How To Setup Stripe Account and Calculate Stripe Transaction Fees

Do you have a membership site or online course? Are you are considering setting up a Stripe account to process your payments? If your answer is yes, then this quick guide will come in handy for you.

As you may already know, Stripe is a payment processing gateway – just like PayPal. If you have read all the Paypal vs. Stripe articles on Google, you know that a Stripe account offers several benefits over PayPal. These include:

  • On-page transactions. Post-transaction, PayPal takes you to another web page. Stripe instead offers an API that lets your customers remain on your checkout page.
  • You can start accepting payments immediately. Setup your Stripe account and  integrate stripe with Kyvio. You can now start selling your programs.
  • You are not held down by any contracts. You only pay for what you use. Stripe offer transparent transaction fees. And most importantly, Stripe works in different countries and currencies. So you can sell your courses or memberships to students from all over the world.

Stripe also boasts of big name clients. These include Unicef, Kickstart, Facebook, Lyft, Slack, and Deliveroo.

It is important to note, that while Stripe is a great payment processor, it come with its drawbacks too. The biggest one is the dreaded credit card chargeback policy, and can get you banned. More on that later on.

How to set up a Stripe Account

To get started, create a free Stripe account.

Next, turn your account ON in the dashboard by switching from “Test” to “Live.” After you do that, a pop-up will appear asking you to activate your account. Click “Activate Account,” and fill out the details required to process your payments.

Once you complete the account creation process, you will need to integrate Stripe into your course or membership platform.

This is easy to accomplish inside Kyvio. Read these step-by-step instructions on how to integrate your Stripe account into Kyvio.

How to Calculate Stripe Transaction Fees?

After setting up your Stripe account, you can start accepting payments. Before you can do that, you should have an idea of Stripe transaction fees.

Luckily, Stripe’s transaction fees are quite straightforward.  Especially when compared with other payment processors like PayPal or Braintree.

Whenever a payment is processed through your Stripe account, an automatic processing fee of 2.9% + .30c is deducted.  The remaining money is transferred to your bank account.

You could also decide to charge your Stripe transaction fees to your students. Stripe bills whatever you tell it to – so you can easily factor in your transaction fees. For example, if you sell access to your membership program for $97, your Stripe transaction fee will look like this:


Read more about how to charge your transaction fees to your customers here.

Additionally, Stripe offers support for non-card payment methods for businesses in the US.

Finally, if you need to issue refunds to your students, you can do that via your Stripe dashboard. Refunds take about 10 days, and you can issue either a full refund or a partial refund.

How to Calculate Stripe Non-Profit Pricing

Stripe offers a discount for non-profits. These discount rates are not publicly advertised, and they are subject to change. Also, they only apply to US-based nonprofits with a 501(c)3 designation with the IRS.

Stripe nonprofit transaction fees are:

  • 2.2% + 30¢ for non-American Express transactions
  • 3.5% for American Express transactions
  • 0.8% capped at $5 for ACH direct debits.

To get this discount, you will need to reach out to Stripe at When reaching out, have the details below handy as they will be required to update your Stripe account for nonprofit pricing.

  • Your EIN
  • A 501(c)3 organizational status (with a letter stating that you are one)
  • The email address associated with your Stripe account

You can reach out with a simple email saying you wish to apply for the Stripe nonprofit pricing. Attach the supporting documents outlined above, and you are good to go.

Chargebacks on Stripe

Credit card holders have the right to dispute any transaction charged to their account if they suspect any fraudulent activity. When the payment is reversed, the process is called a chargeback.


Stripe takes a no-nonsense approach with chargebacks. First off, they charge a $15 fee on every dispute filed against your Stripe account. Excessive chargebacks against your account could result in a ban – and frozen funds.

Our first hand-experience with Stripe chargebacks…

It was Friday the 13th…

We’re in trouble,” read Steven’s message.

I had just woken up, so I asked him to give me a couple of minutes. I paused, looked at my phone once again, and wondered what (minor) issue we’ll be dealing with today.

Steven told me that Stripe was kicking us out.

It had been three months since we started using Stripe. In this time, we had completed more than 560 transactions. We wondered what might have prompted Stripe to stop us from processing further payments. We were sure we’ve taken all measures to stay compliant all the way.

Something didn’t look right.

We decided to investigate the potential cause of this new occurrence further. What could have possibly lead us to get banned by Stripe? Where did we go wrong?

It turned out that one of our customers had made 13 transactions in a brief amount of time, and charged back nine of them.

Stripe’s Security System is Good…

So Stripe’s security system must have detected that, and they immediately banned our account. We received an email announcing that our monthly rollover chargeback rate exceeded the authorized 1%. And, we were no longer authorized to use the service.

A quick Google search showed we were not the first or only case. Many people before us have encountered this same issue with Chargebacks. Check out this article from Kinsta.

So the customer who caused this incident had bought his first trial in February. Then he instantly rebought it thrice. One month later, he did the same thing with some of the other recurring payments coming in. On the first account, he used two emails, with the same first and last names. The IP addresses and credit cards were also identical – all from Peru.

Our system didn’t catch that. Neither did Stripe’s.

We are very observant, and it’s usually easy for me for me to spot changes in patterns. This time though, we missed it because we simply didn’t look at each trial microscopically.

So we sent an email to Stripe, explaining our side of the story. We provided all the necessary data to clarify the situation, and make sure they understand what happened. Yet, they still couldn’t help us. At that point, they informed us that it was no longer in their hands and it all depended on their financial partners. In other words, they couldn’t do nothing to help us at that stage.

But ultimately, things got better.

The Miracle of Communities

We spent the entire weekend looking for alternative payment processors such as Paddle, 2Checkout, Braintree and others. We made five calls in two hours, and listened to endless pitches form various payment processors.

Steven, on the other hand, spent the weekend trying to convince Stripe to give us more time, or reconsider their decision. He also started preparing new software integrations for payment processors.

As a last resort, we reached out to the Facebook SaaS Growth Hacks Community. And to my surprise, we got an amazing response!

Kyle Dyke asked us to call Stripe to get our issue solved. Lauren, on the other hand, advised us to process SaaS subscriptions away from Stripe and look for alternatives. James thought something was amiss. He couldn’t understand how someone could make so many transactions in a short time without being caught.

And this further added to our fears that this was a competition-sponsored attack which, as we went along, turned out to be true.

Steven got in contact with Tate, who connected him to someone at Stripe. We got into contact with the lady who handles credit chargeback issues. And she reactivated and put our account into review.

Stripe gave us another chance, however, they had placed even harsher restrictions on the chargeback rate we were allowed. But we didn’t mind as long as we got our payments running.

If you’re a business owner, none of these things should surprise you. Some credit card chargebacks are fair, but most of them are fraudulent. And they hit you when you’re the least prepared.

We can all learn a few lessons from this incident. We are not going to teach you how to reduce chargeback rate. In some cases this is beyond your control. Rather, we can share with you what we did after we faced this unpleasant situation, and how you can avoid it.

So here are a few measures you can take to reduce the risk of getting blocked by a payment processor:

1. Sealing the loopholes

Once we integrated Stripe into our system, we thought we had it all figured out.

By the time we got hold of key Stripe advisory staff, however, they had advised us to set up Radar; something we’ve never heard about before.

Radar 2.0 is a machine learning system that uses artificial intelligence to look at transactions’ data to detect fraud. Using a machine learning algorithm, it determines medium-risk and high-risk operations. Medium-risk transactions go into review while it instantly blocks high-risk transactions.   

Stripe has built Radar into each of their accounts. You can set up rules that will minimize the chances of fraud in your transactions. If any transaction flouts the rules you’ve set, Radar automatically flags it for review – a signal that you should look at it.

At Kyvio, we set up strict rules in Radar, and it is currently flagging some of our incoming transactions for review. We’re still accepting payments. The accounts Radar flags for review help us stay alert in case someone is trying to commit fraud.

Once we get an alert, a team member reaches out and asks the customer if they have any questions about our software. From there, we get a sense of how trustworthy the customer is, and thus, how safe that transaction is.

2. Locking Out The Villains

It’s surprising how someone could make 13 transactions in such a short time and go unseen.

In a typical scenario, a customer would upgrade their account or cancel it. There’s almost no situation where a customer needs to buy the product multiple times. So we’ve come concluded that the number of transactions a customer could make should be limited. Leaving it unregulated left us exposed.

We’ve been using Zaxaa, and they don’t have a feature that allows limiting the number of transactions per customer. So, we end up running multiple transactions per customer per month with Stripe. For that reason, we’re considering other service providers such as Chargebee and Paddle. This will allow us to implement necessary restrictions for our safety.

3 . Expanding your options

As a business owner, you’re probably aware of how valuable time and energy are to your business. You are very likely doing everything to save some. Even if that means using one service provider to handle all your recurring processes.

However, that choice could cost you a lot. It might look like a shortcut at first, but you’re risking a lot by putting all your eggs in one basket.

What happens when that one service provider you’ve put all your bets on closes shop? Or kicks you out for not being compliant?

You should not be bound by the service provider you’re working with. You have the power to choose between several options, so don’t limit yourself to one service provider. Take those measure so that in case things go south with one of them, your business will still be safe.

And that’s what we’ve been doing for Kyvio. Stripe has been processing 30% of our transactions. We’ve worked with Paypal for the last six years and processed more than $5 million, and they wanted us to use their services exclusively.

We can’t rely exclusively on one of them because issues like this can happen at any moment. Failure at one point could completely derail operations if there’s no alternative. Diversification is the key!

We’ll be paying high fees on each of the platforms we choose to work with. But on the bright side, we’ll still be operational even when hit by fraudulent credit card chargebacks.

Stay Vigilant

We’ve read most of the advice on payment security measures out there,. We are still not convinced that credit card chargebacks are a one-time thing. They increase by 41% every two years.

You need to minimize the risk of getting a fraudulent credit card chargeback. You cannot wait until your payment processor closes your account. You have to stay vigilant.

Engage with your payment processor to make sure you have necessary security in place. Resist the urge to trust all your customers. Plus, limit the number of transactions a customer can make in a month. This will help you monitor any irregularities.

And finally have alternatives to keep going once the inevitable happens.

Because, let’s face it, your business is like a flower bud. Its ability to bloom depends a lot on how well you take care of it.

It’s counting on you

Do you have a membership site or online course? Are you are considering setting up a Stripe account to process your payments? If your answer is yes, check out this MAMMOTH guide on buulding your next membership site. .

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4 Comments on “How To Setup Stripe Account and Calculate Stripe Transaction Fees”

  1. Thanks for the detailed info. My question is if I have and use ThriveCart, and completed the integration with Kyvio, are there any advantages/disadvantages of just using ThriveCart ( which I have integrated with Stripe and Paypal) vs. going direct with Stripe/PP?

    1. Hi Miles,

      Thanks for dropping by.

      To answer your question, if you are only selling one product, then ThriveCart probably will not make any difference.

      ThriveCart can be very useful when selling multiple products. Since PayPal and Stripe are only processing payments without an option to create a product, you will be lost, and it will be harder to manage the payments.

      Also, if you are selling any products as a subscription, ThriveCart will provide you detailed information for each subscription. Making it super easy to manage all your recurring payments.

      In conclusion, you can start with only PayPal and Stripe. But as you grow, get more clients, and launch more products, you will definitely need software like ThriveCart.

      I hope this helps.

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