features also makes it easy to sync this data with accounting software like QuickBooks, Sage and Bitrix24.
Software solutions like Xero, Shopify, Slack and Shipstation, as well as 100s of other platforms. From invoicing software to ecommerce plug-ins that can easily integrate with Stripe Payments, Stripe has many options.
Stripe Merchant Payments and Chargebacks
When the cardholder lodges a dispute, Stripe adds the transaction claim with a chargeback fee underneath Payments in the dashboard. They also provide the reason for the chargeback as well as details of the transaction.
The payment is reversed back to the cardholder immediately.
For a merchant in the United States, the payment amount along with a dispute fee of $15 is removed from the merchant’s account balance.
The $15 is meant to cover costs of processing the charge, but the fee is returned if the dispute is successfully contested.
How Stripe Merchants Can Contest Disputes
When a customer disputes a transaction, Stripe merchants can either accept the dispute or submit documents contesting the dispute.
If a merchant chooses to object to the dispute, the merchant responds by clicking Submit Evidence in the Stripe dashboard.
Important information to support a merchant’s position may vary based on the reasons given for the dispute, but documents submitted to contest a chargeback dispute usually include:
- Compelling proof that the product or service was provided
- Proof that the customer authorized payment
- Copies of return and refund policies published on e-commerce website
- Tracking receipts showing that the goods were shipped and successfully delivered
- Proof of back and forth communication between the customer and Stripe merchant
This information can be submitted all at once, which is nice. Merchants should always ensure they have back up copies of everything they upload.
When these documents are submitted to the Stripe dashboard, they are forwarded to the acquiring bank for scrutiny.
A merchant’s bank can end the dispute if the evidence is compelling.
However, if this is not sufficient, the acquiring bank passes along the evidence to the customer’s bank to review and make a decision.
At no point is Stripe involved in the decision making process of resolving a dispute.
Stripe Chargeback Protection is in place to protect merchants from unjustified disputes. When it is determined that a business is the victim of friendly fraud, Stripe occasionally waives the disputed fees and possibly even covers the amount being disputed in unique scenarios.
4 Smart Ways of Avoiding a Stripe Chargeback
A $15 chargeback is only the beginning of a Stripe merchant chargeback. Other losses a merchant can incur are processing and transaction fees, shipping charges, the transaction amount that needs to be fully refunded and product losses. Stripe merchants can also be shut down and have their services terminated. If this happens, these businesses turn to high-risk payment providers like SecureGlobalPay and end up applying for a direct MID.
Rather than contest every dispute, here are 4 smart ways Stripe merchants can avoid chargebacks.
Businesses need to stay in touch with customers. Customer service reps need to reach out quickly to disgruntled customers and issue refunds.
Refunding the disputed amount and asking the customer to withdraw the chargeback claim is the fastest way to solve the problem before it spirals out of control.
Provide sufficient information. Business owners selling products should provide detailed and clear descriptions of what they are selling.
They should provide clear pictures of items from multiple angles along with their exact measurements.
Refund and return policies as well as estimated billing and shipping costs should also be clearly stated.
Communication is crucial. When a customer places an order, merchants need to stay in touch from start to finish. Always provide shipping and delivery updates as well and keep customers in the loop in case of any unexpected delays.
Always Be Available. Most customers will reach out to a Stripe merchant before filing a transaction dispute. Ensure that there are different outlets for the customer to contact 24/7.
Customer support representatives should always remain cordial, calm and collected under pressure. Respond knowledgeably to any questions about refund and return policies.