Stripe vs Merchant Account

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Person making a payment using a credit card in POS - Stripe vs Merchant Account.

For those out there looking to start a small to medium-sized business, one of the most important decisions is whether they will accept payments. 

There are many different options, from PayPal to Stripe to the traditional merchant. Deciding which works for you relies on what you need from your payment processing.

The truth is you can utilize more than one option but understanding the differences between each could be beneficial to decide whether you’ll go with a single-payer process. 

For example, a merchant account is an account that is given to you when you open a business account with a bank or payment processing company.

In this article, we’re going to particularly look at the differences and comparisons between Stripe and a merchant account. We hope by giving you this information, you’ll be able to decide which one works best for you and your business.


Is Stripe Considered a Merchant Account?

Stripe is considered a payment processor and system that allows business owners to take credit card And debit card payments. In addition, you can take mobile wallets like Apple Pay or Google Pay. 

It is also able to accept a wide range of different uses. But even with all these functionalities and features, it is not technically a merchant account.

Rather it is a combination of the features of a merchant account with a payment. In other words, it is tied to a designated bank account from the business owner. 

Therefore, you absolutely cannot use merchant accounts or gateways that you already use because they are outfitted with features of both of these platforms.


Do You Need a Merchant Account to Use Stripe?

Whether or not you choose to have a merchant account is really up to you. There is no need for you to have a merchant account to use Stripe. Simply a business account or a bank account that is attached to your business.

However, if you’re starting, not having a merchant account may not be a problem as your business begins to grow though it may become more necessary for you to look into having a merchant account that you can then tie your Stripe account into.


Pros & Cons: Stripe vs. Merchant Account

To determine which of these payment processing modes is best for you and your business, we thought we would look at each option’s pros and cons. 

Understanding the strengths and weaknesses of each may help you decide whether you want to go for one or the other or a combination of both. Here are the pros and cons of both Stripe and a merchant account:





  • Stripe offers a transparent and flat rate pricing scheme
  • Able to take a variety of different payment methods as well as currencies
  • Highest for a streamlined checkout
  • Around-the-clock customer service
  • Quick and simple setup




  • Not as user-friendly as other options
  • Reduced functionality for in-person transactions


Merchant Account




  • Able to handle a high volume of transactions easily
  • Lower rate with more transactions
  • Issues are easily handled
  • Most providers offer around-the-clock customer service
  • Capable of adding multiple gateways




  • Different requirements depend on the provider
  • Fees can be complex to understand


Price Range: Stripe vs. Merchant Account

If you’re still unsure of what method to go with, your budget could play a part in your decision. That means you need to understand the fees and prices of each of the different options. So we’re going to take a look at those to assist you and figure out which way to go.



Stripe is free to set up and doesn’t have a monthly or annual fee. Instead, stripe charges per transaction with a very clear pricing strategy. 

All online sales will cost 2.9% + 30 cents per transaction. For international or currency conversion transactions, there will be an additional 1% on top of that fee.

If you’re executing a transaction, it’ll be 2.7% + 5 cents per transaction, as well as an additional 1% if there is a foreign currency conversion or card involved in the transaction. Each of these fees will be deducted from the final at the end of the month.


Merchant Account

The fees for a merchant account are going to vary depending on the bank or processing company you go with. But on average, you’re looking at somewhere between 1.3% and 3.5% for every credit card transaction.

On top of that, most payment processors are going to charge an additional .5% to 2% per transaction value. Again, this is intended to help cover any fraud or other costs that may come into contact. 

The setup of the merchant count is free as it is simply a transaction of setting up a bank account with either a bank or a payment processor.


Final Verdict: Stripe vs. Merchant Account

So which is the best option for you- Stripe or a merchant account? The answer to this is dependent on the size of your business. For those just starting and with a small and medium-sized business stripe account, there may be plenty for you. 

On the other hand, if you process a high volume of transactions, a merchant account may be better for you.

Another deciding factor may be whether you are completely online or in-store. If you’re complete, online Stripe may be perfectly capable of handling what you have going on in your business. However, a merchant account may be easier if you are in person. 

If you have a mixture of both, maybe you should opt to have both a Stripe account as well as a traditional merchant account. In the end, you can utilize both types of accounts to allow you a more versatile selection of payment processing options.


Final Thoughts on Stripe vs Merchant Account

Stripe is a payment processor that is both a gateway as well as a merchant account. A traditional merchant account is simply a merchant account that allows you to accept credit card and mobile payments. 

So, in the end, Stripe and a merchant account are both valid options, and depending on the size and amount of transactions you do per month, it might be beneficial to opt for both.