Stripe vs. PayPal

Stripe vs. PayPal Compared

Who do we recommend Stripe for?

Stripe is our choice for businesses that engage in a high volume of sales ─ either in person or online ─ and want the ability to accept credit cards and many other forms of payment. Stripe excels because it offers your business competitive pricing and a wide selection of tools. We also recommend Stripe for its completely customizable platform, which can be tailored to match your brand image. 

Stripe lets you accept over 100 payment methods, including digital wallets like Apple Pay. Source: Stripe

Stripe functions primarily as a merchant services provider that sells a leading point-of-sale (POS) system and has plugins for e-commerce tools that equip your business to receive payments from customers. As a payment processing company, Stripe can aid your business /4791-merchant-account.html”>merchant account, which Stripe supplies and are automatically transferred into your business checking account as soon as the next day. 

When you sign up with Stripe, you can choose from its standard offerings or a customized e-commerce package. You’ll have the option to purchase equipment or download plugins to process payments and use a personal dashboard to help track the payments you receive. You’ll also gain access to Stripe’s other services, including billing, invoicing and identity protection.

Here’s what we love most about Stripe:

• Transparent and affordable payment processing fees with no monthly costs or contracts
• Fully customizable checkout screens to match your business’s branding
• Over 100 accepted payment methods, including ACH transfers and digital wallets

Who do we recommend PayPal for?

PayPal’s uncomplicated platform makes it a great choice for startups and other small businesses that want an easy way to accept payments and create invoices. While it isn’t the cheapest payment processing solution, we found it to be valuable for businesses with a low sales volume that need simplicity above all else. PayPal is familiar to many customers and has a strong reputation, so using a PayPal checkout screen provides customers with confidence when purchasing from your business, especially if they aren’t familiar with your company. 

Your customers can pay with PayPal, Venmo, any major card or choose to pay in installments. Source: PayPal

Like Stripe, PayPal is a financial services company. However, PayPal functions primarily as a digital wallet for individuals or your small business. It excels at invoicing clients and receiving payments for work performed. It also offers merchant services like POS systems and credit card processing.

Signing up for PayPal is quick and easy. Once you’re registered, you can decide how best to use the platform to support your needs, order equipment or add tools and features. You can also order a POS system, acquire a business loan or use the platform to send individual invoices and receive payments. 

We think PayPal stands out because of these reasons:

• Uncomplicated checkout pages with multiple payment options, including pay later features
• Multiple hardware devices and accessories at affordable prices
• Business financing options with loans and PayPal business debit cards

Stripe vs. PayPal Comparison

Costs

Stripe

• Stripes fees are transparent and affordable. 
• Online transactions cost 2.9% plus 30 cents
• There’s a flat rate for international cards and currency conversion. 

If you choose Stripe for processing your brick-and-mortar or e-commerce payments, expect to pay credit card processing fees starting at 5 cents per transaction plus 2.7% of the transaction value. Meanwhile, fees are 30 cents per transaction plus 2.9% for e-commerce. Pricing is the same for all cards and digital wallets, including Visa, Mastercard, Maestro, American Express, Discover, JCB, Apple Pay and Google Pay. Integrations are also available for other global payment methods, such as Giropay, for a fee.

There are no contracts and no monthly plan fees. You’ll have to consider a few other fees, but in general, we like how simple and transparent Stripe is when it comes to pricing. Here is a breakdown of Stripe’s costs:

• Online transactions (Payments):         2.9% plus 30 cents
• In-person transactions (Terminal):     2.7% plus 5 cents 
• Hardware:                                           $59-$349 
• International cards:                             +1.5%
• Manually entered cards:                     +0.5%
• Currency conversion:                         +1%
• Tap to pay:                                          +10 cents
• Custom checkout domain:                  $10 per month
• Chargebacks:                                     $15
• Invoicing:                                             +0.4%

PayPal

• PayPal’s fees are complicated and depend on what functions you need.
• You will pay around 2.29%-3.49% plus 49 cents for online transactions. 
• International fees vary by country. 

PayPal transaction fees are based on the type of payment being processed and whether transactions are domestic or international. Rates vary from 2.29% ─ plus a fixed fee for quick response (QR) code transactions valued over $10 ─ to 3.49% with an additional fixed fee for standard PayPal checkout, invoicing, Venmo and other commercial transactions. 

In general, we found PayPal’s pricing structure to be complicated. Fees depend a lot on how you plan to accept payments and, for some functions, you’ll need to sign up for a monthly plan. We recommend speaking to PayPal to get a clear idea of what you’ll be paying. Here are some of the most relevant fees.

• Online transactions:                2.29%-3.49% plus 49 cents
• In-person transactions:           2.29%-2.99% plus 9 cents
• Hardware:                               $29-$499
• PayPal digital payments:        3.49% plus 49 cents
• International transactions:      +1.5%
• Currency conversion:             3%-4%
• Payments Advanceds:            $5 per month
• Payments Pro:                        $30 per month
• Virtual terminal:                       $30 per month
• Chargebacks:                         $20

Payments

Stripe

• Stripe accepts over 100 payment methods. 
• Customers can pay with digital wallets and ACH bank transfers.
• You can customize the checkout screen to match your branding.

Stripe lets you customize checkout pages to match your business’s branding. Source: Stripe

Stripe makes accepting payments online and in-person easy and secure, no matter how your customers prefer to pay. Stripe accepts over 100 payment methods. That includes all major credit cards and mobile wallets like Apple Pay, Google Pay and international digital wallets, such as WeChat Pay. You can send customers payment links and accept ACH payments for a fee.

We especially love that Stripe lets you create custom checkout pages to match your branding and they show up seamlessly on any device. For a small monthly fee, you can get your own checkout domain instead of linking to Stripe. 

Stripe also lets customers pay later through third-party apps, such as Klarna. And no matter how customers pay, Stripe provides robust reporting to help you leverage your payment data to make your business more profitable.​​

PayPal

• Customers can pay with PayPal, major credit cards, Venmo, Apple Pay and Google Pay.
• PayPal offers its own pay later function, with various payback plans. 
• Creating customized checkout pages requires subscribing to Payments Pro.

Similar to Stripe, PayPal lets you securely accept payments online and in person. Customers can pay with PayPal, Venmo, Apple Pay, Google Pay, cryptocurrency or with major credit and debit cards. We love that PayPal has its own Pay Later function, letting customers choose between four installments or monthly payments, but you still get your money upfront. 

When checking out online, customers will be sent to a PayPal checkout screen, which can boost consumer confidence, especially if you are a new business. You also have the option of creating a customized checkout page, but it requires an additional paid monthly subscription. If you don’t have a website, you can still send customers payment links or QR codes. PayPal also provides analytics to help you learn how to sell more efficiently. 

International Payments

Stripe

• Stripe works with international digital wallets like WeChat Pay.
• You can accept payments from 195 countries in over 135 currencies.
• Checkout screens automatically show local currency and payment options.

Stripe makes it easy and affordable to accept international payments, no matter what countries you do business in. The platform supports a ton of payment options, including digital wallets like Alipay and WeChat Pay. We were impressed that Stripe accepts over 135 currencies and can process payments from 195 different countries. You’d be hard-pressed to find a country and currency Stripe doesn’t accept. Plus, Stripe’s platform is available in over 30 languages.

We especially love that checkout pages will display the most appropriate currency and payment methods automatically based on where your shoppers connect from. Plus, with adaptive pricing, customers in over 50 countries can pay in their local currency and you receive the money in yours. Stripe even has support in 30 countries allowing you to set up local accounts. 

PayPal

• You can accept payments from over 200 countries in 120 currencies.
• PayPal is recognized globally which can boost consumer confidence.
• PayPal’s currency conversion fee is higher than Stripe’s. 

PayPal is a solid choice for small businesses that need to accept payments from around the world. PayPal can process payments from over 200 countries and supports over 120 currencies. Plus, PayPal’s global recognition can help boost consumer confidence in your company, leading to more sales.

While Stripe charges a set fee for all international transactions, PayPal charges different fee rates for different countries. The currency conversion fee is around 3%, which is higher than Stripe’s fee of 1%. 

Hardware

Stripe

• A basic card reader costs $59.
• Handheld POS devices go for $249 or $349.
• For 10 cents per transaction, you can enable Tap to Pay on your mobile device.

Stripe Terminal is a cloud-based system that allows businesses to accept payments in person as well as online. Stripe offers a few hardware devices for processing payments and through its application programming interface, lets you integrate Terminal into your custom POS. There’s a simple card reader for $59 and two smart readers with touchscreens for $249 or $349. You can also enable Tap to Pay on your iOS or Android mobile device for an additional 10 cents per transaction. 

PayPal

• PayPal only charges $29 for your first basic card reader.
• You can get handheld or desktop POS devices from $199 to $499.
• Tap to Pay doesn’t cost extra.

PayPal offers a number of hardware devices to accept in-person payments through PayPal Zettle or you can enable Tap to Pay on iOS or Android for no additional fee. The basic card reader is a bit more functional than Stripe’s with a numerical keypad and a simple digital display. Your first reader only costs $29 but additional readers go for $79. 

Zettle Terminal, which has a touchscreen display and connects with PayPal’s POS app, costs $199. For $239 you get Terminal with a built-in barcode scanner and for $269 it comes with a dock and printer. PayPal also offers store kits with displays ranging from $249 to $499 and you can also purchase individual accessories easily, such as cash drawers and printers, right from their website.

Additional Services

Stripe

• Stripe offers invoicing, recurring payments and subscriptions.
• There are tools to help with taxes.
• Stripe provides security tools to verify cards and prevent fraud. 

In addition to payment processing, Stripe offers these services:

• Business billing: Create recurring invoices and subscriptions ─ the fee is 0.5% on recurring charges.
• Invoicing: Pay 0.4% per paid invoice for Invoicing Starter and 0.5% for Invoicing Pro.
• Card issuing: Offer your clients rewards and promotions using custom virtual and physical cards.
• Tax calculation tools: Take advantage of the platform’s tax calculation tools ─ the cost is 0.5% per transaction.
• Identity protection services: Utilize identification tools to verify your customers’ identities ─ the fee is $1.50 per verification.
• Fraud protection: Protect against fraud and prevents chargebacks with Stripe’s Radar service.

PayPal

• PayPal’s painless invoicing function makes the platform shine.
• You can get financing for your business through PayPal.
• There are tools to help with taxes.

Creating invoices is a breeze in PayPal. Source: PayPal

In addition to payment processing, PayPal offers these services:

• Invoicing: Sending PayPal invoices is a breeze. There’s no fee for sending an invoice, but the company collects a fee from merchants for all invoices paid through the platform.
• Business loans: Business account customers can apply for a PayPal Business Loan to help cover expenses. Prospective borrowers use PayPal’s online tool to check their eligibility ─ without impacting their credit score. Eligibility is based on several factors, including your credit history and your company’s overall financial health. 
• Working capital: PayPal also offers flexible lines of credit if your business regularly needs access to small amounts of capital to cover expenses.
• Seller protection: Seller protection guards you against fraud and reduces the risk of chargebacks. 
• Tax calculation tools: These tools help you calculate sales taxes owed on transactions based on location and transaction type.
• Business debit card: You can use your PayPal balance to make purchases and withdraw cash. Plus, there’s 1% cash back on eligible purchases.

Ease of Use

Stripe

• Stripe makes checking out seamless for your customers.
• Creating customized checkout pages might require a developer.

Stripe lets you create a seamless user experience, integrating checkout screens with your company’s branding on your websites and mobile apps. However, ​​one big drawback of Stripe is that, with so many tools and features available, you may need some development experience to set it up. Even Stripe’s low-code tools require a few extra steps than using PayPal. Of course, even small businesses without dedicated information technology (IT) personnel can always hire a freelance developer to get the most out of Stripe’s customization options.

PayPal

• PayPal is incredibly easy to set up and use.
• Most businesses will have to use PayPal’s checkout screens.

PayPal can be used straight out of the box. You don’t need any development experience or outside resources to set it up. The downside is, with PayPal’s basic offering, you’ll have to use PayPal’s checkout screens. However, as many consumers are already familiar with PayPal, that means checking out should be easy. If you subscribe to Payments Pro, you will need developer help to get the most out of the platform.

Stripe vs. PayPal Recap

Choose Stripe if:

• You want a customizable checkout screen that accepts multiple payment forms.
• You need transparent, affordable rates to process domestic and international payments.
• You’re looking for advanced security features and fraud protection. 

Choose PayPal if:

• You want a checkout process that inspires consumer confidence and drives sales.
• You need a simple way to start accepting payments and issuing invoices. 
• You’re looking for affordable hardware options for accepting in-person payments.