Stripe and Xero: Should You Use Stripe for Payments from Your International Clients?

Less admin, more freedom.
Less admin, more freedom.
Stripe and Xero: Should You Use Stripe for Payments from Your International Clients?


Many NZ businesses are using or considering using Stripe as an option for receiving payments from overseas clients. Here are some suggestions from our experience integrating Stripe with Xero.

  1. It is helpful to use only one method to process Stripe payments so there is consistency in the way clients are charged and also for ease of reconciling. Stripe Payments can be processed in 3 ways:
    a. A manual payment through the Stripe portal
    b. A Stripe invoice through the Stripe portal
    c. A Xero invoice
    We recommend if possible only processing by creation of Xero invoices.
  2. If the 2.9% fee is charged back to the client, Stripe includes the 2.9% extra in the overall total to be charged. However, you will be charged 2.9% of the 2.9% client fee.
  3. There is also a transaction fee of 0.30c which you will be paying.
  4. Stripe pays out in NZD and the conversion rates are set by Stripe. This is where unexpected expense can occur.
  5. We have seen instances of additional conversion fees being charged. For example, where a client requests you to issue an invoice in USD but they are paying from a different currency account. Your client will be hit with the conversion rate from Stripe and then another conversion on entry to their bank. Your client will need to check with their bank on the fees. For example, ASB charge a 2.1% offshore margin.
  6. Issues can also arise on conversions relating to disputes and refunds. Because currency conversions are finalised at the time of processing, a refund may be for a different amount from the original invoice.
  7. This is good to have a read through, just so you are aware:
  8. If your client wants to complete a part-payment we recommend it is done either by
    a. generating separate invoices in Xero for each partial payment
    b. completing a manual payment on the Stripe log on (part payments are only available in the US).
  9. If transactions are processed through the Stripe logon, the fee to the client needs to be manually applied, otherwise your business will be charged the total fee from your payout.

We have another client who has been impacted when starting to use Stripe for foreign currency as the amount the client was quoted to be charged is not what came out of the clients bank account. If the currency is like for like it is much easier, but if not the client must check with their bank on extra charges. I would recommend adding wording to your invoice template to prevent bite back.

Stripe's integration with Xero is sometimes difficult. Living Business can find creative ways to help you and configure the solution best suited to your business needs. Get in touch with us to find out more.