Moving to Stripe for credit card payments

Trevor GehmanBy — Posted

* Occasionally, I like to feature software and services that we use and love here at Clearstream.

Stripe is an innovative, full-featured and all-around pain free service for accepting credit cards.

Like most companies, when we started Clearstream several years ago, we used a traditional merchant account provider for processing credit card transactions. We explored a few alternatives at the time, most notably Paypal, but nothing provided the convenience, control and customization ability that we required like a traditional merchant account. Paypal was easy to setup, and the fees were competitive, but the complexity of their API and the lack of control over transaction processing was a deal breaker for us.

While our merchant account served us well for a time, allowing us to store credit card information securely, and process transactions as needed, there were several recurring issues:

  • Fees. While initially it seemed their fees were competitive, there really was no way for us to know how much processing an individual transaction would cost us. There were additional fees for address verification, security code verification, mid- and low-grade transactions, etc. Predicting our fees with any certainty was basically impossible.
  • Monthly charges. In addition to processing fees, traditional merchant account providers usually charge a monthly fee, which, in our case, they increased several times without notice.
  • Separate gateways. In addition to our merchant account, we used two different payment gateways, each of which had their own API’s, monthly fees and processing fees.

I could write pages on everything that our merchant provider did wrong, but let me focus on what Stripe does right.

  • Upfront costs. Every transaction costs 2.9% + $0.30, which is very competitive for non-swipe transactions.
  • Incredible API. Their API is incredibly well-written, with libraries for Python, Ruby, PHP and others.
  • A unique solution for PCI compliance. I have never come across a solution for PCI compliance so unique and wonderful as what Stripe provides. By utilizing a secure Javascript token generation method, we are able to create a custom form on our website, while processing the transaction entirely on Stripe’s secure servers.
  • Flexibility like a merchant account. Stripe allows us to store credit card information for our customers securely, and process transactions as needed. The absence of this feature was a deal breaker for us when selecting a credit card processor.
  • Data portability. Stripe is pretty open about their data portability philosophy. Our old merchant provider required a contract and a myriad of forms to apply, was difficult to use, and even more difficult to stop using! At one point, we were refused access to our customer’s data because we told them we were migrating to another provider.

Stripe is a breath of fresh air in the crowded world of credit card processing.

We at Clearstream have no hesitation in recommending Stripe if you are looking to accept credit card payments for your website or application. If you’re a developer like us, it’s a great API to use — you’ll fall in love! If you’re not a developer, Stripe effortlessly integrates with Xero, Harvest, and Gravity Forms for WordPress, to name a few of our favorites. They even have a very simple solution for quickly accepting donations or payments on your website. Of all the integrations we’ve done, and of all the software and services we routinely use, Stripe is one of our absolute favorites!

  • Stephen Roberts

    Great post. Stripe looks very promising and I’m definitely interested in the JS they offer. Do you have experience with the new REST API PayPal offers and the new developer portal? PayPal seems to be making some great advances lately.

    Also, PayPal starts at 2.9%+0.30 just like Stripe, but as you have more volume, PayPal’s fees get cheaper and cheaper, down to 2.2%+0.30. It seems like PayPal may be the cheaper option over the long term and they seem to offer a very similar feature set.

    What are your thoughts?

  • Trevor Gehman

    I haven’t used Paypal’s new developer portal, and I only have limited experience with their REST API. I do know that you have to have their $30/month plan in order to use their REST API, which is a disadvantage. I do agree that Paypal has been making some advances, and you are correct, their rates do go down once you start doing higher volume. (Although Stripe does offer discounted rates as well once you reach a certain threshold.)

    However, Paypal does charge a different rate for American Express cards (3.5%), while Stripe has the same rate for every card type (2.9%). Additionally, there is a certain simplicity to how Stripe handles everything which is a welcome change from most of my experiences with Paypal and other merchant account providers.

  • Stephen Roberts

    Yeah, the $30/mo for PayPal is definitely a downer, especially for a tiny biz. I’m gonna try Stripe on one of my small sites and see how I like it.

    Do you have any more details on Stripe’s volume rates?

  • Trevor Gehman

    Let me know what you think of them after setting it up!

    Here’s where Stripe talks about it volume discounts:

    Does Stripe offer volume discounts?
    Happily! Email us at if you’re on track to charge over $1 million this year.

  • Rachel G

    Very interesting. We (PYP) switched from a bank to a local processing company about 14 months ago. That company has changed hands and the fees have gone up almost every month. A lot of this is the credit card companies and they are passing it on, but it’s impossible to know now what the fees are per transaction for each type of card and each type of transaction. It’s mind blowing to look at the statement each month and we really don’t do a huge amount, but I hate to see the fees. I wonder if this would save us money?

  • Trevor Gehman

    It would almost certainly save you money, @2388fa15cf5457a29029b5c06d23812e:disqus, assuming you process most transactions as non-swipe (either through your website or over the phone). An easy way to find out is to take your latest statement and calculate your actual fees for that month. (Include any monthly fees in that calculation.) Then, calculate what your fees would have been with Stripe using their 2.9% + $0.30 per transaction figure.

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