Running a shop with Stripe as Non-US Company? You Might Be Losing 30% of Your Sales

We can all agree that starting an e-commerce business has its challenges.

Finding your niche. Setting up the store. Finding winning products. Deciding on your target market. There are a lot of things to do.

When we launched our first store and tested different markets I was overwhelmed by how much easier it was to sell to the U.S. market compared to my other tests.

People in the U.S. seemed to be just used to pull out their credit card and buy stuff online. There was just less friction of trust and how-to, which I usually found in many other countries.

Despite the obvious advantages of marketing our store to the U.S., there was an important problem of doing so as a non-US business that was going to cost us tens of thousands of dollars in the next months and we still didn’t know it.

After the store was set up and we hit our first profitable campaign we started to scale, reaching close to $50k in sales in a couple of weeks.


When sales are good and so is your profit margin it’s easy to oversee some problems that are costing you a significant bite of your results.

It took several weeks more, until the campaigns were not so profitable anymore, to realize that something was causing a bleed in our conversion rate. From 7% of users that reached the checkout, barely 5% of users were completing it.

At the beginning, we thought that it was something normal and people just needed a more convincing angle to complete the entire checkout process.

After contacting some of our abandoned checkout customers directly and gathering some feedback, we realized that the problem we were facing was that customers were not able to pay for the order.

We ran our store as a Spanish company, receiving the payments through our local Paypal and Stripe accounts.

Most of people chose to pay via Paypal due to a problem related with how Shopify displays the Paypal express checkout option, which doesn’t give you clear information about the failed payments from people trying to buy your store products.

Fortunately with more volume, also more people started trying to pay via our Stripe credit card processor, and there is where we found the first signs of the problem.


See those Failed payments?

We also had a smaller percentage of Blocked status payments.

Now, when you contact Stripe and ask them what is the reason for those, they can do something about the Blocked payments and adjust their security rules so you can reduce those.

However, if you are a Non-US company, selling your products to US customers, there is a high chance you are going to see a good amount of those Failed payments and Stripe can’t do anything about them.

In our case, running as a Spanish business, the amount of failed payments reached 32% of our total payment transactions. Now when I think about it, it was a freaking miracle we made our store profitable in the US with this problem.

The Reason Behind Stripe’s Failed Payments

It turns out that US banks (and probably UK and other countries as well), take the liberty of overprotecting their customers by limiting the payments they make with their credit cards to only local businesses. 

What this means is that, by default, a significant amount of US citizens will have their transaction blocked when trying to order something online in a store which is not in the US.

How do they determine that the store is not in the US?

Here is where the payment gateway comes into play. If you have opened a Stripe account from Spain like it was our case and you provide your Spanish company registration, Stripe will communicate to the customer’s bank that the transaction is placed in a store from Spain.

At that moment, the customer bank fires their security rules and blocks the payment on their side.

The same happens with Paypal. Now, in Paypal the percentage can be smaller as some people will pay via their Paypal balance and account and won’t use their credit card, which means their bank won’t block the transaction.

This however, doesn’t mean you are not losing also Paypal sales because of the same problem. You are just not seeing those, as Paypal doesn’t show the failed credit card payments like Stripe does.

Is there something you can do about blocked payments?

Not really. We did manage to get in touch with some of our customers and have them contact their banks. Some of them wanted our products so much they did the extra effort. But do you really want to go through that for 32% of your sales?

This problem requires prevention and not a solution after the payments have been blocked.

How We Started Operating as a US Company Without Being a US Company

In order to fix the problem, like many of you probably though of, we began researching the possibility of opening a US company.

Having a US company allows you to register a US payment gateway account and that means that your customer bank will see that they are making a payment to a US business, not blocking any payments for security reasons.

This solution would definitely fix our sales loss but creating a US company has its costs too and especially, it’s a lot of administrative work to create and maintain.

I hate administrative work. It’s the type of work that you need to start working, but doesn’t really bring any kind of value.

So I figured out there must be another solution to fix the technical problem of payments being blocked, after all, we only needed that our payment gateway communicated to our customer’s bank that they are making the payment to a US gateway.

Open a Stripe account in the US

What I like about Stripe, is that they look forward to our business. From day one we had a very good communication with our account manager and they were looking forward to provide solutions.

So I asked them: What do you need to open a US Stripe account for us and fix this problem?

It turns out that Stripe can open a US payments account for you, as long as you can provide the following three things:

  • An Employer Identification Number (EIN)
  • A US Bank account
  • A US Address

Contrary to what many people think, this is doable without needing to actually create a US company.

Obtaining an Employer Identification Number (EIN) as a Foreign Company

In order to obtain an EIN as a Foreign Entity, you just have to follow the steps of the IRS described here.

We choose the telephone application, which was very fast, you only need to provide your local company information and answer a few questions.

You will get your EIN number during the same call and they will send you the original document proof to your local address.

Getting a US Bank Account Without Going to the US

In my previous post about How To Get Rid of Paypal (or Stripe) Currency Conversion Fees, I give you some tips on how to obtain a US Bank account through the currency exchange service of World First.

This account can not only help you reduce your currency conversion loss significantly, but it will also give you the possibility to provide Stripe (and Paypal) with a US Bank account on your name.

World First will provide you with this account as part of their set up and without any additional work or costs for you. In my previous post you can also find a discount coupon for their services.

Getting a US Address

Obtaining a US Address turned out to be the easiest part of the process for us, since we already worked with Viabox.

They give us a local address in Portland, with the optional service of forwarding any mail to our local address.

We are all set

With our EIN number, our US bank account and our address, we are ready to apply for a US Stripe account.

If you have already an account with them, the US account will be set as a secondary one and you will be able to use both.

In our case, we were able to have the new account ready and set up with our Shopify store in a couple of days, but in order to have the account fully approved for daily (yeah!) withdrawals, they need to receive a copy of the IRS EIN document that we received after a couple of weeks.

We can use also this process for obtaining a Paypal US account.

In case you are wondering, Shopify Payments via Stripe doesn’t accept this procedure as their legal team seems to be different from Stripe and they are also less committed to find solutions than our Stripe reps.

Setting Up Your Store With Your Brand New US Payment Gateway

This step might seem obvious but we had some issues with it.

The correct way to do it is to deactivate your current Stripe payment processor from Shopify.

Then log into Stripe, it will ask you which account you want to use (the old one or the new US one).

After you are logged into Stripe, open Shopify settings again and re-enable Stripe. This time it will connect to your US account.

Important: Don’t change your Shopify store address to your US address until you have set up your new Stripe account. Once your store address is set to the US, Shopify will not let you choose Stripe but only Shopify Payments as new set up. If you change it after you have configured the gateway all should be good.

The Result in a Nutshell


Our Failed payments have almost disappeared. Our customers banks see the payments to our store as a local transaction within the US.

We improved our conversion rate on completed payments by over 30%.

We now get daily payment settlements from Stripe.

We are saving almost 2% on currency conversion fees.

Now it’s your time to get this method to work for your business.

Have you been able to start operating like a US store using this method? What are the results?

Share your story in the comments.


  1. Khan March 18, 2020
    • Todor March 18, 2020
  2. Natan Mercedes August 29, 2020
    • Todor December 22, 2020
  3. Patrik February 14, 2021
    • Todor February 14, 2021
      • patrik February 15, 2021
        • Todor February 28, 2021
  4. Nicolas Rodriguez May 27, 2021
    • Todor June 28, 2022

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