The mythical Terror from Tokyo was recently booted off Stripe’s online payment processing platform for his terrifying menace. Godzilla is no longer able to collect online donations from his loyal fan club whose members admire his fire-breathing rampaging ways.
You may find Godzilla terrifying or a small thing of fiction, but an examination of Stripe and its processing fees are merited.
People use Stripe to accept online credit and debit card payments because of the convenience.
The signup process takes minutes and you are off to accepting payments for your merch championing the giant lizard-like creature almost instantaneously.
For most businesses, Stripe charges 2.9% and $0.30 per successful credit card charge. For debit cards, Stripe charges 0.05% and $0.22 per successful charge.
For big ticket accounts with 7-8 figure volume, we hear Stripe charges as low as 2.2%, but this has never been confirmed.
For non-profits like a campaign to anoint Godzilla King Terror Creature of the World, the Stripe processing fees are more opaque. On its website, Stripe promises discounted fees for nonprofit organizations but never discloses an exact rate.
These numbers are meaningless without context. Let’s look at a hypothetical.
Say Godzilla’s fan club collected $1 million in donations. Stripe would be billed $500 by the payment processors and Stripe would charge the Godzilla fan club a cool 2.9% or $29,000. Not considering the additional $0.22 flat fee for each “swipe,” Stripe is pocketing $28,500 gross excluding other related expenses on Godzilla’s million-dollar fan club.
Not a bad chunk of change … it would be a shame if something happened to this grift, sorry, “business model.”
Whether you are a fan of Godzilla or not, Stripe can shut you down at the spur of the moment. Godzilla got blackballed because he crossed some arbitrary line on a terms and conditions web page.
Fire-breathing creatures aren’t the only targets. We were recently shut down after using Stripe to collect payments on Quora because we were considered “high risk.” We were never told why and just kicked to curb with five days to find another payment solution.
Payment processing is our bread and water, so finding an alternative was not a problem. What if, however, your whole business was built on online payments, and you had just five days to find a replacement or risk having your entire income cease?
Yes, Stripe is convenient. You don’t have to spend 15 minutes on the phone in an initial signup process to get started. But not investing time on researching a payment solution can bite you in the ass later.
Ask Godzilla.
Ethical Pay Pro is a payment processing consultant. If you don’t want to play with fire with Stripe processing fees, tap here for a free consultation.