Mastering Your Stripe Account Structure - A Guide for Scaling Businesses

Setting up Stripe is often one of the first steps for any online business, yet it’s a step many businesses get wrong, leading to missed revenue and unnecessary costs. As someone who’s implemented Stripe for over a decade, and helped businesses of all sizes build scalable payment infrastructures, I’ve seen first-hand the critical importance of getting your account structure right from the beginning.

This article is your guide to navigating the complexities of Stripe account structure, sharing hard-earned lessons and actionable insights that will help you optimise your payment operations.

Understanding your Stripe account options

Your Stripe account structure isn’t just about how many accounts you have; it’s about how those accounts are interconnected, where they are based geographically, and how they facilitate your business operations. Stripe offers flexible options, ranging from simple to highly complex.

Yes, you can create and manage multiple Stripe accounts. This flexibility is essential for scaling and optimizing your business for various markets.

For the smallest of businesses, with a single product and geographic focus, a single Stripe account – what Stripe calls a Unified Account – is sufficient. But as your business grows, you need to carefully examine other available options.

Unified account approach

A Unified Account is a single account used for your entire payment operations on Stripe, allowing you to manage multiple products and services with varying presentment and settlement currencies. It’s the simplest model, but its capabilities can be limited.

What are presentment and settlement currencies?

Presentment currency is the currency that the customer sees on the website. It is the currency charged to the customer when the customer make a payment. Settlement currency is the currency in which the business (you!) receives money. It is the currency of your bank account. Stripe allows you to have multiple presentment and settlement currencies, depending on the country of the business. To view your account’s presentment and settlement currencies, visit your Stripe Dashboard.

Choosing the right currency combination is driven by these key factors:

1. The type of product or service (digital or physical)
2. The countries where you have business entities (legal entities)
3. The countries of your current, and potential, customers
4. The countries of your business’s bank account (Some banks offer wallet services in certain countries)
5. Number of bank accounts you plan to use

The simplest use case is when a business is based in the United States and only sells to customers in the United States.

In this case, the business can use a Unified Account with a presentment and settlement currency of USD.

When selling internationally, you have three primary options within the Unified Account framework:

Option 1: Single presentment and settlement currency

Imagine a US business targeting the UK, Europe, and Australia.

Here, you display all prices in USD, and all customers are charged in USD. You receive funds in USD. While simple, this creates friction for international customers since they bear the brunt of conversion fees set by their banks. This can lead to customer confusion and disputes since the final amount charged may not be obvious upfront, leading to a higher churn rate. Importantly, you, the business, will receive less than the customer is charged due to Stripe’s international transaction fees. In the UK, the fee for EEA cards is 2.5% + 20p and 3.25% + 20p for International cards. In the AU, the fee os 3.5% + A$0.30. In the US, the standard fee for international cards is currently 1.5%. This is on top of the Stripe fee. See Stripe’s official pricing page for up-to-date rates here.

Option 2: Multiple presentment, single settlement currency

A business looking to minimise customer friction can offer its products or services in the presentment currency of the global customer’s bank account. In this case, the business can set up a Unified Account with multiple presentment currencies of USD, GBP and AUD. Depending on the country of the business and the desire to minimise complexity, the business may configure only one presentment currency.

In this scenario, currency conversion happens at the point of sale on Stripe. Stripe will charge additional fees for currency conversion on top of the international card transaction fees. For this business in the US, each international transaction is charged 1.5% (International transaction fee) + 1% (Currency conversion fee) of the transaction amount. This makes the total cost of transactions more expensive for the business. On the other hand, using only one presentment currency and one settlement currency, the business could reduce cost and the complexity of its accounting and revenue operations.

Option 3: Multiple presentment and matching settlement currencies

Almost always, for a local business that offers products or services to global customers, the best option is to set up a Unified Account with multiple presentment and matching settlement currencies.

This approach is the most customer-centric for a local businesses with global customers. You set up a unified account with multiple presentment currencies that are mapped to settlement currencies. This allows you to charge customers in their local currency and allows you to settle transactions in the same currency. While the business still incurs international card transaction and multi-currency settlement/payout fees, it is usually the best option to reduce friction, increase sales, and keep the business operation simple.

For larger businesses with substantial international transactions, a regional account structure (multiple accounts) is likely more appropriate.

Multiple accounts approach

Businesses can operate with multiple Stripe accounts, each linked to projects, websites, or individual business entities across various countries. These accounts can all belong to the same legal entity or operate as sister/sibling companies across geographic regions.

This structure is best for reducing costs from international transactions and foreign exchange fees and increasing local acquisition and revenue. This also unlocks the ability to have multiple presentment and settlement currencies for different regions for one or more of your businesses, which could help reduce Stripe fees. For example, a business in the United Kingdom may be charged fewer fees for EU cards.

Multiple accounts approach with Stripe Connect

Stripe Connect allows you to create multiple accounts that are linked to your main account. This is useful for businesses that want to operate as a group of companies, each with its own Stripe account.

Stripe Connect is the core Stripe product for platform business models like Marketplaces and SaaS Platforms. Stripe connect allows you to:

1. Securely onboard and verify freelancers, sellers, and other recipients
2. Manage payouts to multiple parties
3. Customise the expereince of your platform (includes marketplaces) participants
4. Charge fees to all participants on the platform
5. Payout globally to sellers from all over the wrold
6. Simplify the compliance process

Even if you are not a marketplace or SaaS platform, and have global payment acquisition operations, you can still use Stripe Connect to manage your payouts and simplify your compliance processes.

For example, let’s assume you are based in Australia and you have a SaaS model with a global reach.

This is how you could set up your Stripe Connect accounts structure if your key target markets are in US, UK, Europe, and Japan:

1. Open business entities and associated currency bank accounts in key international markets, like US, UK, and Japan.
2. Create Stripe Connect accounts for each business entity.
3. Create a Stripe platform account or turn your existing Stripe account into a platform account via Stripe Connect.
4. Create connected accounts on the Australian Stripe platform account (from step 3) for each of your international business entities.
5. Configure routing logic for customer-facing application so that customers are routed to the appropriate connected account based on the country they are paying from.
6. Configure routing logic for payments so that payments made by customers in any country where you have a legal entity, are routed to the appropriate connected account. You could implement direct charges on the platform for Australian customers, destination charges for EU, UK, and Japan customers, and so on, or route those payments to the platform or connected account with the most favourable currency conversion rate.
7. Payout to local banks without currency conversion for the majority of the transactions across all your international business entities. Save on international transaction fees and foreign exchange fees.
8. Enjoy unified reporting - Pull financial reports to reconcile payments and payouts across all your international business entities, all with one set of API keys.

Why account structure matters

I have first-hand experienced the growing pains of multi-regional online businesses that didn’t consider critical strategic questions before setting up their Stripe accounts. Your Stripe account structure can significantly affect payment processing costs, implementation complexity, and a business’s overall revenue. It’s crucial to consider the account structure when implementing Stripe, as it directly impacts:

1. Currency determination and conversion

The location of your Stripe account determines the default currency for processing transactions. This impacts whether you need to convert currencies, which can incur additional fees.

Using local Stripe accounts in each market for businesses dealing in multiple currencies can minimise conversion costs and provide customers with localised payment experiences.

Failure to optimise this can lead to significant losses due to unfavourable exchange rates and additional fees.

2. Local acquisition and costs

Transactions processed through local acquiring banks typically have higher authorisation rates and lower cross-border fees. This can lead to a higher number of transactions and increased revenue.

Setting up local accounts enables you to benefit from reduced transaction fees because Stripe can process payments through local acquirers rather than international networks. However, establishing and maintaining local entities comes with compliance costs and operational overhead. Therefore, it’s essential to consider the advantages of these expenses carefully.

3. Payout methods and reporting.

Payouts can be significantly streamlined for your business by aligning your Stripe accounts with local banking systems. This reduces delays and additional fees associated with international payouts. Unified structures simplify consolidated reporting but may obscure regional performance nuances. While more complex, regional structures provide granular insights that can guide strategic decisions in specific markets. Understanding your reporting needs and ensuring compatibility with accounting tools can optimise financial oversight and decision-making. Stripe seamlessly integrates with accounting tools like Xero, Quickbooks, and more. The key is to get your finance person to collaborate with your Stripe implementation team to ensure the right account structure is set up.

Best practices for Stripe account structure

First, start with macro-level strategic questions. I have found that business leaders often overlook these questions and end up with a Stripe account structure that doesn’t align with their business operations.

Strategic questions to consider

Consider the following questions and write them down before deciding on the Stripe account structure:

• Have you outlined your payment flows, and do they align with your business operations?

• Have you modelled your financial operations and reviewed projections across different account structures?

• What is your business roadmap?

• Do you need to segregate your cash flow and business operations? By region? By product? By customer?

• What are your primary growth regions? And do they require special considerations?

• How will your customer’s payment preferences impact your choice? Now and in the future?

• How automated do you want your payment operations to be? Who will be responsible for managing your Stripe accounts? Do you have the right talent and internal processes in place?

• What level of detail do you need in your reporting?

• How will you manage legal, tax, and financial compliance as you scale?

These strategic questions will then help you answer the following questions:

1. How many Stripe accounts do you need?
2. How many presentment and settlement currencies do you need?
3. How many bank accounts do you need?
4. How many countries should you have business entities in?
5. How many countries do you have customers in?

Implementation tips

1. Start with a simple and scalable structure

Start with a simple and scalable structure when designing your initial Stripe account structure. Keep the number of accounts as small as possible to reduce technical complexity while maximising access to local acquiring and payment methods. Striking the right balance between simplicity, usability (for your customers and your team), and cost is key.

2. Get support from your Stripe account team

Stripe offers fantastic support. Use your Stripe account manager for tailored advice and to leverage underutilised features relevant to your business model.

3. Consult with Stripe experts or partners

Partnering with a Stripe specialist can save you time and prevent costly mistakes, especially when scaling across regions.

With my extensive experience, I’ve helped countless businesses build successful payment operations on Stripe. I offer personalised guidance to help you design a future-proof Stripe setup. Let’s discuss your specific goals and build a payment strategy tailored to your unique needs. Contact me today to ensure your Stripe implementation is optimised for growth.