Selecting the best payment system, be it a custom payment processing solution or off-the-shelf solution, is crucial when starting or growing your business. It dictates the efficiency of your transactions, the quality of the user experience (UX) you provide, and the accuracy of reports used for managing your finances.
Stripe is one of the most well known payment processors on the market currently. For a number of reasons, it is alluring to many businesses seeking an efficient solution to handle transactions.
However, it’s worth noting that while Stripe may suit the needs of many businesses, it doesn’t serve as a universal solution. The advantages and applicability of Stripe’s products can differ based on specific business requirements.
Reviewing the pros and cons of any product’s features is a tried and true method for decision making. Let’s review Stripe’s pros and cons together, shall we?
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Pros of Using Stripe
Easy Integration for All
One of the advantages of Stripe’s software is how easily it integrates with existing payment platforms and systems. With an array of documentation and software development kits (SDKs) for various programming languages, from Python to Java, Stripe’s API enables tech-savvy businesses to quickly add custom features or scale up.
Even those without a strong coding background can get started with a pre-built checkout experience, making it a practical solution for less technical users as well.
Robust Payment Options
Stripe supports a broad spectrum of payment methods, from major credit and debit cards including Visa, MasterCard, American Express, and Discover, to newer digital payment options like Apple Pay and Google Pay. This flexibility caters to a diverse customer base, allowing customers to use their preferred payment method at checkout, including ACH payments for bank transfers.
The wide range of payment modes supported by Stripe, can offer your customers a swift and positive transaction experience, particularly for mobile users.
Stripe caters to a global market and is available in over 46 countries. It facilitates international transactions within or between any of these countries. Assuming they’re based in one of these countries, businesses can leverage Stripe’s vast influence to offer their goods and services to approximately 31% of consumers worldwide.
So, whether you run a business in London serving Tokyo clientele or operate a start-up in Sydney catering to New Yorkers, Stripe ensures smooth cross-border transactions.
Additionally, Stripe offers Stripe Connect—a tool designed for platform businesses requiring payment acceptance, third-party payouts, or both. Stripe Connect is particularly beneficial for enterprises with international vendors or anyone building an ecommerce business based on the marketplace model.
High-Level Data Security
Stripe places high importance on data security. Stripe complies with industry standards such as the Payment Card Industry Data Security Standard (PCI DSS), ensuring a safe and secure environment for processing transactions.
Stripe also provides fraud prevention tools such as machine learning algorithms that detect and prevent fraudulent activity and unauthorized transactions. These features help businesses and customers rest easy, knowing their payment data is in safe hands.
Customizable Checkout Experience
The ability to customize the payment checkout screen can significantly improve UX. Stripe allows businesses to modify the checkout interface, ensuring it aligns with their brand guidelines and resonates with their target audience.
For non-technical users, Stripe provides pre-built checkout experiences that can be modified with minimal coding knowledge. This makes Stripe accessible to individuals who may not have coding experience but still wish to offer their customers a customized payment experience.
Ease of customization is one reason why Stripe is built into several popular business marketplace sites including Shopify, Wix, and Squarespace.
For businesses relying on a subscription model, Stripe offers Stripe Billing, a tool that (for an additional fee) simplifies the process of managing multiple subscriptions, automates billing, and reduces administrative tasks. With this tool, you can easily create, manage, and personalize your subscription offerings.
Features & Tools
Stripe offers additional features, such as:
- Fraud detection
- Advanced analytics
- Real-time reporting
- Payout timing controls
- Roles and permissions
These features can streamline business operations and reduce manual effort. For example, Stripe’s fraud detection tool, when coupled with analytics, can help businesses optimize their operations, reducing risks in hopes of improving overall revenue.
Developer Community & Support
As a business grows, the significance of customer assistance intensifies. A notable perk of Stripe is its developer community and support.
Readily available technical assistance is crucial during the initial integration and problem-solving anytime. Stripe’s community discussions, how-to guides, and reference materials can be invaluable for users across various expertise levels. However, it’s worth noting that this might not fully cater to businesses with little to no tech experience.
Cons of Using Stripe
Stripe Might Not Work Well With All Existing Systems
Payment processing is central to any business that plans on accepting payments for their products or services, i.e. all businesses. Relying solely on Stripe for payment processing can come with its own set of challenges.
For example, older legacy systems can face challenges during the integration process due to compatibility issues, leaving businesses with the opposite of a smooth and seamless integration.
And compatibility issues can raise costs. Incompatible systems require additional effort and assistance to ensure a successful integration. Businesses should evaluate their tech environment and consult with internal or external software engineering teams or directly with Stripe support to understand if Stripe will play well with their existing systems.
If not, it’s time to head back to the drawing board to look for another payment processor or call in reinforcements to build a custom solution. Custom payment processing software can provide more control and flexibility, especially for large enterprises.
Clear Function can help! If you’re feeling stuck and unable to integrate Stripe with your current payment system, book a free consultation call with our team of experts.
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When Global Services Aren’t Global
Despite its presence in many countries, Stripe doesn’t cater to every market. It is currently unavailable in approximately 69% of countries, including many European countries and the vast majority of Middle Eastern and Asian nations. Additionally, Stripe does not support merchants domiciled in Africa or Latin America.
Lack of support in these countries puts businesses aiming for a more widespread international presence at a disadvantage.
Potential Hidden Costs
Businesses should also be aware of potential challenges and fees. Especially the increased fees associated with international transactions. Stripe charges an additional fee for processing payments that require currency conversion.
Plus, there are fees for additional features and functionality such as Stripe Connect or Stripe Billing. These tools aren’t included in Stripe’s standard price and must be added on to a membership plan.
If you’re cost-conscious, be sure to consider the additional costs associated with the mission-critical features you need and international transactions during your decision-making process.
Frequent Account Suspensions
Stripe is known for its strict adherence to rules and can suspend accounts that breach its frequently updated terms of service at will. Additionally, popular business models like coaching, supplements, or dropshipping are not always supported. Be warned! If your business activities conflict with Stripe’s values, they can freeze transactions and funds in your account with little to no notice.
As part of their fraud prevention system, if your business sees a sudden surge in earnings, Stripe might put a hold on your account while they review your account and verify financial records.
Stripe does not require businesses to create a merchant account when they sign up. However, upon reaching certain sales volumes, an underwriting process is mandatory. The process of underwriting can be lengthy and requires a lot of paperwork.
Customer Support Concerns
Though Stripe provides community forums, tutorials, and documentation, businesses with minimal technical expertise might need even more support.
On top of that many Stripe merchants complain about the slow response time of Stripe’s support team, which can be an issue during critical times. When problems arise, you don’t want to be left waiting for days or weeks for the help you need.
Not Always the Most Cost-Effective
For some businesses, especially those processing large volumes of transactions, Stripe’s fees might not be the most economical. It’s essential to compare its costs with other payment processors to ensure fiscal efficiency.
Businesses should assess their specific needs and the preferences of their target audience when deciding whether Stripe’s versatility aligns with their requirements. There’s no sense in paying for more features than you actually need.
Read more on Stripe’s transaction fees.
May Fall Short in Complex Reporting Needs
Advanced reporting is crucial for understanding customer behavior and identifying growth opportunities. While Stripe offers reporting tools, it might not cater to the more intricate and specialized reporting needs of some businesses. Advanced analytics and customized reporting often require paying for additional Stripe products or adding a new third-party reporting tool to your payment process.
Is Stripe Right for YOUR Business?
The acclaim given to Stripe is well-deserved, given its array of features and its focus on user-friendly operations. However, businesses should evaluate their unique needs and long-term growth strategies. While Stripe might be a perfect fit for some, it’s not a one-size-fits-all all solution. Larger enterprises, companies with specific regional support needs, or those looking to cut costs long-term might find it lacking in some aspects. Stepping back to take a holistic view of your business’s requirements and thoroughly researching your options are the best ways to make the right decision regarding your payment processing software.
If you’re left wondering whether Stripe is a good choice for your business, book a discovery call with us! We are always happy to help.
Book a discovery call with us today!