Is Stripe safe? How secure is Stripe for payments?

Panna Kemenes
05.03.21
5 minute read

Stripe is a payment processing platform, like PayPal and Square.

Stripe offers low fees for online payments and plenty of customization options. Even though it has many developer tools, it also offers a straightforward interface.

If you run a business with an online presence, you can use Stripe for online card payments. You can also use Stripe as a business that trades globally. It supports currency conversion and is available for businesses in 44 countries.

But before you start using Stripe, there is one question you will want to be sure of: Is Stripe safe?

💡 If international payments are a priority for your business, then you may also want to check out Wise - a safe, low-cost way to send and receive money.

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📝Table of contents

Is Stripe safe and secure?

Many business owners express concern about the security of payment processing platforms.

Without a certain level of security, the service lowers in value. After all, you want your customers to feel comfortable making purchases through your online store.

Several well-known brands use Stripe, like takeaway company Deliveroo, and accommodation hub Booking.com¹. This can be a good indicator that it it safe to use Stripe, but it's worth doing some research to be certain.

How secure is Stripe payment?

Payment security is a priority for Stripe. This is evident through the various measures it uses to protect card information.

Here are some of those security measures, which should put your mind at ease if you’re on the fence about Stripe:

  • PCI Service Provider Level 1 Certification - The highest level of certification in the payments industry².
  • Encrypted Data and Communication - The service uses PGP keys for safe communication.
  • Money Transmitter Licenses - Stripe complies with legal regulations for payment platforms.

Is Stripe FDIC insured?

Yes, with Stripe, you can set up an account that is (Federal Deposit Insurance Corporation) FDIC insurance-eligible.

This is a big deal, since if something goes wrong with the company, you’re not the one who has to pay.

If you have $250,000 or less in the account and the company goes bust, the FDIC will reimburse the money you lost.

Why does Stripe need my SSN?

Due to legal obligations, Stripe has to request your Social Security number (SSN) so that it can verify your information.

In this case, the SSN serves the purpose of identification. It’s like when you submit a voided check to supply your bank information. Except, in this case, it’s so that Stripe knows you are who you claim to be.

Stripe also needs to know your SSN to verify that you can act on your business’s behalf. This avoids the issue of identity fraud, which can be a huge headache for everyone involved.

Stripe security

Stripe vs PayPal security

Security is a huge factor in the payment industry. The last thing you want as a business is to have customers complain about issues at the checkout stage.

A comparison to draw with Stripe is the payment industry giant that is PayPal. It's interesting to see how the two services compare when it comes to security.

By now you’re well aware of Stripe’s top-notch security systems, but how does PayPal fare?

StripePayPal
PCI compliant: Yes⁴ PCI compliant: Yes⁵
Card information theft prevention:
  • All card numbers are encrypted at rest with AES-256⁶ so Stripe’s internal servers and daemons can’t obtain plaintext card numbers.
Card information theft prevention:
  • Financial information, such as credit card numbers are not exposed⁷. This provides an extra layer of protection.
Encryption:
  • HTTPS for all services using TLS (SSL)
  • PCI Service Provider Level 1
  • PGP keys for safe communication to migrate sensitive data to Stripe, such as credit card information
Encryption:
  • Secure HTTPS connections and strong TLS configurations
  • PCI Merchant Level 1 - Data protection compliance while in transit and at rest, such as PCI-DSS
  • Key pinning when you access PayPal via an IOS or Android app Review by independent third parties⁸
FDIC insured: Yes FDIC insured: No⁹

You can read more about PayPal security, but in short: you don’t get to be one of the leading payment services without high-quality security.

Like Stripe, PayPal offers encryption to protect personal data. However, with PayPal, the recipient of the money isn’t shown any bank information from the sender, and PayPal protects both parties.

PayPal is not FDIC insured, meaning FDIC insurance does not protect you against the risk of PayPal’s insolvency. Leaving a large sum of money in a PayPal account isn’t as secure as leaving it in a bank.

With Stripe, the FDIC will reimburse up to $250,000 in case of insolvency.

Stripe and PayPal both have plenty to offer businesses, so you’ll need to make a judgment call based on what’s best for your company. If you need help deciding, you can read the guide on Stripe vs PayPal.

How do I receive funds from Stripe?

Sending money from Stripe is easy, and you can make the pay-out straight away.

Here’s a step-by-step process to receiving funds from Stripe:

  • First, go to the Stripe Dashboard and log in with your details.

  • Head to ‘Balance,’ then ‘Payouts.’

  • Click ‘Pay out funds instantly.’

  • Now type in the sum of money you wish to send and the debit card you want to send it from. Or, you can use a Visa or Mastercard for this.

  • Finally, click ‘Pay out’ to finish the process. Your funds should arrive within 30 minutes.

💡 It’s quick and easy to send money from Stripe to your Wise account. All you have to do is follow a few simple steps. You can then convert and spend your money at the real mid-market rate, saving you a bunch of money!

Use Wise Business for low-cost and secure international transfers

Every month, over 10,000 businesses join Wise to send, receive and manage their money.

You can use your Wise Business account to pay employees and invoices in over 70 countries, without crazy transaction fees.

Wise safeguards your money, so it won’t be affected in case of insolvency. It is also regulated by the Financial Crimes Enforcement Network (FinCEN) in the US, and many other regulators around the world.

So, not only is your money safe and secure, but you can also save money when you use Wise Business. Win-win!

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Sources:

  1. Stripe - Business users
  2. Stripe - PCI compliance
  3. Stripe - FDIC
  4. Stripe - PCI compliance
  5. PayPal - PCI compliance
  6. Stripe - Security
  7. PayPal - Security
  8. PayPal - What PayPal does to help keep you secure
  9. PayPal - FDIC

All sources checked 3 May 2021.


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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