Stripe is a powerful payment processor that enables businesses — both large and small — to accept online payments with ease. Besides enabling eCommerce transactions, however, Stripe also offers a fleet of credit card readers for processing debit and credit card payments in-store.
This relatively new offering from Stripe is known as Stripe Terminal.
In this article, we’ll explore the ins and outs of this product, including a detailed review of its benefits, features, costs, and the things you should know before buying a Stripe card reader.
Let’s get started.
Features and benefits of Stripe Terminal
The Stripe card reader offers an easy and convenient way to accept in-person payments (also known as card-present transactions) with a Stripe account. Built for modern retailers, it can help you manage all your payments (both offline and online) from a single platform.
Let’s take a look at some of its key features.
1. Unified payments
Stripe Terminal allows you to extend Stripe payments to your POS system and helps you manage both online and in-person payments from a single platform that greatly simplifies reconciliation and reporting.
2. Flexible API
3. Pre-certified credit card readers
Stripe offers pre-certified card readers that provide end-to-end encryption to enable secure transactions. These support magstripe and EMV chip cards as well as NFC contactless payments (like Google Pay or Apple Pay). In the US, currently available Stripe card readers are the BBPOS Chipper 2X BT and the Verifone P400. The BBPOS Chipper 2X BT is a mobile card reader that connects via Bluetooth while the Verifone P400 is a countertop reader that connects to the Stripe Terminal SDK over ethernet or WiFi.
4. Streamlined logistics
Stripe allows you to manage your entire collection of card readers from your Dashboard. This is especially beneficial for businesses with multiple accounts or locations. You can monitor and configure your devices remotely or order card readers directly from the Dashboard. Stripe manages the delivery of your hardware through a logistics partner.
Stripe Terminal offers a number of advantages for retailers. These include:
- Easy payment options: Stripe Terminal gives you multiple options to process card payments. You can get your customer to type in their card details or scan them safely using your device camera. You can also send online payment requests to customers via email or text messages to initiate the transfer.
- No monthly fees: Stripe is a pay-as-you-go solution with absolutely no setup cost, monthly fees, or any other hidden costs.
- Informative interface: Stripe provides you with a very informative interface with graphs, charts, and tables that helps you interpret your sales data in a clear and concise way.
- Data security: Owing to its end-to-end encryption and secure interaction with its servers, Stripe is a safe way to transfer payments. Stripe also ensures strict adherence to PCI compliance.
- Remote management: Stripe card readers will automatically update themselves periodically when connected, so you can benefit from the latest security updates or improvements without any manual intervention.
Limitations of Stripe card readers
Even though they offer substantial benefits for retailers, Stripe card readers do have certain limitations or drawbacks. Let’s take a look.
1. Not quite user-friendly
Even though Stripe card readers are designed to work seamlessly with your Stripe account, you’ll still need to program them for use. This means you need someone with coding experience and knowledge who can configure and customize them (using Stripe’s documentation) to work with your POS system.
While the API is flexible enough for developers, it’s obviously less than intuitive for the average small business owner. Although the mobile card reader can work with some third-party payment apps without coding, this will incur an additional fee for every transaction.
2. Poor customer support
Stripe has a presence on all social media platforms and also provides support over email, phone, and chat. However, users have often complained about the quality of its customer service and even found it frustrating at times.
Stripe has a reputation of holding funds out of the blue or refunding them to customers without offering any rational explanation when contacted. Some users have also complained that it can be tough to fight chargebacks even with sufficient documentation.
Stripe charges a premium (starting at $1800 a month) for dedicated customer support to businesses that opt for it.
3. Delayed fund transfers
Although fund transfers are automatic, they’re not instant. Stripe takes 2-3 business days on average — and sometimes up to a week — to transfer the funds to your bank account which can be annoying for some users.
The first payout usually takes 7-10 business days while subsequent ones are quicker. Stripe also offers users an “Instant Payout” option for an additional fee of 1% of the total transaction amount.
How much does Stripe cost?
Stripe card reader options, the mobile BBPOS Chipper 2X BT card reader is priced at $59 while the countertop Verifone P400 costs $299.
Every time you process an in-person payment through Stripe, a transaction fee of 2.7% + 5 cents will be charged. For international credit and debit cards, you’ll be charged an additional 1%, plus another 1% if any currency conversion is involved.
If you decide to go the no-code way and use the mobile card reader with preprogrammed payment apps, you’ll have to incur an extra cost between 1% and 1.3%. Also, you’ll pay an additional 1% if you opt for instantaneous payouts.
When you put them all together, the rate seems to be rather stiff compared to some other payment processors. This makes Stripe a less than ideal choice for small businesses.
Are Stripe card readers suited for your business?
The Stripe Dashboard allows you to manage multiple card readers from a single platform which makes it an ideal payment solution for businesses with multiple locations and stores. This includes restaurants, coffee shops, pharmacies, and other retail outlets.
Stripe also has impressive success stories to share about its partnership with a number of medium-scale businesses. These are mostly artists, antique dealers, gym trainers, massage therapists, yoga instructors, and travel guides among others.
However, Stripe may not be an ideal solution if you run a high-risk business. Stripe is known to be strict with such businesses and your account may face suspension if your business falls under a prohibited category (even if you may have been accepted initially).
Stripe isn’t quite cost-effective so it may not be a good option for small businesses. The transaction fees can quickly eat away your already thin margins. Plus, payouts and slow, and if you don’t have the technical know-how required to configure the card readers, you’ll need to incur the additional cost of hiring a developer to do so.
Stripe card readers are mainly intended for businesses that already use Stripe to process online payments in some form. Stripe Terminal offers a relatively simple way to extend Stripe payments to their POS systems and unify their online and offline payments.
However, for businesses that primarily accept in-person payments, Stripe is neither a cost-effective nor a user-friendly solution. With Stax, on the other hand, you can be assured of quick payouts and out-of-the-box solutions that require no special coding skills to set up.
Our subscription-based pricing ensures that the more payments you process, the more you save. Plus, there are no hidden charges, no contracts, and no ancillary fees. Contact our award-winning customer support team today to learn how you can save on credit card processing fees with Stax Pay.
To learn more about our services at Stax, reach out to us today. We will be happy to answer your questions and help you benefit from our modern payment solutions.