PayPal and Stripe are two of the most popular and well-known payment processing platforms. Both companies have similarities, but each platform is better suited for different business needs. While both companies specialize in online payment processing (over in-person transactions), PayPal is better suited for small or new businesses that are just getting started, while Stripe is a better fit for larger companies, as it provides more options for payment customization.
PayPal vs. Stripe: At a Glance
PayPal and Stripe both offer similar services for merchants. It’s easy to set up an account and start accepting payments with both. Neither company requires a contract and you can cancel anytime. The main difference between PayPal and Stripe is that PayPal is better suited for small businesses that are just getting started. It offers an easy setup and does not require advanced technical knowledge. Stripe is better suited for companies that want flexibility and the ability to customize practically every process of the online payment experience.
PayPal vs. Stripe: Credit Card Processing Comparison
| PayPal | Stripe | |
| Swipe/Chip Transaction Fees | From 2.29% plus fixed fee of $0.09 | From 2.9% plus $0.3 |
| Keyed Transactions | From 3.49% plus fixed fee of $0.09 | From 2.9% plus $0.30 |
| Customer Payment Options | Merchants can accept all major credit cards, Venmo, pay later options and cryptocurrencies | Merchants can accept all major credit cards (including international), pay later options, payments in over 135 different currencies and more |
| Chargeback Fees | $20 | $15 |
| Refund Fees | Customers receive the full cost of service, but the merchant does not receive the transaction fee in return | Stripe does not return original transaction fees |
| Software Integration | WooCommerce, Magento, Wix, BigCommerce, GoDaddy, and more | Drupal, PrestaShop, Magento, Shopware, WooCommerce, WordPress, and more |
| International Fees | Additional 1.50% for all commercial transactions plus fixed fee based on currency | Additional 1% for international cards, additional 1% if currency conversion is required |
| Invoicing | Yes | Yes |
Stripe’s fee for swipe/chip transactions starts at 2.9% plus $0.09 per transaction, while PayPal’s is 2.29% plus $0.49. The fee for keyed transactions for PayPal is higher, starting at 3.49% plus $0.09, while Stripe’s fee does not change. Both companies issue a chargeback fee—$20 for PayPal and $15 for Stripe. Additionally, PayPal charges an extra 1.50% for international transactions while Stripe charges an extra 1% for international cards, plus 1% if currency conversion is required. Both companies do not refund merchants the transaction fee when a customer issues a return. Both companies accept more payment options than other payment processing platforms on the market. PayPal is available in more countries than Stripe. PayPal offers options in 200+ countries, while Stripe offers service in 44+ countries.
The main difference between Stripe and PayPal is that the first is better suited for creating a customizable checkout flow. This means that you’ll be able to integrate your shopping cart to fit your store’s brand and aesthetics more easily. However, in order to customize these features you, or someone on your team, will need developer knowledge. Each customization process is outlined online in Stripe Docs.
PayPal, on the other hand, doesn’t offer the same customization options, but it’s easy to set up. This makes it best suited for smaller businesses, ones that are just getting started or don’t have the developer knowledge to customize their platforms.
PayPal vs. Stripe: Point-of-Sale (POS) Comparison
| PayPal | Stripe | |
| Customer Support | Live chat and knowledge base, no blog (24/7 phone support not specified) | Live chat, knowledge base, 24/7 phone support, blog |
| Tip Management | Not specified | No |
| Software Integrations | QuickBooks, SalesVu, WooCommerce, Big Commerce (and more) | Drupal, PrestaShop, Magento, Shopware, WooCommerce, WordPress |
| Cost for Card Readers | Card readers cost $29 and $79 for each additional device | $59 |
| Cost for Terminal | Starts at $249 | $249 (coming soon) |
| Transaction Fees | No monthly fees. Card present transactions cost 2.29% plus $0.09 per transaction. Manual card entry transactions cost 3.49% plus $0.09 per transaction. | No monthly fees. 2.7% plus $0.05 per successful card charge (1% for international cards, additional 1% if currency conversion is required). Manual card entry transactions cost 2.9% plus $0.30. |
| Built-In Payment Processing | Yes | Yes |
| Selection of Multiple Hardware | Yes (through Zettle, which it owns) | Yes |
PayPal and Stripe are two of the most well-known names in payment processing. If you’re a small business that’s just getting started and you’re looking for a way to process payment online, PayPal is a good choice. It’s easy to set up, does not have any start-up fees and does not require a contract. PayPal is one of the more recognized names in e-commerce, which ensures customers will feel safe purchasing your products or services.
If your business is more established and you want to customize your shopping cart checkout process so that it is integrated with your brand—and you have the developer skills—Stripe is a better choice.
From Forbes
