Stripe and Security: What are Advantages of This Payment Provider?
Over the years, the security and safety of payment processing services have been a serious concern for many entrepreneurs, business managers, venture capital firms, and investors. These practitioners know that when customers are not comfortable with how they pay for their purchases at an online store or a physical shop, they are likely to look for a better, faster, and more secure payment experience at alternative merchants. And a loss of customers normally leads to a fall in revenue, reduced profit for the business, and less money for its owners.
Since its launch in 2010, Stripe has grown into one of the most popular payment processing services worldwide. Its clients include many startups and global companies. Examples are Booking.com, Shopify, Statista, Salesforce, Klarna, Zoom, Slack, Alipay, WeChat, Apple, iDEAL, Amazon, Nord Security, Reddit, Twitter, Pinterest, and Google.
Following its fame, Stripe has received multiple reviews. We also have a complete overview of Stripe’s payment solutions, pros and cons, pricing, and other features. But do all these things mean that Stripe is the best or most secure payment platform for any business? We will answer this question in this article.
Is Stripe a Safe and Secure Payment Service?
One of the top priorities for Stripe is payment security. The company understands that enabling businesses to create happy and loyal customers through the provision of convenient and seamless checkout experiences is not a task to joke with. Hence, it strives to maintain the best payment security standards worldwide by using state-of-the-art tools and powerful technologies, including artificial intelligence. So, yes, Stripe is a secure and safe payment service provider.
Moreover, Stripe’s millions of customers, which include freelancers, e-commerce sellers, digital nomads, fintech startups, and small businesses, do not use the service for anything. The brand has gained their trust by professionally supporting them with the physical and digital tools that they need to accept several payment methods, such as prepaid cards, debit cards, credit cards, virtual cards, pay-by-link, e-wallets, and wire transfers.
How Secure and Safe Is Stripe?
To answer the question of how secure Stripe is, below are the various aspects in which the company has proven to be one of the best payment processors and safest digital business infrastructure providers in the industry. You will see the reason why many new companies, including fintech startups, that know how to choose a payment service provider often consider Stripe.
Multiple registration and licences across the globe
It is generally unsafe and very risky to have any dealings with a fintech company that is not licenced to carry out its operations. That is because you could be doing business with a fraudulent establishment. Hence, before choosing any payment processor, find out about their licence(s). Taking such steps is one way to avoid falling victim to wire fraud.
From existing evidence, it is safe to contact Stripe for your business needs. As a fintech company that holds multiple licences from regulatory agencies in different parts of the world where it operates, you can be sure that you are not about to be defrauded.
As of December 2022, Stripe is registered and licenced to do business in 47 countries, including the United States (where it was founded), the United Kingdom, the United Arab Emirates, France, Italy, Spain, Germany, Romania, India, Japan, Canada, Australia, Brazil, Mexico, Cyprus, and Estonia.
Now we will mention two country-based examples of Stripe’s official recognition and safety status:
- In the United States, Stripe is registered as a money service business and licensed as a money transmitter by several authorities in different States, including the Department of Financial Protection and Innovation (California), the Office of Financial Regulation (Florida), the Department of Financial Services (New York), and the Department of Banking (Texas).
- In the United Kingdom, Stripe is a registered payment service provider, authorised and licensed as an electronic money institution (EMI) by the Financial Conduct Authority.
PCI DSS compliant
When it comes to accepting online payments safely and securely, your business can count on Stripe for the tools it needs. That is because Stripe is, itself, PCI DSS Level 1 Service Provider (the highest operating level), which means that it has been audited by a reputable independent firm and found to be compliant with the Payment Card Industry Data Security Standards.
What is PCI DSS about? It sets the minimum operating levels for all online business establishments that electronically collect, process, and store data about payments. According to these standards, there are four levels of certification (Levels 1 to 4). We encourage you to learn more about them in our post titled, “How to Accept Online Payments Safely.”
Data and communication encryption
Another area where Stripe has demonstrated its high level of security is in how it handles data and communication via its platform. Stripe uses the Advanced Encryption Standard with the largest key size—256 bits (that is, AES-256), which is the strongest encryption standard, to encrypt and decrypt all payment card numbers at rest.
It is possible, in theory, for the best hackers to break encrypted data using a "brute force" attack (or trial-and-error technique). The process involves a continuous and systematic guess of number combinations until the right one works. However, the AES 256-bit encryption standard is like a 78-digit number that will take thousands of years for the most powerful supercomputer to crack. This tells you that data and communication through Stripe are super secure.
Besides, in terms of storage, Stripe uses separate machines to store decryption keys. The fintech company runs storage, decryption, and transmission of payment data in an isolated hosting environment or data centre.
Secure connections (SSL protected)
Stripe uses Secure Socket Layer (SSL) protection for all transactions. In that way, the company ensures that every connection is secure and that all information about its clients and their customers is well protected throughout payment processing.
In addition, Stripe makes sure that every web browser, including those on mobile phones and desktop computers, interacts with its website over the hypertext transfer protocol secure (HTTPS) using HTTP strict transport security (HSTS). Do not bother yourself if you find it difficult to understand what these technical terms mean. In a word, Stripe’s website is very secure. That’s all you should know.
Bug Bounty: Continuous security testing
As if Stripe has not already done enough to secure its digital platform, the innovative fintech company has a vulnerability disclosure and reward programme on HackerOne, which it calls the “Bug Bounty.” Stripe uses its “Bug Bounty Program” to continuously test its payment solution for weaknesses.
Under the terms and conditions of the Bug Bounty Program on HackerOne, world-class ethical hackers are invited and paid an amount (bounty) between US$100 and US$25,000 to try to hack into various areas (scopes) of Stripe’s digital system. If they find an exploitable scope or domain where personal data or sensitive information was accessed, they are encouraged to report it immediately and claim their reward. By doing so, Stripe strives to keep its payments platform at the highest level of security and safety at all times.
Stripe’s Products and Functionalities
At this point, you are probably feeling overloaded with technical jargon about the security and safety standards of Stripe. So, we would like to give you a refreshing break by telling you about the functions of the Stripe payment system. How useful do you think Stripe is?
Stripe is a specialist in meeting the payment infrastructure needs of small businesses and large global corporations. Make no mistake, however, that it is not the only world-class company that exists or operates in the payment processing market. Stripe’s top competitors include Square, PayPal, Intergiro, DECTA, Mercuryo, SecurionPay, Soldo, MANGOPAY, and ConnectPay.
The general functions (or functionalities) of Stripe are many, encompassing its various innovative products and diverse users. In terms of use cases, Stripe is excellent for solving the payment challenges of a wide variety of business establishments. They include e-commerce firms, software-as-a-service (SaaS) platforms, NFT marketplaces, crypto exchanges, embedded finance companies, electronic and mobile payment platforms, digital content creators, and crowdfunding payment gateways.
When it comes to its payment processing and management products, Stripe has more than 20—some of them bearing unique names. They are:
- Atlas—for easily launching a startup.
- Billing—for managing subscriptions and invoicing.
- Capital—for raising funds for your business.
- Checkout—for accepting payments online using a checkout page.
- Climate—for offsetting climate change and removing carbon with every payment.
- Connect—for integrating payments into your marketplace using APIs.
- Corporate Card—for issuing branded corporate cards for easy handling of expenses by everyone in your company.
- Data Pipeline—for synchronising your Stripe account with your data warehouse.
- Elements—a collection of rich UI building blocks for designing your pixel-perfect payments experience.
- Financial Connections—for enabling your customers to seamlessly share their financial data with your system so that you can build new products and streamline fraud reduction, facilitate payments, and do a lot more.
- Identity—for reliably confirming the identities of your customers in compliance with KYC and AML standards.
- Invoicing—for quickly creating and sending invoices to your customers.
- Issuing—for creating physical and virtual cards with real-time authorisation.
- Link—for creating links that you can use to boost conversion at checkout.
- Payments—for obtaining powerful APIs and software for a complete payments platform that you can use to scale globally and optimise revenue from more than 135 currencies.
- Payment Links—for using an API to programmatically generate payment links that you can use to sell online without having a website (no coding required).
- Payouts—for sending payouts and automated payments instead of mailing physical cheques.
- Radar—for fighting fraud using machine learning and sophisticated signals.
- Revenue Recognition—for automated reporting of revenue, accrual accounting, and real-time auditing.
- Sigma—for having data about your business at your fingertips through the use of SQL queries (new or predefined), and easy collaboration with teams.
- Tax—for automated calculation and collection of different types of taxes, including sales tax and value-added tax (VAT), for simplified tax compliance.
- Terminal—for accepting payments at your in-person point of sale through the use of pre-certified card readers and the management of cloud-based systems.
- Treasury—a banking-as-a-service (BaaS) API for providing embedded financial services.
Now the core functionalities of Stripe that many businesses often use, which require one or more of the above products, are as follows:
- accepting payments,
- financial reporting,
- setting up subscriptions,
- Stripe Atlas, and
- Stripe Connect.
If you are interested in knowing more about the usefulness of this payment solution provider and its variety of products, go to Stripe now.
Comparing stripe with other providers: which one is more secure
Stripe vs Square
Stripe and Square are super-secure platforms for both online and in-person businesses to accept payments conveniently. They adhere to comparable security standards, such as PCI DSS Compliant Level 1. However, in terms of safety and security, Stripe is better for online businesses and digital platforms that have developers and need to integrate with third-party services, while Square is better for brick-and-mortar stores that rely heavily on point-of-sale (POS) hardware solutions.
Stripe vs PayPal
Due to their very high commitment to security, both Stripe and PayPal are exceptionally secure payment solution providers. For example, data collected from your customers’ debit, credit, or prepaid cards are never transferred to your server if you choose Stripe as your payment processor. But PayPal operates in a way that places a significant security responsibility on its business clients and their developers. Thus, PayPal allows card information to pass through your server first, giving your company extra responsibilities. Therefore, Stripe is better than PayPal in terms of security.
FAQ
Yes, both Stripe and PayPal are very secure payment service providers. They are PCI DSS-compliant. You can use any of them for your business payments. Nevertheless, it is better to go to Stripe for a wide variety of innovative solutions that can meet the needs of modern businesses.
Yes, you can, but it depends on the situation. You can refund a fraudulent payment only after it has been timely reviewed. Besides, Stripe automatically marks payments that have been detected to have an elevated risk of fraud for review.
The outcome (winner or loser) of a card payment dispute is determined by the issuer of the card, which could be the issuing bank (as with Visa or Mastercard) or the card network (as with American Express).
The chargeback amount debited will be returned to Stripe and immediately transferred to you along with the dispute fee that was earlier charged. Losing a dispute is at Stripe’s expense.
Yes, Stripe can automatically debit your bank account, but not without sending you an email notification in advance. You will see the debit transaction in your Stripe dashboard, where it will appear as a negative payout.
Yes, payouts from Stripe go to your bank account. Nevertheless, keep in mind that the availability of Stripe payouts depends on your country and industry. You may contact Stripe support for more information.
Yes, through its Chargeback Protection service, Stripe prevents losses by ensuring that your sales are free from fraudulent disputes.
To receive payouts from Stripe, you need to use your checking or savings account with a traditional bank or neobank. Stripe also allows you to use a fintech company that provides virtual bank accounts, such as Wise, for receiving funds.
The Bottom Line
Are we not a lucky generation? Gone are the days when you necessarily had to build your business' infrastructure for payment processing by yourself. Nowadays, if you cannot create your own hardware, software, or digital platform for accepting different payment methods, you should use a service such as Stripe.
Based on all that we have analysed in this article, it is unequivocally clear that Stripe is a safe and secure payment service! It operates at the highest level of online connection, data collection, information processing, transfer, storage, and management.
Therefore, feel free and confident to go to Stripe today so that you can get the best tools and financial infrastructure for your needs. Besides, if you intend to manage a global online business that can accept payments in multiple currencies, it is a good idea to contact Stripe.
