Payment systems

What is a Stripe Payments System and How Does it Work in 2023? Everything You Need to Know

Irina Tsymbaliuk
Stripe Payments System

Digital business owners have heard about the payment system Stripe. And for good reason: it’s one of the leading services offered in the digital sector, helping to connect sellers and buyers.

The Stripe payment platform is perhaps one of the best systems if you plan to work in the international market or want to personalize your offers and customer experience as much as possible. The platform gives you access to advanced transaction capabilities and multi-currency payment processing, allowing you to build a really safe and reliable ecosystem.

Since details determine the quality, we discuss all of them in this article.

What is Stripe?

Stripe Payment System is a reliable and flexible tool for connecting sellers and customers in online sales and handling financial transactions from A to Z, and is one of the good paypal alternatives to use. This platform has a powerful system for protecting confidential data, monitoring suspicious transactions, and supporting multi-currency operations. You can connect an almost unlimited number of accounts of different banks worldwide to Stripe and take your business to the international arena without extra costs.

For buyers, it’s a safe and transparent option that protects credentials from any fraud.

For business owners, it’s a fast and cheap option to activate an online payment system without complicated procedures. You should also have a good understanding of what a payment gateway system is and how it works.

But how do Stripe online payments work? To explain this, you should first understand the touchpoints between sellers and buyers. Merchants need a simple but reliable system to ensure fast money processing with low stripe fees. Purchasers also need security, facilitated with a huge variety of payment options and simple authentication and checkout. Stripe effectively covers both sides, and that is why it’s gaining momentum and popularity.

What is Stripe?

How Does Stripe Work? API Usage and Security

To answer the question “What is Stripe payment processing?” let’s see what the involved sides are:

  • Buyer — the owner of the banking card.
  • Issuing bank — the structure that gives a card to a buyer.
  • Merchant — the business owner.
  • Acquirer — a bank that provides payments for a merchant.

It starts with setting up an account for a merchant and receiving the needed info about an acquirer. During this step, the platform gets information about the banking account, including currency and the credentials for sending money after the purchase is confirmed.

The situation is mirrored for the customers, and Stripe asks for basic credentials for safe money processing. The system gets the needed info, sends a request to the issuing bank (if there is enough money in the client’s account, etc.), receives confirmation, and then sends the request to the acquirer if it’s ready to receive a payment. When the issuing bank and acquirer approve the transaction, Stripe relocates the needed sum from one account to another, closing the deal for all involved.

Online Payment flow

Technical aspects

If we go deeper into the technical issues of what a Stripe payments system is for a business owner, it’s a technology that is added via API. The Application Programming Interface of the regarded service uses REST, JSON encoding, typical HTTPS codes, and authentication for secure processing. Depending on the location and banking specifics, some additional adjustments are needed, but all of them are described in the API detailed guide by Stripe.


The core aspects that provide security during the payment process are gateways. They allow keeping sensitive information anonymous and well-protected while all the other sides receive the needed information. Using the PCI (Payment Card Industry) Standards confirms a high protection level for card networking as well. Their primary approach focused on anti-fraud steps and tight control, using encoding and SSL & TLS protocols. That’s why questions like “How do Stripe payments work with security?” have a pretty simple answer—according to the newest and highest standards.

AML and KYC Policy

It’s not the Stripe system API but a modern security protocol that improves the capabilities of entrepreneurs and their customers when making payments for goods or services. More precisely, there are several of them here. However, you should know about the key ones.

Stripe payment systems tolerate the use of intelligent user and business data protection systems. They are based on a KYC policy, responsible for identifying potentially suspicious transactions and handling them accordingly. For example, if the payment process takes place with delays or data substitution is detected, the system automatically closes the payment and marks the transaction as “potentially dangerous.”

Another example of Stripe payment solutions is the AML system, which also identifies all parties to the transaction and checks them for traces of speculation. For example, it applies to cases when the value of the conditional product and the payment amount do not match or when numerous transactions of the same type are carried out from one customer and vice versa.

Stripe Payments System Features: Main & Additional Options You Should Know

Even after the detailed overview of security and payment processing, the question “What is Stripe and how does it work?” requires an overview of additional stripe features. Thus, the platform also offers support for card terminals and implemented POS systems, making it a full-stack payment option for merchants who decided to expand from online sales to offline.

However, the main focus is surely made on digital payments, with the following features and options:

  • 135+ currencies and 30+ languages;
  • cross-border payouts with automatic currency conversion;
  • vast mobile paying options;
  • invoicing, cash-based vouchers, and bank redirects;
  • subscription options for SaaS business purposes.

The latter feature requires particular attention, as it really expands opportunities for business owners who prefer servers and software instead of storehouses and delivery. Stripe offers simple monthly payment options and the ability for your customers to change their subscriptions over time.

If for some reason you are interested in how to delete a stripe account, this function is also available.

Stripe Payments System Features


Now you know what a Stripe credit card payment is and why it is so popular. Stripe outgrew into a complex, reliable, yet still easy, and flexible way of handling payments for buyers and sellers. With the initial idea of quickly connecting merchant and customer banking accounts, the API-based tool is now an international and multifunctional instrument for handling payments.

A stripe payment services provider now has multiple options, including banking transactions, donations, and subscription systems, which are suitable even for SaaS businesses. On the flip side, Stripe is ideal for offline trading via the POS systems and terminals usage, making it a provider for Amazon, Google, Shopify, Lyft, and other international giants.

So, the platform should be obligatory included in the shortlist of potential payment intermediaries for your business. You can be calm about how a credit card works with Stripe in terms of speed, safety, and cover, as the system supports 135+ world currencies.

Consider Rates as Your Trusted Partner

A huge political vulnerability worldwide can cause massive currency exchange fluctuations. Having a reliable exchange tracker in front of your eyes can be a suitable feature for you or your clients.

Rates, an online service that tracks the most popular currencies in the world, is just what you need. We check the currency fluctuations and exchange rates and show the dynamic changes. Available in an API form, it can be connected to your website or another digital product and provide your clients with the most recent information about worldwide currencies.


What is a Stripe payment method?

Stripe is a flexible and complex payment system that connects sellers and buyers, allowing both to simplify money receiving and spending, respectively. Among the core features are high security, 135+ currencies available for transactions, and support of banking cards, wallets, and real-time payments.

What is a Stripe account?

Every business starts cooperation with Stripe by registering an account on this platform. After getting an account at Stripe, business owners can choose further details needed for their particular case.

How does Stripe work with banks?

Stripe uses PCI Standards to exchange information with banks, which includes gateways, protected protocols, and sensitive data encryption for maximum safety.

Stripe for business purposes: Is it suitable and safe enough?

Yes, Stripe was designed to assist businesses in making money transactions with clients fast and safely. However, some small companies and startups should check if fees and API connection suit their expectations.

What is a Stripe card payment system?

Stripe’s card payments system is a fast and well-protected approach to connecting merchants’ and clients’ banking accounts. Since card payments initially became Stripe’s basics, their process in this sector is close to perfection.