Stripe Xero Integration: Sync Payments Automatically

If you accept payments through Stripe and manage your books in Xero, you already know the pain. Every transaction creates at least three data points -- the gross payment, the Stripe processing fee, and the net payout to your bank -- and none of them arrive at the same time. Without a proper Stripe Xero integration, your finance team is left matching CSV exports to bank statements line by line, chasing fee discrepancies, and wondering why the numbers never quite add up.

This guide covers everything you need to connect Stripe to Xero and keep payments, fees, and payouts in sync automatically. We cover the setup process, European fee rates, clearing account architecture, reconciliation workflows, subscription billing, and the most common problems businesses run into -- all from a European perspective with real EUR figures.

Whether you process 20 payments a month or 2,000, getting your Stripe and Xero integration right saves hours of bookkeeping every week and eliminates the reconciliation errors that lead to incorrect VAT returns and cash flow blind spots.

The Stripe integration Xero offers serves two distinct purposes, and understanding the difference is critical before you set anything up.

1. Payment Gateway on Xero Invoices
When you enable Stripe as a payment service in Xero, your online invoices get a "Pay Now" button. Customers can pay by credit card, debit card, Apple Pay, or Google Pay directly from the invoice. The payment is processed through Stripe, and Xero automatically marks the invoice as paid. This is ideal for businesses that send invoices to clients and want to get paid faster.

2. Stripe Direct Feed for Transaction Syncing
The Stripe direct feed creates a virtual "bank account" in Xero that represents your Stripe balance. It pulls in every transaction -- charges, fees, refunds, and payouts -- automatically. This gives you a complete picture of money moving through Stripe without manually importing anything. The feed handles card payments, SEPA Direct Debit transactions, and payouts to your bank account.

Most businesses benefit from setting up both. The payment gateway gets you paid; the direct feed keeps your books accurate. Together, they give you a fully automated payment-to-reconciliation pipeline that connects Stripe to Xero without manual data entry.

For a broader look at how Xero connects with your entire financial stack, see our Xero integrations overview.

There are three ways to integrate Stripe with Xero, depending on what you need. You can use one, two, or all three.

Option 1 -- Connect from Xero Settings (Payment Gateway)

This enables the "Pay Now" button on your Xero invoices:

1. In Xero, go to Settings > Payment Services
2. Click Add Payment Service and select Stripe
3. Name the connection (e.g., "Stripe - Card Payments")
4. Select the bank account where Stripe deposits will land
5. Choose whether to absorb processing fees or pass them on to customers (surcharging)
6. Select which card logos to display on your invoices
7. Click Connect to Stripe and authenticate with your Stripe credentials

Once connected, every new invoice you approve will include a Stripe payment link automatically.

Option 2 -- Connect from a Xero Invoice

A quicker route if you are setting up for the first time:

1. Open any approved invoice in Xero
2. Click Add Payment Service at the bottom of the invoice
3. Select Stripe and follow the authentication steps

This achieves the same result as Option 1 but starts from the invoice rather than Settings.

Option 3 -- Set Up the Stripe Direct Feed

This is separate from the payment gateway and creates a Stripe "bank account" in Xero that pulls in all transactions:

1. Go to Settings > Bank Accounts
2. Click Add Bank Account
3. Search for "Stripe" in the bank search
4. Authenticate with your Stripe credentials
5. Xero creates a Stripe account in your chart of accounts

The direct feed starts pulling in transactions immediately. Historical data import is typically limited to around 90 days, so set this up as early as possible to avoid gaps. You can link Stripe to Xero through all three options in under 10 minutes.

Fee handling is the single biggest source of confusion when working with Stripe and Xero. Understanding how fees are recorded, what European businesses actually pay, and why the numbers sometimes do not match will save you hours of troubleshooting.

How Stripe Fees Are Recorded

When a customer pays EUR 100 through Stripe, the direct feed in Xero records two separate lines:

• +EUR 100.00 -- the gross payment received (coded to your revenue account)
• -EUR 1.75 -- the Stripe processing fee (coded to "Merchant Fees" or "Bank Fees")

Two days later, Stripe pays out EUR 98.25 to your bank account. That payout appears on your bank statement, and you reconcile it against the Stripe clearing account in Xero. The clearing account nets to zero, and your books are accurate.

Set the contact as "Stripe" and the expense account as "Merchant Fees" or "Bank Fees" -- whichever your chart of accounts uses. Be consistent; mixing accounts makes reporting unreliable.

European Stripe Fee Rates

Most guides quote the US rate of 2.9% + $0.30. That is not what European businesses pay. Here are the actual Stripe Xero integration fees for businesses in the EEA:

Card Type	Rate
EEA standard cards	1.5% + EUR 0.25
EEA premium cards	1.5% + EUR 0.25
UK cards	2.5% + EUR 0.25
International cards (non-EEA)	3.25% + EUR 0.25
Currency conversion surcharge	Additional 2%
SEPA Direct Debit	EUR 0.35 (capped at EUR 5)

There are no setup fees and no monthly fees -- you only pay per transaction. Stripe Payments Europe Limited is registered in Ireland, which is relevant for VAT treatment.

Important for EU businesses: Stripe processing fees are subject to reverse-charge VAT. Since Stripe invoices from Stripe Payments Europe Ltd. as a B2B service, your business must self-account for VAT under the reverse-charge mechanism. In Xero, apply the "Reverse Charge" or "No VAT" tax rate to the fee expense line and account for the VAT through your VAT return. Getting this wrong means your VAT return is incorrect.

Why Stripe Fees Don't Match (and How to Fix It)

If your Xero Stripe fees are not matching your bank deposits, the cause is almost always one of these:

• Bundled payouts -- Stripe aggregates multiple transactions into a single bank deposit. The payout on your statement does not match any single feed entry because it combines several.
• Payout timing -- Stripe's standard settlement is T+2 (two business days). Payments received on Friday may not appear in your bank until the following Wednesday.
• Currency conversion -- if you accept payments in GBP or USD but settle in EUR, exchange rate differences create small discrepancies.
• Refunds deducted from payouts -- Stripe deducts refunds from your next payout rather than creating a separate transaction.

To fix mismatches during reconciliation, use the Adjustments button in Xero's Reconcile tab. Select "Bank Fees" as the account and enter the difference. For bundled payouts, use Find & Match and select all the individual transactions that make up the payout.

Understanding the payout lifecycle is essential for accurate reconciliation of your Stripe payouts in Xero. Here is the flow:

1. A customer pays EUR 100 via Stripe
2. Stripe holds the gross amount in your Stripe balance
3. Stripe deducts its fee (e.g., EUR 1.75 for an EEA card)
4. On the rolling T+2 schedule, Stripe transfers EUR 98.25 to your bank
5. The Xero Stripe feed shows the charge (+EUR 100) and the fee (-EUR 1.75)
6. Your bank feed in Xero shows the deposit (+EUR 98.25)

The Clearing Account Explained

The Stripe "bank account" in Xero functions as a clearing account. When Stripe receives a payment, the clearing account balance increases. When Stripe pays out to your bank, the clearing account balance decreases. Over time, the clearing account should net to approximately zero -- any remaining balance represents money that Stripe is holding but has not yet paid out.

This architecture prevents double-counting. Without a clearing account, you would record the Stripe payment as income and the bank deposit as income, effectively counting the same money twice. The clearing account acts as the bridge: money enters through Stripe, sits in transit, and arrives at your bank. Each step is recorded once.

Matching Payouts to Bank Deposits

When a Stripe payout lands in your bank account:

1. Go to the Reconcile tab for your bank account in Xero
2. Find the Stripe deposit line on your bank statement
3. Click Find & Match
4. Check "Show Spent Items" to display both the payment and fee lines from the Stripe clearing account
5. Select all items that make up the payout (there may be multiple charges and fees)
6. If the total matches the bank deposit, click Reconcile
7. If there is a small difference, use Adjustments to post it to Bank Fees or Currency Gains/Losses

Reconciliation is where the Stripe Xero integration either saves you hours or creates headaches. With the direct feed configured correctly, most of the work is automated.

Automatic Matching via Direct Feed

When the Stripe direct feed is active, Xero pulls in each transaction and suggests matches against your outstanding invoices. For straightforward payments -- one customer pays one invoice -- reconciling Stripe payments in Xero is a single-click confirmation. Xero's matching algorithm identifies the payment, links it to the correct invoice, and accounts for the fee on a separate line.

For businesses processing 50-200 transactions per month, this reduces reconciliation time from several hours to 15-20 minutes. The key is consistency: always code fees to the same account, always use "Stripe" as the contact, and review the suggested matches weekly rather than letting them pile up.

Handling Refunds and Chargebacks

Refunds appear as negative transactions in the Stripe feed. Code them back to the original revenue account so your income figures are accurate. If you issued a partial refund, the feed shows only the refunded amount.

Chargebacks are more complex. When a customer disputes a charge, Stripe debits the disputed amount from your balance plus a chargeback fee (typically EUR 15). Record the debit against your revenue account and the chargeback fee as an expense under "Merchant Fees" or a dedicated "Chargeback Fees" account.

Reconciling Stripe Invoices

For businesses sending Xero invoices with the Stripe "Pay Now" button, the Stripe Xero invoice integration works as follows: when a customer pays the invoice, Xero automatically marks it as paid. The payment (net of fees) flows through the Stripe feed and eventually arrives as a bank deposit. You reconcile the payout against the deposit using Find & Match, and the invoice, payment, fee, and bank deposit are all linked. Syncing Stripe invoices to Xero this way means no manual payment recording at all.

One thing every competitor guide avoids is an honest comparison -- because each one is selling their own tool. Here is an objective breakdown to help you decide what works for your business.

Xero's Built-In Stripe Direct Feed

Pros: Free, native to Xero, no extra subscription, two-minute setup, high reliability (no third-party tokens to expire).
Cons: Limited historical import (approximately 90 days), no per-transaction customisation, can struggle with multi-currency accounts, no summary/daily sync mode, basic refund handling.

Third-Party Tools (Synder, PayTraQer, Bankfeeds.io)

Pros: Better fee tracking with dedicated line items, summary sync options (daily or weekly totals instead of individual transactions), full historical data import, stronger multi-currency support, automatic refund and chargeback handling, tax code mapping.
Cons: Additional cost (typically EUR 15-50 per month), added complexity, another subscription to manage, dependent on API tokens that can expire and break the sync silently.

Feature	Native Stripe Feed	Synder	PayTraQer	Bankfeeds.io
Cost	Free	From EUR 15/mo	From EUR 20/mo	From EUR 15/mo
Per-transaction sync	Yes	Yes	Yes	Yes
Summary/daily sync	No	Yes	Yes	No
Fee tracking	Basic	Detailed	Detailed	Automatic
Refund handling	Basic	Automatic	Automatic	Automatic
Multi-currency	Limited	Good	Good	Limited
Historical import	~90 days	Full history	Full history	Limited
Setup time	2 minutes	10-15 minutes	10-15 minutes	5 minutes
Reliability	High (native)	Token-dependent	Token-dependent	Token-dependent

Which Should You Choose?

• Low volume (under 50 transactions/month), single currency -- the native feed is more than sufficient. It is free, reliable, and handles straightforward reconciliation well.
• High volume, multi-currency, or complex refund handling -- a third-party tool pays for itself in time saved. Synder and PayTraQer both handle edge cases that the native feed cannot.
• Subscription billing with many recurring charges -- consider Chargebee or similar middleware alongside a third-party sync tool, especially if you use Stripe Billing for tiered or usage-based pricing.

For subscription businesses or any company that bills clients on a regular schedule, Stripe and Xero offer a powerful auto-pay workflow:

1. Create a repeating invoice template in Xero with the amount, frequency, and payment terms
2. Enable Stripe auto-pay on the template
3. The customer receives the first invoice with a "Pay Now" link and authorises their card
4. Every subsequent invoice is charged automatically on the due date -- no action required from the customer or your team
5. Each payment flows through the Stripe direct feed for automatic reconciliation

This works well for fixed recurring amounts -- retainers, monthly subscriptions, membership fees. For more complex models (usage-based billing, tiered pricing, free trials, mid-cycle upgrades), use Stripe Billing directly. Note that Stripe Billing invoices do not automatically create Xero invoices -- you will need middleware such as Chargebee or a third-party sync tool to bridge the gap.

Chargebee, available from its Rise plan, sits between Stripe and Xero and syncs customers, plans, invoices, credit notes, payments, refunds, and multi-currency data. For high-volume subscription businesses processing hundreds of recurring charges, this middleware layer is worth the investment.

For more on automating your Xero workflows beyond payments, see our Xero automation guide.

If you sell to customers across the EU, handling multiple currencies correctly is essential. Here is how to set up multi-currency with your Stripe Xero integration:

1. Enable multi-currency in Xero -- go to Organisation Settings and activate the currencies you accept (EUR, GBP, USD, etc.)
2. Configure Stripe to accept payments in those currencies. Stripe can either convert to your settlement currency automatically or hold separate currency balances.
3. Watch for exchange rate differences -- Stripe uses its own conversion rate, which may differ slightly from Xero's daily rate. Small discrepancies are normal and should be posted to a "Currency Gains/Losses" account during reconciliation.

SEPA Direct Debit is a major payment method across the eurozone, and Stripe supports it at EUR 0.35 per transaction (capped at EUR 5). SEPA DD transactions appear in the Stripe direct feed exactly like card payments -- gross amount plus fee on separate lines. Reconciliation follows the same workflow. The only difference is settlement timing: SEPA DD payments can take 5-6 business days to settle compared to 2 days for card payments.

Stripe processes payments in over 135 currencies and operates in 47 countries. Combined with Xero's multi-currency support, this means you can accept, track, and reconcile international payments without leaving either platform. The key is ensuring your chart of accounts includes a currency gains/losses account for the inevitable small differences.

Even with the integration running smoothly, issues crop up. Here are the most common problems and their fixes.

Duplicate Transactions

Cause: Running both the native Stripe direct feed and a third-party sync tool (Synder, PayTraQer, etc.) at the same time. Both pull in the same transactions, creating duplicates.
Fix: Use one or the other -- never both simultaneously. If you switch from the native feed to a third-party tool, disconnect the direct feed first.

Fees Not Matching

Cause: Bundled payouts aggregate multiple transactions into a single bank deposit. The deposit amount on your statement does not correspond to any single entry in the Stripe feed. Currency conversion and payout timing differences compound the problem.
Fix: In the Reconcile tab, click Find & Match and select all the individual transactions that make up the payout. Check the Stripe dashboard for a transaction-level breakdown if needed. Use Adjustments for small residual differences.

Feed Disconnected

Cause: The Stripe or Xero API token has expired, or account permissions have been revoked during a security review.
Fix: Go to Settings > Bank Accounts > Stripe > Manage and reconnect. For third-party tools, check the tool's dashboard for sync status and re-authenticate if needed.

Country Mismatch Error

Cause: Your Stripe account country does not match your Xero organisation country. For example, a Stripe account registered in the UK connected to a Xero organisation set to Ireland.
Fix: Ensure both platforms are configured for the same country. If you operate in multiple countries, you may need separate Stripe accounts for each.

A well-configured Stripe Xero integration eliminates the manual reconciliation work that drains hours from your week. With the direct feed, payment gateway, and a clear understanding of how fees, payouts, and clearing accounts work, you can process hundreds of transactions with minimal manual intervention.

But the integration is only one piece of the puzzle. As your payment volume grows, you need an automation layer that handles the exceptions -- mismatched fees, multi-currency discrepancies, refund coding, and the reconciliation edge cases that the native feed does not resolve on its own.

That is where FinTask fits in. Our AI-powered platform sits on top of your Xero instance and automates the reconciliation workflow end to end -- matching Stripe transactions, coding fees correctly, handling refunds, and flagging anomalies before they become problems. No more manual matching, no more end-of-month reconciliation marathons.

Ready to see what automated reconciliation looks like? Book a free demo and we will walk through your specific Stripe and Xero setup. Or explore our full Xero integrations suite to see how FinTask connects your entire financial stack.