Everything You Need to Know About Dropshipping with Stripe
If you are wondering whether it is possible to do Dropshipping with Stripe and how Stripe approaches the Dropshipping business, you are in the right place.
Before we get into all the details, what is Stripe? Let's talk about what it does.
What is Stripe?
Stripe is an llc that offers payment processing software. In short, we can say that it is a payment processor that offers virtual POS service. Its services are mostly used by e-commerce websites and mobile applications. Stripe is an llc with headquarters in San Francisco, California and Ireland. Currently, Stripe's services are actively used by businesses in 43 countries. For e-commerce businesses, Stripe is a popular alternative to PayPal as it allows consumers to pay with a variety of credit cards such as Visa, MasterCard, Usan Express, Discover, and more.
Stripe has a very simple infrastructure for receiving payments, supports many platforms, and is also a platform where approval can be obtained very easily when the necessary conditions are met. In addition, Stripe has the most detailed integration documentation compared to its competitors, so it is easily integrated into all platforms used.
Is Stripe Trustworthy?
Yes, Stripe is a reliable platform because they enforce the strictest security standards. All payment transactions made with Stripe are SSL (Secure Socket Layer) protected. Information is transmitted securely during the processing of all payments. Stripe is PCI compliant. Stripe supports a PCI Service Provider Level 1, the highest rating of payment processing security. All credit card numbers are encrypted and stored securely in Stripe's state-of-the-art data center.
Companies Using Stripe
Stripe is a payment gateway trusted by thousands of businesses around the world. Some of the large companies that prefer Stripe in their payment infrastructure;
After getting some information about Stripe, we can come to our main topic. Does Stripe really support Dropshipping?
Dropshipping with Stripe
When starting a dropshipping business, you need to choose a payment provider. The most important point you should consider at this stage is whether it supports dropshipping. After all, if a payment provider doesn't support dropshipping, it's just a waste of your time.
Stripe allows Dropshipping if your business is outside the Asia-Pacific or EMEA region. In this case, Stripe considers your business to be relatively low risk. For example, if your business is located in the United States, Stripe allows Dropshipping business. It does not change whether you reside in Turkey or a non-embargoed country because Stripe supports an LLC company formed in the USA.
The simplest and most reliable way to open a Stripe account and have an approved business account is to first establish an LLC company in America. If you want to open an LLC company in the USA to open a Stripe account, you can quickly establish your company by getting service from Northwest Registered Agent. A detailed article on LLC company formation in the USA here . Once your company is established, you will now be able to open a Stripe account for your new business. All technical details on this subject in this article .
Let's get back on topic and take a look at Stripe's perspective on the Dropshipping system.
In a blog post published by Stripe, it is stated that it does not support the Dropshipping business model. There are also different business models that it does not support.
In the blog post you will see that some businesses are banned and not allowed. In their article, some businesses are seen as shady or financially risky, while others are categorized as illegal businesses. While reviewing the article, the Dropshipping business model caught our eye under the title "Businesses committing money laundering or fraud";
However, since we know that many e-commerce sites doing Dropshipping business have been receiving payments with Stripe for years without any problems, we conveyed this issue to them and received the following response;
First of all, Stripe stated that they do not support businesses in the Asia-Pacific (APAC) or Europe, Middle East and Africa (EMEA) regions because they label them as risky and have a higher chance of generating more profits. The good thing is that they confirm that they support Dropshipping businesses if the business is registered outside of these regions. You can ask Stripe openly about this issue yourself and you will probably get the same answer. The US is an example of a country that Stripe can support. Dozens of Dropshipping LLC companies established in the USA (even though their owners are Turkish citizens and reside in Turkey) can actively receive payments from credit cards thanks to the information we provide.
After receiving the information from Stripe that "Dropshipping business model is supported for businesses formed in the USA", they confirmed that this was possible. Among the answers received are the following conditions:
- Form your business in a country outside the APAC or EMEA region (For example, in the USA)
- Must have a bank account in the country where the business is formed (e.g. a Wise Corporate account for a US LLC)
- Have a legal address in that country (Registered Agent addresses are a legal address and no acceptable proof is required)
A business that meets these requirements can do Dropshipping business on the Stripe platform with peace of mind. You can legally open and use your Stripe account with an LLC company formed in the USA with peace of mind. Thanks to the platform called Stripe Atlas, the company easily allows you to open an account by setting up an LLC on its own platform. Stripe Atlas is more expensive than our methods, its annual costs are high, and it is not a very reasonable solution because it is installed in the state of Delaware. If you want to form your LLC company in the USA in an affordable and reliable way and open a Stripe account, you can take a look at our LLC company formation guides on our blog.
