PayPal Vs Stripe: Make your choice (2023)9 min read

You’ve done it – you’ve set up an online store to sell your product or service!

But how are you going to receive the money for your valuable offer? What service should you choose to take payments online?

There are two main payment processors out there competing for your attention: PayPal and Stripe. 

They each provide similar services, but the magic is in the details, so we’ve done a thorough comparison for you to choose the processor best suited to your needs.

 

Paypal vs Stripe 2

 

The basics

PayPal and Stripe allow your clients to send money transfers to your business. They provide your customers with a safe way to use their credit or debit cards to pay for what you are selling

Founded in 1998, Paypal now has more than 400 million members, while more than 3 million active websites currently use Stripe, which was created in 2010.

Some of the main, basic features that both processors offer are the ability to process payments on a website, send invoices, and manage subscriptions. Beyond these, PayPal and Stripe start to diverge.

Both companies provide comparable services, including simple account setup and the ability to cancel at any time. However, PayPal is generally thought to be better for small businesses just getting started, as it provides a simple setup process that does not require advanced technical knowledge. Stripe, on the other hand, caters to businesses that want more flexibility and customization options for their online payment experience.

Paypal and Stripe at glance

Stripe and PayPal Standard (the most commonly used version of the service) have many things in common: they both provide customers with flat and predictable rates, their setup and use are easy and intuitive, and they support many different payment methods. 

As well as these basics, they share more particular qualities:

  • ​​Ability to process payments online and in-person;
  • Pre-designed and customizable checkout options;
  • Flat transaction fees;
  • Integration with e-commerce platforms;
  • Support for various payment methods;
  • Support for international transactions;
  • PCI compliant.

Still, there are pros and cons for each that you should be aware of.

Pros: 

Stripe: 

  • Advanced customization options to better adapt your payment system to your needs;
  • Lower chargeback fees allowing your customers more flexibility;
  • 24/7 support;
  • Developer support for more complex issues you may encounter;
  • Ability to keep and move your customer data, which can be very useful when combined with a CRM system, for example;
  • The lowest online processing rate;
  • Supports ACH (Automated Clearing House) for direct transfers between banks;
  • Can process payments in over 135 international currencies;
  • Offers support for a wide variety of mobile wallet payments and local payment methods used overseas.

PayPal Standard: 

  • Very well-known and trusted by customers, which may mean that your clients won’t need to create a PayPal account to pay you since they might already have one;
  • Funds available in your PayPal account immediately;
  • Free online invoicing;
  • Free card readers for storefronts;
  • The lowest in-person processing rate;
  • Provides a virtual terminal for in-person sales;
  • User-friendly interface for less technically savvy users;
  • More add-ons and options available for more adaptability;
  • Available in over 200 countries. 

Cons:

Stripe:

  • More difficult to set up.
  • Accessing your money through it takes more time.
  • Fees are not refundable.

PayPal Standard:

  • Redirects customers away from your website during checkout, which can be confusing; 
  • Charges a higher chargeback fee;
  • Support is not always reliable;
  • Doesn’t allow for recurring billing;
  • Can’t move all of your customer data to another payment processor.

Keep in mind that location as well as other circumstances might mean that some features will be unavailable to you or prices will be variable. Make sure to determine your specific needs before comparing the features and costs of these platforms so that you will know what to look for.

Let’s look at fees

PayPal (Standard) Stripe
Monthly Fees $0  $0
Transaction Fees 2.9% + 30¢ 2.9% + 30¢
Non profit rate 1.99% + $0.49 per transaction 2.2% + $0.30 per transaction
Invoice Costs 3.49% + $0.49 (Paid invoices are considered an online transactions) 0.4%-0.5% after the first free 25.
In-Person Transactions 2.29% + $0.09 per transaction (PayPal Zettle) 2.7% + $0.05 per transaction (Stripe Terminal)
Chargeback fee $20 $15
Micropayments (<$10) 5% + 5¢ Same flat rate
American Express 3.5% Same flat rate
International cards 1% Free
Fraud Protection Basic free
Advanced $10 / month 
Free
Refunds Fixed fee only returned  Fees not returned

 

This table only shows some of the fees one might incur when using PayPal or Stripe. Both offer extra features for additional costs, but also have basic pricing with no monthly fee. PayPal, however, also offers two other plans for either $5 or $30 per month, which offer more options at checkout.

APIs and SDKs

PayPal and Stripe provide a variety of APIs (Application Programming Interfaces) and SDKs (Software Development Kits), which allow businesses to integrate their payment processing capabilities with a variety of ecommerce platforms and other software.

The PayPal Checkout API enables businesses to integrate PayPal’s secure checkout experience into their website. Rather than being redirected to another website to complete their transaction, customers can pay directly from your own website in just a few clicks. The longer your visitors stay on your site, the more likely they are to browse it and explore your other offers! 

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PayPal’s other APIs can help you set up recurring payments as well as subscriptions, or facilitate your invoicing. There’s also an API for PayPal’s mobile app, Paypal Zettle, which makes it possible for businesses to accept  in-person payments.

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Stripe has its own plethora of API tools. The Stripe Payment Intents API lets businesses accept payments and subscriptions directly on their website, while with the Stripe Billing API, businesses can handle recurring payments and subscriptions. Stripe’s terminal for in-person payments Stripe Terminal also comes with an API. 

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In general, Stripe’s APIs are considered more developer-friendly than PayPal’s, making them best suited to businesses looking to customize their online payment experience very thoroughly. 

When it comes to integration, Stripe provides many options, including support for over 200 different ecommerce platforms. Its many APIs and SDKs allow for custom integrations with third-party software.

PayPal, on the other hand, is supported natively by many popular ecommerce platforms, including Shopify, WooCommerce, and Magento – businesses that use these platforms can easily integrate PayPal without doing any more work. Like Stripe, PayPal allows for custom integrations with other software.

Customer support

Any business can run into technical problems sometimes, so when deciding between PayPal and Stripe, make sure to consider the level of support that each platform provides!

Well-known for its developer-friendly approach, Stripe offers very clear and helpful documentation. It also provides 24/7 support from your account as well as chat support to assist your developer with troubleshooting any issues that may arise.

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PayPal, meanwhile, provides customer service via instant message or phone, as well as the option to seek assistance from the PayPal community. Users can resolve transaction or account issues from their own accounts and consult the help center and FAQs.

customer support

When deciding between PayPal and Stripe, businesses should consider the level of support they require as well as how simple the product is to use and set up.

Fraud detection and prevention services

Not everyone is an angel. Luckily, PayPal and Stripe both provide fraud detection and prevention services to help you protect your business against fraudulent transactions!

PayPal provides free basic fraud protection, with features like address verification and monitoring for suspicious activity. A fee will give you access to the more advanced services of PayPal Advanced Fraud Protection Services, including risk scoring, which assigns a risk score to transactions based on a variety of factors, as well as the ability to set custom fraud rules. PayPal also employs machine learning to detect and prevent fraudulent transactions, and has a team of fraud experts on hand to assist you if you are suspecting or facing fraudulent activity.

Stripe’s fraud detection and prevention services include Stripe Radar, which uses machine learning to detect and block fraudulent transactions. You also get to set your own fraud rules, and the 3D Secure feature verifies the identity of your customer during checkout, making sure actual money will reach you. For more advanced tools, you can use Radar for Fraud Teams, which also gives you access to a team of fraud experts.

Your customers’ security

Payment data is sensitive information and needs to be handled with care. Both Stripe and PayPal are designed to protect your customers’ financial details from fraud and breaches.

In addition to the safety features mentioned in the section above, Stripe has achieved PCI-DSS compliance, which is a set of security standards developed by major credit card companies to ensure that businesses that handle credit card information maintain a secure environment. It’s officially safe!

PayPal, on the other hand, uses encryption technology to protect sensitive information during transmission and storage, such as credit card numbers and personal information. And to prevent strangers from accessing another user’s account, it also employs two-factor authentication as an additional layer of security.

Availability

Both PayPal and Stripe are international platforms, available in many countries and currencies. Nevertheless, there are some differences in their coverage and specific features related to payments which you need to consider before picking one over the other!

PayPal has a global presence and is available in over 200 countries. It accepts over 25 currencies and also supports local payment methods in many countries, such as bank transfers and e-wallets. With its wide reach, PayPal is a good option for businesses operating in multiple countries or which have a global customer base.

Stripe, on the other hand, is primarily focused on businesses in the United States but is expanding into other regions such as Europe, Asia and Australia and catching up with PayPal’s omnipresence. Currently, it supports more than 135 currencies and is available in over 40 countries. It can be used with local payment methods, such as iDEAL in the Netherlands, Bancontact in Belgium, and Alipay in Asia.

 

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Conclusion

Both PayPal and Stripe offer great features to allow you to receive payments from customers. Your choice will depend on how your business functions and what you need.

If you’re looking to build your e-commerce platform on your own and without the help of a developer, PayPal may be right for you. Since it is widely known and available, the option of sending money from a PayPal account directly to another is a particularly interesting offer, making transactions all over the world very easy. If you need to process sales in person, the PayPal virtual terminal feature is also very practical. Finally, the many add-ons and integration options this processor offers make it very adaptable to whatever your specific needs may be.

If you want to further customize your checkout experience and are using a web developer, Stripe may be the best option for you. It’s also a less expensive option for online processing and its ability to work with ACH processing would be especially important if yours is a B2B (Business to Business) company. If you do many international sales and want to be able to accept different mobile wallet payments, such as Apple Pay and Microsoft Pay, Stripe would also suit you best.

Before making your decision, make sure you have a clear understanding of what you need from a payment processor and compare what the two most popular offers on the market would allow you to accomplish.

 

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