Payment systems

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

Irina Tsymbaliuk

Digital business owners surely heard about the payment system called Stripe. And for a good reason, as it’s one of the leading services offered in the digital sector that helps to connect sellers and buyers. 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 connecting sellers and customers in online sales, coping with financial transactions from A to Z.

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 payments system without complicated procedures.

But how does Stripe online payment 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 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.

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 does Stripe payment work with security?’ have a pretty simple answer — according to the newest and highest standards.

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 features. Thus, the platform also offers support for card terminals and implemented POS systems, making it a full-stack payment option for merchants that 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.


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 & flexible way of taking care of the payments for buyers and sellers. With the initial idea of fast connecting the banking accounts of merchants and customers, the API-based tool is now an international and multifunctional instrument to cope with 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 suits their expectations.

What is a Stripe card payments system?

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