Payment Processing

Stripe vs PayPal (2023)

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These days having a reliable payment processor is essential for businesses to thrive. Whether you run an e-commerce store or offer services online, providing a seamless payment experience for your customers is crucial.

When it comes to payment processing, two prominent names stand out: Stripe and PayPal. Both have established themselves as industry leaders, each with its own unique strengths and offerings. Below, we compare the two, focusing on their suitability as payment processing platforms for businesses.

Stripe vs PayPal Comparison Chart

Product NameStripePaypal
WebsiteStart HereStart Here
Transaction feesStarts at 2.9% + $0.30 per transactionStarts at 2.59% + $0.49 per transaction
Online transaction feesStarts at 2.9% + $0.30 per transactionStarts 3.49% + $0.49 per transaction
International fees1% for international cards, plus 1% if currency conversion is required1.50% for international transactions
Chargeback fees$15$20
Accepted Payment MethodsMajor credit cards, 135 international currencies, cryptocurrencies, ACH debit and credit transfers; Venmo transfers are not supported.Major credit cards, 25 international currencies, Venmo transfers, cryptocurrencies, and ACH.
SecurityPCI-compliant, with payment data encryption, fraud, risk detection, and online identity verificationPCI-compliant, with data protection, TLS connection, email confirmations, etc.
Ease of useMore complex setup, but more customizableSimpler setup, but less customizable
IntegrationsIntegrates with a wide range of platforms and appsIntegrates with a wide range of platforms and apps
Best ForLarger businesses that need more customizationSmall businesses and businesses that need a simpler setup

At A Glance: Stripe and PayPal

Stripe, founded in 2010, quickly gained recognition for its developer-friendly approach to online payments. With a focus on simplicity and customization, Stripe offers a robust set of APIs that allow businesses to integrate payment processing seamlessly into their websites and applications.

The company’s commitment to innovation has resulted in a suite of powerful tools, including subscription billing, mobile payments, and international payment support. Today, Stripe is trusted by leading global brands and startups alike for its reliability, scalability, and extensive documentation.

PayPal, on the other hand, boasts a longer history, having been established in 1998. Initially known as a pioneer in online payments, PayPal gained popularity as an alternative to traditional payment methods like checks and money orders.

With its user-friendly interface and widespread adoption, PayPal became synonymous with secure online transactions. Over time, the platform expanded its services to include mobile payments, invoicing, and even peer-to-peer transfers through its subsidiary, Venmo. PayPal’s extensive user base and brand recognition make it a go-to choice for businesses of all sizes.

Credit Card Transactions

When it comes to credit card transactions, Stripe and PayPal are two of the most popular payment processors on the market. Both platforms offer a variety of features and benefits, but they differ in their pricing structures.

Stripe charges a flat rate of 2.9% + $0.30 per transaction, while PayPal’s fees are variable and depend on the type of transaction. For example, PayPal’s fees for online transactions are 2.9% + $0.30, while its fees for in-person transactions are 2.7% + $0.30.

When it comes to fees, Stripe generally offers lower rates compared to PayPal, particularly for high-volume transaction businesses. On the other hand, PayPal has broader acceptance worldwide, making it an advantageous choice for businesses targeting a global audience.

In general, Stripe’s fees are lower than PayPal’s, especially for businesses that process a high volume of transactions. However, PayPal is more widely accepted than Stripe, so it may be a better option for businesses that need to accept payments from a global audience.

Stripe offers seamless credit card processing, supporting all major credit cards such as Visa, Mastercard, American Express, Discover, and more. This ensures that businesses can accept payments from customers using a wide range of credit card issuers.

Similar to Stripe, PayPal also supports major credit cards, allowing businesses to accept payments from customers worldwide. With PayPal, customers can pay using their credit cards even if they don’t have a PayPal account.

PlatformFee
Stripe2.9% + $0.30
PayPal (online)2.9% + $0.30 (online)
PayPal (card present, in-store, and QR code transactions)2.7% + $0.30

Customer Payment Options

Both Stripe and PayPal offer a range of customer payment options, features, and functionalities that cater to the diverse needs of businesses.

Merchant Checkout Options

If you value a seamless customer experience and prefer to keep your customers on your website throughout the entire checkout process, Stripe is an excellent choice. Its integration capabilities allow for a smooth and uninterrupted checkout experience, ensuring that your customers never have to leave your site.

On the other hand, PayPal utilizes an off-page checkout process where customers are temporarily redirected to the PayPal website to complete their purchases. While this method is widely recognized and trusted, it does involve taking customers away from your site.

Pay Later Options

Both Stripe and PayPal offer pay-later options to enhance the buying experience for customers. PayPal offers PayPal Credit, allowing customers to make purchases and pay for them later in installments. Stripe offers a similar solution called Stripe Payments, which enables businesses to offer installment plans or delayed payment options to their customers.

Supported Currencies

Stripe supports crypto payouts, allowing businesses to pay sellers, freelancers, creators, and service providers using cryptocurrencies like USDC. It handles the conversion and payout, while your funds can stay in fiat. However, access to the feature is currently limited to beta users.

PayPal’s app directly supports buying, transferring, and selling cryptocurrencies like Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. You can start with as little as $1 from your PayPal balance. PayPal also prevents unauthorized transfers and offers reimbursement of up to $50,000. Moreover, transferring crypto to your PayPal Balance account or sending it to a friend is easy.

Software Integrations

Stripe can seamlessly integrate with a wide range of e-commerce platforms, including WooCommerce, Magento, Wix, BigCommerce, GoDaddy, and more. This versatility allows businesses to connect their online stores with Stripe’s payment processing capabilities, enabling a smooth checkout experience for their customers.

In contrast, PayPal offers integration with platforms such as Drupal, PrestaShop, Magento, Shopware, WooCommerce, WordPress, and more. This broad compatibility ensures that businesses utilizing these platforms can easily incorporate PayPal’s payment solutions into their websites.

The main distinction between Stripe and PayPal lies in the level of customization they offer for the checkout process. Stripe excels in providing a highly customizable checkout flow, enabling businesses to integrate their shopping carts and tailor the experience to match their brand aesthetics. However, customization on Stripe may require developer knowledge, making it ideal for businesses with IT personnel or technical expertise.

On the other hand, PayPal offers a more straightforward setup process, making it a suitable choice for smaller businesses or those starting out. While it may not offer the same level of customization as Stripe, its ease of use allows businesses without extensive technical knowledge to quickly implement PayPal as a payment option.

It’s worth noting that integrating certain features, like a “Pay With Card” button, may require more development knowledge when using Stripe. However, platforms like WPForms provide seamless integration with both Stripe and PayPal, offering pre-built form templates and addons for easy implementation.

Plans and Pricing

When it comes to pricing, Stripe and PayPal have different approaches in offering their payment processing services.

PayPal follows a tiered pricing structure, where you gain access to more features as you opt for higher-priced plans. With PayPal, you can expect to pay additional fees for advanced functionalities. On the other hand, Stripe adopts a pay-as-you-go pricing model that already includes a comprehensive payment platform and offers customized packages for high-volume sellers.

Stripe’s pricing eliminates the need for monthly premiums to access advanced features, as it charges a small per-transaction fee without requiring a premium subscription. The standard Stripe Connect plan is available at no cost. Alternatively, businesses can choose Stripe Express (for marketplaces) or Stripe Custom (a white-label option that allows businesses to customize the checkout process) for a fee of $2 per account.

PayPal Payments Standard also doesn’t entail a monthly fee. However, PayPal Payments Pro, which provides additional features, comes with a $30 per month charge. Additional functionalities may incur added costs as well. Meanwhile, PayPal’s Payflow Pro plan allows merchants to fully customize their shopping flows but requires a monthly fee of $25 plus an additional $0.10 fee per transaction.

Click here to read our Wise vs Paypal comparison.

Verdict

Choosing between Stripe and PayPal ultimately depends on the specific needs and preferences of your business.

Brand recognition and ease of use play a significant role in the decision-making process. If you prioritize a widely recognized and trusted brand, along with a user-friendly interface, PayPal may be the preferred choice. PayPal’s reputation as a reliable payment solution, coupled with its seamless setup process, makes it appealing, especially for businesses that value simplicity and convenience.

On the other hand, if cost efficiency is a priority and you are comfortable with coding or have IT personnel who can assist, Stripe may be the better option. Stripe offers lower costs, a pay-as-you-go pricing model, and the ability to customize the checkout process. This makes it an attractive choice for businesses looking to optimize their payment processing while keeping expenses in check.

Consider your sales volume and the types of payment forms you expect to accept. Stripe excels in handling multiple payment forms, making it ideal for businesses with high sales volumes and a need for flexibility. If you are already using PayPal and are satisfied with its capabilities, sticking with PayPal may be a seamless choice to maintain continuity in your operations.