The Magic Beans Guide to Stripe: Creature of the Coinstream

A practical guide to setting up Stripe for creative earnings, understanding fees, payouts, and tax responsibilities.

There is a river, shimmering and strange, that winds its way through the Realm of Finance. They call it the Coinstream, and its waters run deep and strong, carrying glints of gold and glimmers of silver from patrons, subscribers, and benefactors.

In its gilded depths, hidden currents flow in odd and unexpected ways, curious creatures move unseen beneath the surface and strange craft sail its treacherous waters.

The Craft of the Coinstream

There are the coracles of Etsy brimming with handmade curiosities and vintage crafts, punted gently along by mettlesome makers. The houseboats of Patreon moored along the banks are floating sanctuaries where loyal patrons climb aboard to see behind-the-scenes and linger among the crafters. Alone on hand-built website skiffs, determined sailors set their own course, stitching their sails from scraps and dreams, chasing the currents on their own terms. The Vast Galleons of YouTube ride the deeper channels, their wide decks bustling with spectacle and song. Drifting grandly by, all mirrors and music, the glittering superyachts of Meta host fickle crowds who watch a stream of artists perform on borrowed stages. Catamarans of TikTok dart lively and swift, their creators performing dazzling feats atop narrow decks, racing the current and chasing the ever shifting flows.

And filling their spinnakers with letters and stories, the growing fleet of Substack ships sail onward, from clippers and cutters to schooners and sloops, each carried forward by the shared winds of creativity.

The craft upon the Coinstream sail in search of glittering gold and glimmering silver, casting lines and lowering nets, hoping to haul treasure from the depths.

But no treasure rises by the sailors’ hands alone. It is the creatures gliding through the gilded waters that bear the gold and silver offered by patrons, subscribers and benefactors, to the waiting decks above.

Some creatures drift slow and heavy in the deeper channels; others weave nimbly between the currents, each ferrying coin between buyer and seller, through the flowing river.

Creatures of the Coinstream (payment processors)

Among the dwellers of the Coinstream are these strange and curious creatures:

Stripe

A ribbon-finned courier, swift and silent, carrying coin cleanly from giver to maker along the river’s swift-running waters.

Stripe is an online payment processor that handles transactions for businesses and creators by moving money securely from buyers to sellers.

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PayPal

A broad-shelled beast who sculls along the deeper channels, often pausing to weigh its cargo before delivering coin to the craft above.

PayPal is a digital payment platform that allows individuals and businesses to send, receive, and hold money, sometimes placing temporary holds on payments for security reasons.

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Square

A lively shapeshifter flitting near the riverbanks, gathering coin swiftly wherever trade stirs the waters.

Square provides tools for in-person and online payments, including card readers and point-of-sale systems often used by shops, cafés, and small businesses.

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Wix Payments

A steady, route-bound creature ferrying coin along well-marked channels to the waiting decks of river crafters.

Wix Payments is a built-in payment system for Wix websites, allowing businesses to accept online payments through a structured, template-driven setup.

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Wise

A sleek courier darting across distant currents, bearing coin from far shores to those sailing the Coinstream’s waters.

Wise is a service for sending money internationally, specialising in low-cost currency conversion and cross-border transfers.

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Each of these creatures answers the calls of many vessels across the Coinstream. Yet for the fleet of Substack ships, it is the ribbon-finned Stripe alone who carries their coin between patron and creator across the flowing waters.

Payment processors are services that move money from your customers and subscribers to you. They process payments securely, transfer funds, and make sure transactions complete properly. Stripe, PayPal, Square, Wise, and Wix Payments are some examples of these services.

On Substack, Stripe is the only payment processor used for collecting paid subscriptions.

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And so, for those sailing the Substack ships, it is wise to understand the ways of the ribbon-finned Stripe, the currents it follows, the tolls it takes, and the ripples it leaves in its wake.

Trim your sails, and let’s explore the mysteries of the ribbon-finned Stripe together.

The Ways of the Ribbon-Finned Stripe

The Summoning of Stripe (setting up your stripe account)

To gather coin along the Coinstream, a Substack ship’s captain must first call upon Stripe (set up a stripe account), prove their true name to keep the Coinstream’s trade fair and safe (verify your identify), and choose between a plain-finned Stripe (Individual account) or a crested Stripe (Business account), bearing the markings of a registered company.

Once called, your ribbon-finned Stripe cannot change its nature, so be sure that you are making the right choice. (You cannot switch an Individual account to a Business account later, or vice versa; a new account would need to be created. On Substack, this would mean cancelling and refunding all paid subscriptions before linking a new Stripe account.)

Yet no creature of the Coinstream carries coin without asking a toll, and so it is with Stripe.

The Toll and the Tribute (fees and costs)

Every time Stripe gathers coin from the flowing waters, it feeds, sustaining itself on the glitter of gold and silver. (Stripe takes 1.4% plus a small fixed fee for local cards, or 2.9% plus a fixed fee for international cards)¹

After Stripe’s toll, the Substack fleet takes its own tithe: 10% of what remains, a fee for sailing among their gathered ships. What lands in your palm will be lighter than the coin first cast into the waters, as the ribbon-finned Stripe and the Substack fleet each take their due for carrying your coin and filling your sails.

The Keeper of the Coin (payouts and timing)

Once the coin is gathered, Stripe does not cast it immediately into your nets. Instead, it holds the treasure within its swim bladder (your Stripe balance), keeping it buoyant beneath the surface until the moment comes for your lines to draw it aboard. (Payouts from Stripe can be set to daily, weekly, or monthly, though the first payout for a new account usually takes 7–14 days.²)

Charting the Coin (accounting for earnings and fees)

Once coin is gathered into your nets, the work is not yet finished. To steer your craft wisely, you must learn to chart your takings: marking what was cast into the waters, what was claimed in tolls and tithes, and what now rests in your hold. (It’s important to track both your total earnings and the fees taken, because tax reporting usually requires the full amount earned, not just what you receive after fees.)

Stripe leaves trails of silver bubbles beneath the ships, recording coins gathered and tolls taken so sailors can trace their treasure.

(To make this easier, I’ve created a simple spreadsheet for Creative Explorers and Creative Adventurers. Input your Stripe balance history report and it calculates your total earnings, the Substack platform fee, the Stripe processing fee, and the net amount received in your bank account, broken down by month.³)

With your charts kept clear, you’ll be better prepared for the journeys ahead, and for the call of the Crown when it comes.

The Coin and the Crown (tax responsibilities)

Stripe may carry coin through the Coinstream, but it does not deliver tribute to the Crown. That task falls to each captain whose nets gather gold and silver from the waters.

If you earn more than a small handful of gold or silver, you must declare your earnings to the Crown. (This means reporting your income, and depending on your profits, you may need to pay income tax or business taxes.)

In some lands, the Crown requires a share not just of the gold you gather, but of the goods you trade along the Coinstream. (this is known as sales tax, VAT, or GST, depending on the country where you do business.)

If you offer wares that are carried to patrons through the clouds, (like paid subscriptions, ebooks, downloads and other digital products that are transmitted automatically) the rules of trade may depend not on where your ship sails, but on where your patrons live, and the share of your coin may need to be paid to the Crown in other kingdoms. (When selling digital products, you may need to collect tax based on where your subscriber lives, not where you are.⁴)

The waters grow swifter and more choppy here, and hidden rocks lie beneath the foam, waiting to catch the unwary. Knowing these currents exist will help you steer your craft with greater care. It is always worth studying the charts of your own land and the lands of your patrons, and seeking a seasoned guide (consulting a specialist tax advisor) if the rapids run too wild to navigate alone.

The ribbon-finned Stripe is neither friend nor foe along the Coinstream, it is simply one of the creatures that swims its gilded depths. Knowing its nature will help you sail more surely through the strange currents.

With awareness, preparation, and a steady hand on the tiller, you can cast your nets with confidence, gather your coin with care, and carry your treasures safely ashore.

May your sails be filled with the winds of creativity and your holds be filled with gold,

Disclaimer:
This guide is intended for general information and creative exploration only.
It does not constitute financial, tax, or legal advice.
Everyone’s circumstances are different, and if you are unsure about your obligations, you should seek guidance from a qualified professional familiar with the rules in your country and situation.

If you have any questions, please ask them in the comments and I’ll do my best to answer, or join me in the Wonderer’s Wood (subscriber chat) for the next Magic Bean Exchange later in the week.

The Magic Bean Exchange

1. For most Stripe accounts:

• Local (domestic) cards are charged at 1.4% + 20p per transaction (UK accounts) or 1.4% + 30¢ (US accounts).

• International cards (issued outside your country) are charged at 2.9% + 20p (UK) or 2.9% + 30¢ (US).

Fees may vary slightly depending on your country and account settings; check your Stripe dashboard for the exact rates that apply.

2. Note on Stripe payouts: When you first create a Stripe account, your first payout will usually take between 7 to 14 days, depending on your country and Stripe’s internal review process. After the first payout is successfully completed, you can typically choose your payout schedule to be daily, weekly, or monthly, based on your preferences and Stripe’s available settings for your region. Check your Stripe dashboard for the most up-to-date payout options.

3. To use the template, you’ll need to download it from Google Drive and open it using Excel Online for free at office.com. You'll just need a free Microsoft account to sign in. (You can also open it with a desktop version of Excel, if you have one installed.)

4. Rules vary widely between countries, and some regions require VAT to be collected from the very first sale. Stripe provides detailed guides on managing sales tax, VAT, and GST through their platform. You can find more information here, or by selecting Tax from the menu on your Stripe dashboard. Substack also have some help guides here. Check the latest guidance or speak to a professional advisor if you're unsure about your specific situation.