Whenever anyone mentions online payment processors, two names are sure to pop up: Stripe and Paypal. But which one would serve your business the best?
Put simply, Stripe is a better choice for businesses that need a flexible, customizable, and highly integrated processing platform. PayPal, on the other hand, offers a secure and more user-friendly payment processing solution worldwide.
Read on to learn the difference between Stripe and PayPal in greater detail, including how they compare in terms of fees, features, and compatibility.
Stripe Vs Paypal: A Quick Overview
Before we go about comparing Stripe to Paypal, why not see how they stack up in general from the table below?
| Factors | Stripe | PayPal | |
| Ideal For | Multichannel sellersBusinesses that need a lot of customizationInternational commerceBusinesses that need big data | Businesses that need to accept PayPalLow-volume businessesInternational commerce | |
| Online Payments Rate | 2.9% + $0.30 | 2.59%-3.49% + $0.49 per transaction | |
| Access to Funds Times | 2 Days (Average) | Immediate | |
| Countries Available | 46+ | 200+ | |
| Payments Handled 100% on Your Site | Yes | No | |
| Standout Features | Top-tier developer supportAdvanced security toolsStrong multi currency support | Enormous proprietary ecosystemEasy to useStrong international support | |
| What’s Missing | Native POS appBundled pricing plans for advanced features | Competitive pricingACH payment option | |
How Are Stripe and Paypal Different?
Despite their similarities, Stripe and PayPal have some crucial differences as well. While Stripe focuses on tailored solutions for online merchants, PayPal caters to small businesses looking to get started quickly.
Here, we overview the similarities and the uniquenesses of these two payment processing platforms before going into more detail.
What’s Not So Different Between Stripe and Paypal?
As these third-party payment processors are designed for online and e-commerce businesses, they share some similar features. Such as:
- Processing of both online and in-person payments
- Customizable and prebuilt checkouts
- All-inclusive rates
- Similar chargeback fees
- Encrypted data security and fraud detection
- Integrable with eCommerce
- Compatible with multiple payment methods
- Worldwide eCommerce customer support
What are Stripe’s Unique Services?
There are a number of unique features that set Stripe apart from PayPal. These include:
- A powerful API, allowing developers to create custom payment solutions and integrations
- A larger number of available currencies for processing transactions (over 135 currencies)
- Advanced tools for managing subscriptions, like recurring billing and trial periods
- In-depth analytics and reporting tools for understanding customer behavior
- Payment facilitation services for improving payments across platforms like marketplaces and crowdfunding sites
- Support for various business models such as platforms, software-as-a-service (SaaS), and mobile applications.
What are PayPal’s Unique Services?
And likewise, PayPal has some distinct features of its own that make it different from Stripe, such as:
- Instant access to funds in your PayPal account
- Surprisingly affordable micropayment processing fees
- PayPal.Me, a personalized payment link allowing you to send and receive payments easily
- PayPal Credit, offering payment plans and extending credit to customers
- PayPal Here, a mobile card reader for in-person transactions
- Automated invoicing and payment tracking tools, catering specifically to freelancers and service providers
- A large, established user base, which may help instill trust in potential customers more familiar with the PayPal brand
Stripe Vs Paypal: Key Factors to Compare
If their unique services don’t make it clear which would work best for your business, the following factors can help you figure it out.
Fees and Pricing Structures
Both Stripe and PayPal charge competitive fees, but they differ in their pricing structures.
While Paypal charges 2.29% + a fixed 9¢ fee per transaction in the US, Stripe charges a flat rate of 2.9% + 30¢ per transaction. However, Stripe’s fees tend to become more favorable as your monthly payment volume increases since they offer volume discounts for eligible businesses.
Yet, the overall cost will depend on your business’s sales, transaction volume, and preferred payout method. You can get a clear picture from this quick comparison shown in the below table.
| Factors | PayPal | Stripe |
| Swipe/Chip Transaction Fees | From 2.29% plus fixed fee of 9 cents | From 2.9% plus 30 cents |
| Keyed Transactions | From 3.49% plus fixed fee of 9 cents | From 2.9% plus 30 cents |
| Monthly fee/Set-up Cost | Fees vary/no setup cost | No monthly fees or set up costs |
| ACH Transaction Fee | N/A. Only available with Braintree integration | 0.8% up to $5 |
| Chargeback fee (USD) | Fixed fee according to currency ($20 in the US) | $15.00 fee regardless of the outcome of the dispute |
| Micropayments (Purchases < 10%) | 4.99% + fixed currency fee | 2.9% + $0.30 |
| Online Invoicing | No subscription fee for sending invoices online. Pay only when you get paid. | 0.4% per paid invoice |
| International Payment fees | + 1.50% per transaction, with a fixed fee per currency. 4.00% currency conversion, or such other amount as may be disclosed to you during the transaction | +1.5% for international cards and an extra 1% for currency conversion |
| Refund fees | Customers receive the full cost of service, but the merchant does not receive the transaction fee in return | Stipe does not return original transaction fees |
| Cost for Card Readers | Card readers cost $29 and $79 for each additional device | $59 |
Available Currencies and Cross-border Transactions
In terms of available currencies, Stripe has the upper hand, allowing businesses to process transactions in over 135 currencies. PayPal, by contrast, supports 25 currencies but has a broader reach globally with 200+ countries, than Stripe’s 46.
For cross-border transactions, it is essential to consider the conversion fees too. Stripe charges a 1% conversion fee for international transactions, whereas PayPal’s conversion fee ranges from 3 to 4%, depending on the countries involved.
Integration and Customization
Now it’s where Stripe truly outshines PayPal. With its powerful API and developer-friendly platform, it allows businesses to integrate and customize payment solutions as per their needs seamlessly.
This flexibility makes Stripe the go-to platform for software companies, marketplaces, and those requiring recurring billing and subscription management. Besides, Stripe offers various SDKs and libraries, such as Ruby, Python, and Java, to simplify the integration process.
PayPal, too, offers integrations with numerous eCommerce platforms and easy-to-use checkout options. However, they don’t offer the near-same level of customization options as Stripe. That’s why it’s better suited for small businesses and freelancers looking to simplify their payment processing.
Processing Speed
When faster fund transfers are your priority, PayPal is always the better choice. After all, you don’t get immediate access to your funds with Stripe as with PayPal Standard.
However, you do have to wait two to four days for those funds to be in your bank account. Yet, the duration is similar to the time it takes to access funds through Stripe.
Customer Support
Customer support is vital for any payment processing platform, and both Stripe and PayPal offer different customer service channels.
For instance, with PayPal, you can expect 24/7 customer support through phone, email, and live chat, as well as an extensive Help Center, community forums, and social media.
While Stripe also provides similar support channels, what acts as its winning factor is its top-notch developer support and resources. It provides thorough documentation and developer-exclusive guides, making it much easier for them to build and maintain custom integrations.
Stripe even has an active and engaged developer community that often seeks help from, offering more specialized assistance and quicker problem resolution.
Security and Fraud Protection
Stripe and PayPal are committed to security and fraud protection, ensuring that all transactions are handled quickly and securely.
They both utilize industry-standard encryption and token methods to protect sensitive data and comply with Payment Card Industry Data Security Standard (PCI-DSS) regulations.
Stripe has a built-in machine learning-based system called Radar, which detects and prevents fraud actively and minimizes false positives. It continuously learns from billions of transactions, fine-tuning the algorithm to help businesses reduce fraud loss and chargebacks.
PayPal, on the other hand, employs its robust, adaptive fraud management filters and risk models, which offer protection and prevent unauthorized transactions. Besides, PayPal offers the Seller Protection program to safeguard businesses against chargebacks, reversals, or claims.
Data Portability
Data portability is essential for businesses to move their payment data to other providers if needed.
And as crucial as it can be, Stripe offers the best option. With Stripe, your business isn’t locked into using it as the sole payment gateway. This is because you can easily access and retrieve customer subscriptions, invoice information, and similar credit card data through PCI compliance.
PayPal, however, has its data portability significantly limited, making scaling, transitioning, or expanding your business operations more challenging and time-consuming. After all, downtimes and complex workarounds will be very likely during migrations.
Payment Handling
Paying directly on websites is crucial to providing a seamless customer experience, and Stripe makes it easy.
Stripe’s embedded payment form allows customers to enter their payment details directly on your website without being redirected to another page, making the payment process smooth and hassle-free.
Contrastingly, PayPal requires customers to leave the merchant’s website and complete the transaction on PayPal’s platform. It might not be a significant drawback for smaller businesses, but this often leads to increased abandoned carts.
Accessibility and User Experience
A payment gateway’s accessibility and user experience are essential factors in determining its suitability for businesses.
Stripe’s user interface is sleek, intuitive, and straightforward, making it easier for businesses to navigate and manage their payment processing. Its developer-friendly platform simplifies API integrations, enabling you to focus on crafting the perfect user experience for your customers.
PayPal, known for its ease of use, provides an effortless process for end-users to make payments using their preferred methods. Besides, its familiarity among worldwide users brings a sense of trust and reliability when transacting online.
However, for businesses requiring more in-depth customization and control, its user experience isn’t always as versatile and feature-rich as Stripe.
In-Store Sales
Both Stripe and PayPal support in-store sales, but they approach it differently. Stripe partners with various point of sale (POS) providers, such as Shopify and Lightspeed, with pre-certified, end-to-end encrypted EMV card readers.
PayPal, meanwhile, has its own hardware solutions like PayPal Zettle, a full-fledged POS hardware system. Besides the free card reader, these hardware options allow businesses to accept multiple payment methods, including credit/debit cards and contactless payments.
Who Should Choose Stripe?
Stripe is an excellent choice for businesses that require more customization, flexibility, and integration capabilities.
It’s especially well-suited for software companies, marketplaces, and businesses that need recurring billing and subscription management. If your business requires developer-friendly tools and superior documentation for custom integrations, Stripe is the way to go.
Don’t Have Your Verified Stripe Account Yet? Get One with Merchantta
With Merchantta, becoming a verified Stripe account owner is easier than ever. No more worries if you don’t have the time to set one up yourself or live in an unsupported country; we’ve got you covered.
Our team will help you obtain a fully verified Stripe account, complete with US-verified card, bank, and address. Additionally, we provide ongoing support to ensure your Stripe account runs smoothly without hiccups.
Here at Merchantta, we offer seamless, secure access to a powerful payment platform. Not only does this save you valuable time and effort, but it also allows you to focus on what really matters – growing your business.
Who Should Choose PayPal?
PayPal is ideal for small businesses, freelancers, and those who require quick and easy setups with minimal customization.
It’s particularly popular among e-commerce platforms, where customer trust plays a significant role. PayPal’s well-known and widely accepted brand offers customers familiarity and reassurance during their transactions.
Also, PayPal’s in-house hardware solutions for in-store sales can be an attractive option for brick-and-mortar stores that prefer an all-in-one solution for their payment needs.
Frequently Asked Questions
Do you have questions about Stripe, PayPal, or choosing the right payment provider for your business? The below set of common questions and answers may help clarify further.
Which one is cheaper, Stripe or PayPal?
While Stripe and PayPal have similar fee structures, the actual cost varies based on volume discounts, non-profit pricing, and custom pricing for large businesses. Typically, both providers charge 2.9% + $0.30 per transaction for their base pricing.
Can I use Stripe and PayPal together?
Why not? Many businesses offer both options to meet broader customer preferences, ultimately enhancing the user experience and attracting international customers. However, this doesn’t mean you can receive PayPal payments through Stripe or vice versa.
Is Stripe as secure as PayPal?
There’s no reason not to be. Both providers prioritize security and utilize advanced encryption methods to protect users’ data and prevent fraudulent activities. Notably, they hold a PCI DSS Level 1 certification, the highest security certification for payment processors.
Can I open a Stripe account without bank details?
No, you cannot open a Stripe account without entering your bank details. When setting up a Stripe account, you must enter your bank account information, as this is necessary for receiving payouts from Stripe and impossible otherwise.
Conclusion
So, that’s that. The choice ultimately depends on your specific business needs and priorities.
If you prefer a customizable, developer-friendly platform with seamless on-site payment processing, Stripe is the better option. But your business might benefit more from PayPal if simplicity, customer recognition, and in-store hardware solutions are more important to you.
Yet, whichever you choose, it’s crucial to consider the transaction fees, integration capabilities, and overall compatibility with your business model.
