Stripe vs. PayPal

Stripe vs. PayPal Highlights

Who is Stripe For?

Stripe is our choice for e-commerce businesses that want flexible online payment processing and the ability to accept credit cards and a wide range of other payment methods. Stripe stands out for its customizable checkout tools, support for more than 100 payment methods and extensive integration options.

Stripe functions primarily as a payment processor for online businesses and offers tools for accepting payments through websites, mobile apps, invoices, subscriptions and in-person transactions. As a payment aggregator, Stripe creates a merchant account for your business under its master account and deposits funds directly into your linked bank account.

After signing up, businesses can start accepting payments with Payment Links, Stripe Checkout or one of Stripe’s many integrations. Companies that need more control can use Stripe’s APIs and developer tools to build customized payment experiences. Stripe also offers additional products for billing, tax collection, fraud prevention, reporting and more.

Here’s what we love most about Stripe:

• Transparent flat-rate pricing with no monthly fees or long-term contracts
• Flexible checkout options ranging from no-code payment links to fully customized payment experiences
• Support for more than 100 payment methods, including cards, ACH transfers, digital wallets and buy now, pay later services

Who is 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. 

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

Pricing and Plans

Stripe

If you choose Stripe for your payment processing needs, online payments start at 2.9% plus 30 cents per transaction, while in-person payments through Stripe Terminal cost 2.7% plus 5 cents. Pricing is the same for all cards and digital wallets, including Visa, Mastercard, American Express, Discover, JCB, Apple Pay and Google Pay. Stripe also supports more than 100 payment methods, including bank payments and buy now, pay later options.

There are no contracts and no monthly 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’s a breakdown of Stripe’s costs:

• Online transactions (Payments): 2.9% plus 30 cents
• In-person transactions (Terminal): 2.7% plus 5 cents
• ACH Direct Debit: 0.8%, capped at $5
• Hardware: $59-$299
• International cards: +1.5%
• Manually entered cards: +0.5%
• Currency conversion: +1%
• Tap to Pay: +10 cents per authorization
• Custom checkout domain: $10 per month
• Disputes: $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 makes it easy to accept payments online, in person and through invoices or subscriptions. The platform supports more than 100 payment methods, including major credit and debit cards, mobile wallets, bank payments and buy now, pay later options. Businesses can also offer local payment methods in markets around the world through a single payment platform.

One of Stripe’s biggest strengths is the flexibility of its checkout experience. Businesses can get started quickly with Stripe Checkout or Payment Links and later customize the payment flow with Stripe’s developer tools and APIs. We also like that companies can use a custom checkout domain for a more branded customer experience.

Stripe supports buy now, pay later payment methods, including Klarna and Afterpay, alongside cards, bank payments and digital wallets. The platform also includes reporting and analytics tools that help businesses track sales, payment trends and customer activity.

PayPal

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 is a strong option for businesses that sell to customers around the world. The platform supports payments in more than 135 currencies and offers a wide range of local payment methods, including digital wallets and bank-based options that are popular in different markets. Businesses can manage domestic and international payments through the same Stripe account.

We especially like that Stripe can tailor the checkout experience based on where a customer is located. Businesses can present prices in local currencies and offer relevant payment methods, which makes the checkout process feel more familiar to international customers. Stripe also offers tools for businesses operating across multiple countries, including local acquiring and multicurrency settlement in supported markets.

PayPal

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

Stripe Terminal lets businesses accept in-person payments while keeping those transactions connected to the rest of their Stripe payment data. Stripe offers several certified payment devices and provides APIs that allow businesses to integrate Terminal into custom POS systems.

There’s a basic card reader for $59, while the Stripe Reader S700 and Stripe Reader S710 smart readers cost $299. Businesses can also enable Tap to Pay on compatible iOS and Android devices for an additional 10 cents per authorization.

PayPal

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

In addition to payment processing, Stripe offers a broad range of business tools:

• Billing: Manage subscriptions, recurring payments and usage-based billing.
• Invoicing: Create and send invoices, accept online payments and automate payment reminders.
• Tax: Calculate, collect and report sales tax, VAT and GST in supported jurisdictions.
• Radar: Screen transactions for potential fraud using Stripe’s built-in fraud prevention tools.
• Sigma: Create custom reports and analyze payment data using SQL-based queries.
• Connect: Manage payments and payouts for marketplaces and multi-vendor platforms.
• Issuing: Create and manage virtual or physical payment cards.
• Identity: Verify customer identities and help meet compliance requirements.

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 is easy to get started with. Businesses can begin accepting payments quickly using Payment Links, Stripe Checkout and other prebuilt tools, while the Dashboard makes it easy to manage payments, customers, invoices and subscriptions from one place.

The platform becomes more complex as you move beyond Stripe’s out-of-the-box tools. Businesses that want highly customized checkout experiences, advanced automations or API-based integrations may need technical expertise or developer support. That said, Stripe’s documentation is among the best we’ve seen, making it easier to implement and manage advanced features than many competing payment platforms.

PayPal

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 Summary

Choose Stripe if:

• You want a customizable checkout experience that accepts a wide range of payment methods.
• You need transparent, affordable rates to process domestic and international payments.
• You want flexible payment tools that can scale as your business grows.

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.