Stripe
Stripe accepts card payments on Xero invoices, ecommerce checkouts, subscription billing, and recurring direct debit - then attempts to feed every transaction back to Xero. Two different integration paths sit underneath a single brand name, and the right one depends on how money actually flows into your business
Everything on this page comes from setting up Stripe with Xero across client businesses - choosing between Payment Service and Bank Feed setups, untangling bundled payouts at month-end, and making sure fees land in the right account. This is what we have learned
What Stripe does
Features
Stripe is the broadest payment platform connected to Xero. The integration was built by Xero in 2015 and now covers card payments on invoices, ecommerce checkouts, subscription billing, and recurring direct debit. The features below are the ones that matter day-to-day, not the entire Stripe product catalogue
Card and digital wallet payments
Visa, Mastercard, Amex, Apple Pay, Google Pay, and Link checkout. Customers click Pay Now on a Xero invoice and Stripe handles the rest
Auto pay for repeat invoices
Customers authorise once, then every repeating Xero invoice processes automatically on the due date. Available only on repeat invoice templates set to approved for sending
International card acceptance
Accept payments from customers in 195+ countries with automatic currency conversion. International cards cost more, but they work where most domestic alternatives do not
Stripe bank feed into Xero
Every Stripe transaction appears in Xero as a bank feed entry. Payouts to your trading bank are matched against the Stripe account for one-click reconciliation
PCI compliance and SCA
PCI DSS Level 1 certified provider. Strong Customer Authentication and fraud screening run automatically. You never touch or store a card number
Built-in fraud prevention
Stripe Radar runs machine learning against every transaction using data from millions of merchants. Suspect transactions are blocked or held for review automatically - no separate configuration required
Best for
- ecommerce stores already running on Stripe
- businesses billing customers internationally
- subscription and recurring billing models
- professional services using Xero for invoicing
- any business where customers expect card payment as default
Integration mapping
Shared data between Xero and Stripe
Stripe connects to Xero two ways and most businesses end up using both. As a Payment Service, Stripe attaches a Pay Now button to your Xero invoices - the customer pays, the invoice marks as paid, and a spend money transaction records the fee. As a Bank Feed, Stripe also appears as a bank account in Xero where every charge, fee, refund, and payout flows through as a bank transaction. The two paths overlap but they reconcile differently, so the choice between them - or running both together - matters more than it looks
Invoice Payments (Payment Service)
Bank Feed (every Stripe transaction)
Account Setup
Getting started
How to connect Stripe to Xero
Set up Stripe as a Payment Service first, then add the Stripe bank feed if you process transactions outside Xero invoices. The Payment Service alone is enough if you only sell via Xero - add the bank feed when you have ecommerce, subscriptions, or anything else flowing through Stripe
Before you start
- confirm you have Xero Advisor access - lower permission levels cannot configure payment services
- have your business verification documents ready: ABN, owner or director ID, proof of business address, and a trading bank account for payouts
- decide the country your Stripe account will operate from - this cannot be changed later and dictates payout currency, fees, and tax handling
Add Stripe as a Payment Service in Xero
- in Xero: Settings General Settings Payment Services
- click Get Started next to "Credit Cards powered by Stripe"
- choose Sign up for Stripe (new account) or I have a Stripe account (existing)
- follow the prompts to authorise the connection and complete Stripe verification - typically 5-10 minutes for the form, then up to 24 hours for Stripe approval
Configure the payment service on your invoices
- in your Xero invoice template, ensure the Stripe payment option is enabled - it appears as a Pay Now button when you email invoices
- decide how to handle the Stripe fee - until 1 October 2026 you can surcharge it to customers, after that date the surcharge mechanism is removed and the fee must be absorbed or built into your pricing
- set up auto pay for repeating invoices: use the approved for sending status on repeat templates and Stripe will auto-charge customers who have authorised it
Add the Stripe bank feed (if needed)
- only required if you process payments outside Xero invoices - ecommerce, subscriptions, or anything direct from Stripe
- in Xero: Settings Bank Accounts Add Bank Account search for Stripe
- authorise the feed and choose which date to start importing from - typically the first of your current month
- under the new Stripe account, configure where charges, fees, refunds, and disputes are coded by default
Test the end-to-end flow
- send a Xero invoice to a test customer (or a test card) and pay it through Stripe
- confirm the invoice marks as paid, the spend money fee transaction creates, and the bank feed transaction appears
- wait for the first payout to land in your trading bank account - Stripe holds the first payout for around 7 days (up to 14 for higher-risk industries), then subsequent Australian payouts run on a T+2 business day schedule
- reconcile that first payout carefully - this is where bundled-payout mismatches surface, and getting it right early sets the pattern
Things to know
What to watch out for
Stripe is one of the most-used payment platforms in the Xero ecosystem. The product is solid - what catches businesses out is the integration mechanics, not the payment processing. Cash flow timing, reconciliation complexity, and a handful of setup decisions that are hard to undo
Bundled payouts are the main reconciliation pain
One daily payout aggregates every charge, fee, refund, and dispute that settled that day. Matching a $4,732.18 payout to its underlying transactions is impossible without the Stripe bank feed. If you don't have the feed enabled, every payout becomes a manual journal exercise
First payout is held for around 7 days
Stripe holds the first payout for around 7 days from the first successful payment, while it verifies the account. Higher-risk industries can wait up to 14 days. Subsequent Australian payouts then settle on a T+2 business day schedule. If you're switching cash flow models, plan for this initial delay - it surprises every new Stripe merchant
Country setting cannot be changed later
Stripe's country setting is locked at sign-up. It dictates payout currency, fee structure, and tax handling. Businesses that incorporate in Australia but trade in multiple regions need to think this through before opening the account. Wrong choice means closing and reopening
B2B invoicing often outgrows it
Stripe's 1.75% domestic rate is fine for occasional invoices but compounds quickly on B2B businesses processing $20,000+ per month in card payments. Direct debit alternatives (like Pinch) charge a flat per-transaction fee and can save 5-10x on the same volume. Worth modelling at scale
Surcharging ends 1 October 2026
The RBA confirmed on 31 March 2026 that surcharging on eftpos, Visa, and Mastercard payments is banned from 1 October 2026. Stripe will disable the surcharging mechanism for Australian merchants on that date. Stripe's processing fee (1.75% + $0.30) does not change - what changes is that you cannot pass it to customers as a separate line item. American Express, Diners, PayPal, and BNPL remain surchargeable under separate rules. The companion change: interchange fee caps are dropping (consumer credit cards from 0.8% to 0.3%), which should reduce underlying costs for businesses
Disputes and chargebacks need their own account
By default the Stripe bank feed posts disputes and chargeback fees against your generic merchant fees account. They belong somewhere separate, both for visibility and because the GST treatment is different. Configure the default coding before transactions start flowing
Pricing
What Stripe costs
Pricing model
Per transaction - 1.75% + $0.30 AUD domestic cards, 3.5% + $0.30 AUD international cards. No setup, no monthly, no minimums
Other fees
Currency conversion 2% on top of card fees. Dispute fees $25 AUD. Refunds processed at no extra charge but original card fee is not returned
The 1.75% domestic rate is competitive. From 1 October 2026 the RBA interchange caps drop (credit cards 0.8% to 0.3%), which should reduce underlying costs - whether that flows through to merchant pricing is up to Stripe. Where it adds up today is international cards (3.5% + 2% FX) and B2B invoicing at volume - 1.75% on $50k/month is $875/month. Worth modelling against direct debit if most invoices are over $1,000
Frequently asked questions