How can ISOs compete with Stripe?

Despite the popularity, there are many ways ISOs can compete with Stripe. This is due to the disadvantages of using Stripe, such as limited scalability, required coding, and limited omni-channel payment options. By offering solutions to Stripe's shortcomings, ISOs can compete with Stripe and provide merchants with the necessary payment solutions. 

Advantages of Using Stripe

One of the main strengths of Stripe is its API, which enables companies with some development assistance to set up their payment system quickly. Stripe also appeals to companies because of its global reach, which allows them to do business in countries worldwide. 

While the transaction pricing is not the lowest in the payment space, it is easy to predict. This pricing, while not as competitive as other providers, does not have a monthly fee. Stripe also allows companies to set up recurring payments, making it a solid solution for subscription based companies

It can be challenging for ISOs to compete with Stripe. This is because of Stripe's strong reputation in the payment space and the eagerness of merchants, especially new ones, to be associated with such a well known brand. With Stripe, there is also a high degree of transparency that companies and consumers appreciate. Stripe has a lot of tools, documentation, programming libraries, and testing environments for developers to customize their Stripe payment gateway

Limitations of Stripe

Stripe does not provide omni-channel solutions for merchants selling online and in person. This is especially a problem as modern consumers expect to be able to buy either online or in person. With its limited capacity for in person transactions, there are whole industries, such restaurants, and retail, that Stripe is not well suited for. ISOs can easily compete with Stripe by providing in-person payment solutions and fully integrated POS options.

Even though Stripe is oriented toward online payments, many eCommerce options are unavailable to merchants using Stripe. 

Stripe appeals to many merchants and software developers because it is convenient and requires relatively little effort. However, this comes at a cost. Stripe is designed to be optimal for businesses that sit within a particular set of criteria, and many companies fall outside of this. This presents an opening for ISOs to compete with Stripe.

There are issues with account stability with Stripe, and its one size fits all approach can become incredibly costly as a business begins to scale up. Merchants are also unable to use Stripe with their own merchant accounts. This makes Stripe less flexible to meet the needs of the companies that really require their own merchant account. Stripe will also hold funds without warning when they change their mind about the risk level of a specific account. 

The businesses that are best suited to use Stripe are those that primarily sell online, have a lot of international customers, and have an in-house software development team. If a business does not meet all of these criteria, Stripe may not be an option. By providing solutions for businesses without all three criteria, ISOs can compete with Stripe.

How ISOs Compete with Stripe

Offering omni-channel payment solutions is critical for ISOs to compete with Stripe. Omni-channel payment solutions allow merchants to sell on any platform and provide customers with the convenience and customizability that is more important than ever. 

Investing in software that improves ISO payment services' speed, efficiency, and reliability is essential. This addresses many of the pain points merchants have with their payment systems. Focusing on addressing these pain points allows ISOs to compete with Stripe and stand out from other ISOs.

Such investment in software enables an ISO to have greater market reach as they can offer more complex and customized payment solutions to merchants that require them. Software integration also increases customer retention for ISOs as the payment solution is deeply connected to the merchant's system, enabling a partnership between the merchant and ISO to develop. 

Software integration also opens the door to additional revenue streams as an ISO can offer other services that merchants would love to have, such as invoicing or payroll. Software always gives ISOs the option to provide merchants with a more comprehensive product.  

To build this capability, ISOs should look into hiring their own developers, using its existing development resources, or finding a partner to help develop the capacity for software integrated payment solutions. By investing in software integrated payments, ISOs can compete with Stripe and are prepared for the future of payments

How Under helps ISOs compete with Stripe

At Under, we have built out a tool that helps ISOs compete with Stripe without becoming a payfac themselves. We know that the process to become a payfac is lengthy and expensive. In fact, in our past business, Payline Data, we were in the middle of this process when we got acquired in 2017. With that said, we built Under out of need for ISOs because we experienced it with Payline.

Under allows for full merchant applications to be submitted, signed, and sent to the applicable processor. From the business owner perspective, this is as close to an instant onboarding process as there is without being a payfac. Most processors even have automatic approvals based on MCC code and ticket sizes, so it can be an automated approval for certain businesses.

We call this "pseudo-payfac" where we are piecing together the onboarding process. Connect with us to learn more about this if it fits your needs.

Alternatives to Stripe


Braintree, operated under Paypal, offers many similar payment options to Stripe. Both have similar pricing and are available in countries all over the world. Braintree has more access in Europe, while Stripe has more access in South and Central America. However, Braintree edges out Stripe in recurring billing. With Stripe, you have to request an additional service that costs extra. Braintree does not and, in doing so, shows how ISOs can compete with Stripe


WePay is another alternative to Stripe. Targeted to software as a service companies, WePay offers many valuable resources and tools to set up and operate their payment system. Additionally, WePay operating under Chase for your business account, offers extra perks such as same day deposits. 

WePay is also easier to set up with more limited coding knowledge. Unlike Stripe, which requires a company to have a developer, WePay allows companies to set up their payment solution more quickly. By addressing two weak points of Stripe, knowledge of coding needed and overly broad payment solutions, WePay shows how ISOs can compete with Stripe


WePay and Braintree both use solutions that allow ISOs to compete with Stripe. Offering a less code intensive setup process and more affordable recurring billing makes options like Braintree and WePay more appealing than Stripe to some merchants. Investing software integration with merchants also allows ISOs to compete with Stripe effectively. 

While many new merchants likely will continue choosing Stripe as they become more familiar with the payment space, they may reevaluate their relationship. This is where ISOs can really compete with Stripe.

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