I got some questions from a paid subscriber about getting set up on Stripe for the first time. I'm answering them here in case others have similar questions. If I didn't cover your question, ask it in the comments or shoot me an email.
Heads up that I'm answering this as a person who operates in the United States for other people who operate in the United States. Some of this is not relevant if that's not where you operate. Check your local laws and Stripe's documentation for your country.
The subscriber who inspired this post also recommended this video if you want to see how Stripe set up works step by step.
What is Stripe?
Stripe is a global payment processor, most commonly used in the US, the EU and Canada, though it's available in about 60 countries. It is the default payment processor for a lot of tech tools including beehiiv, Ghost, Kit, Substack, Buttondown, Memberful, Ko-fi, Buy Me a Coffee and many others you might set up.
Some platforms allow additional processors. Many don't. So, we're beholden to Stripe if we want to use these tools.
How do you set up a Stripe account?
You can set up Stripe on your own if you want to use it for invoicing, bespoke subscription creation or product links by going to stripe.com and clicking "Get started" HOWEVER you are probably setting up Stripe because you've chosen a platform to use and in that case, you should follow that platform's instructions.
Platforms like Ghost and beehiiv have special integrations with Stripe that are set up to two way communicate what happens on one side with the other. That's why if you're like me and you run multiple newsletters at some point, you'll end up with multiple Stripe accounts.
Whether you join through a platform or set Stripe up yourself, you will be asked about your business, where it's located and how people can contact you.
Information you'll need handy includes:
- Your business name (You can have a private business name—your name or your legal business name—and a public business name that your customers see)
- Your business address (This can be a mailing address)
- Your SSN or business EIN (This needs to be real obvs)
- Your customer service contact email (If your customers complain to Stripe/also for some Stripe communications)
- Your bank account (Ideally a business one, but Stripe doesn't care)
- Your type of business (You will likely not need this if you're signing up through Ghost, beehiiv, Buttondown, etc as the platform dictates the type of business)
- Your domain (Less important if joining through a platform)
If you have everything above, it should take you maximum 2 minutes to fill out their form. Once you send Stripe the info they request, it can take a day or two for them to approve you if this is your first account. When they do, you're up and running. Your payouts will be slower in the beginning and they will speed up once you start processing money with no problems.
Do you need a business entity?
No, Stripe allows you to register as a sole proprietor. That's a US thing. I don't know how that works everywhere, but Stripe is fine with US-based people registering as themselves. If you're not ready to start a business, you can choose this path.
There's three benefits to setting up a business entity (and not registering as a sole proprietor.)
- The biggest in my view is that it saves you a shitload on taxes. It's crazy how much it saves you but the United States loves a business more than they love people. If you're going to make at least a couple thousand bucks this year, I think it's worth it to register a business. Registering a business is not expensive and I say that as a former Californian who paid $800 in business renewal fees every year (among the highest in the country.) As a Georgia corp now, it's maybe $150/year. You can of course register in Delaware, everyone's domestic tax haven, if you want too. I'm not an attorney or an accountant so talk to one of them for advice.
- The second benefit is that it protects your liability if something goes wrong with the business. That's the first L in LLC (limited liability company.)
- The third benefit is that you can separate your personal and business lives including the address you list everywhere and your bank accounts. Once you register as a sole proprietor and operate that way, your personal information goes online. If you're a business, you can set up separate business info (like a PO box or office address and virtual phone number) and that's what goes online.
Even if you don't decide to become an official business, you can use separate "business info" if you want to, like:
- A business mailing address—I use Traveling Mailbox for $20/mo and they scan all my mail. Highly recommend. This is my affiliate link.
- A business Google Voice or whatever burner number you prefer. I use Burner because I used to work there.
- A custom email alias off your domain. Something many domain providers offer for free or for very cheap. You can use this for email replies and for your customer service email.
Total cost of all the above is maybe $30/mo. My privacy is well worth it to me. Once your info is out there, it's everywhere.
Like I said before, after you see that first $1k come in, I'd think about switching to a registered business. Talk to an accountant or a lawyer. They will advise you based on your own situation.
You can change your business info later, including your SSN/EIN. Stripe will likely re-validate your details, so I might contact their support before you do that to ensure there's no downtime, but it's possible to change in their admin panel.
Does your business info need to match your publication?
Ideally yes, but no, Stripe doesn't care. You need to use your actual name or business name when registering for the account, but the public name (the name that would appear on receipts, invoices, statements, etc) can be your publication name whether or not that is registered as a business. It can actually be pretty much anything you want. I have one called "Revenue Rulebreaker Events," for example. Invisibly, behind the scenes, that is registered to my actual legal business name. But on your statement, it reads "RevRulebreakerEvents."
Do you need a business bank account?
No and I don't think Stripe can even tell the difference between a personal and a business account. They only know if it's checking or savings, and they don't care which it is (in the US at least.) I recommend a checking account though. Ideally, a business checking account.
If you're going the sole proprietor route, you can set up a second personal checking at a different bank and make that your "business account" temporarily. This is optional and it's something you would do for your own bookkeeping reasons. Plus, potentially if you got audited, it would make your business accounting much cleaner. What happens at the end of the year is Stripe generates a tax form with how much you made from them so you have an easy document to use for the IRS. You can operate out of your personal bank if you prefer to start, and once you begin making some money, switch to a business account.
If you start a business entity from the beginning, you definitely want a business bank account. Many are free. You just need to bring your business registration info to the bank. Then, hook that up to Stripe.
You can change your bank account at any time so you can start one way and switch to another later. I've swapped out many a bank account in my 7+ years with Stripe.
What else do I need to know about taking money with Stripe?
- Make sure your statement descriptor is clear. Once your account is set up, you have the option to set a "statement descriptor." That's what shows up on someone's credit card or bank statement when they get charged by your site. If it's confusing, that's how you get a chargeback (a.k.a. a forced refund demand.) Make it match your name or publication name. Something they would recognize. Find that under Settings > Business > Bank accounts and currencies > Statement descriptor.
- Be aware that chargebacks are a thing and have a clear refund policy. A chargeback is when a customer has their credit card company or bank fight a transaction. This can happen to you! One of the best ways to prevent this is to have a clear, obvious refund policy on your site. Make sure customers know what that policy is. Even with a refund policy, Stripe can err on the side of your customer. That's why I just refund anyone who asks. It hasn't been a problem. It's pretty rare that it happens and it's usually right away on purchase. Decide what your policy is and make it known to your people. Don't be too freaked about this. I've never had a chargeback. It does happen but it's preventable and it's not something I ever hear about from other publishers. Usually service providers feel this pain the most. There are also more mitigation steps if this does become an actual problem for you.
- Don't use your integrated Stripe account for anything else. Ghost told me this! I tried to use my Ghost Stripe to process event payments and they were like girl, stop. Like I said above, Ghost and other platforms have special integrations with Stripe that sends info back and forth so if you process a totally different transaction (like a sponsorship deal), it can result in that person having a subscription or confusing the subscription system. If you want to use Stripe for other stuff, just make a standalone Stripe account. You can have as many Stripe accounts as you need with the same business info.
- Know the difference between Stripe and Stripe Connect. Some platforms use something called Stripe Connect which is because they collect all the money into one big pool and then pay it out to creators later. None of the major platforms do this but Buy Me a Coffee and Stan Store do, for example. Stripe Connect is annoying and it gives you a lot less control over everything. I try to avoid platforms that use Stripe Connect if possible. Their payouts are slower. You can check documentation for any tool you're thinking about to see if this is their default or you can just set up Stripe to see. It will show you that it's Stripe Connect.
Help! I feel weird about taking people's money!
Yes, I get this! I think it's good you feel that way. We should take it seriously when we're taking people's hard-earned money to deliver something in return. I do think this feeling softens the more you do it and if you're serious about whatever your endeavor is and you plan to deliver on your promises, that's all anyone expects of you. Absolute worst case (and I mean WORST CASE like you end your project), you can refund everybody. You can trigger those voluntarily (either partially or fully) from within Stripe yourself. I've done that before for events I've cancelled. It's very easy and people get it.
Have more questions about Stripe? Leave them in the comments or send me a note!
