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Stripe vs Paypal - two arms wresling

The rise of payment processors has been an exciting journey to watch unfold. For years, PayPal was king of the merchant castle, until the launch of Stripe in 2010. Square has proven itself to be a strong option for taking payment in a physical store and has since moved into eCommerce as well.

With the emergence of Apple Pay, Amazon Pay, and more, it’s now easier than ever for business owners to offer their customers an omni-channel payment experience.

For many merchants and analysts, however, it’s still a matter of choosing between Paypal and Stripe. So this is the topic we will be examining today, where we answer questions such as:

  • Is PayPal still a go-to for new businesses?
  • Is Stripe taking their fair share of the market?
  • What does it mean to be a business that runs two payment processors?
  • And ultimately, are two payment processors better than one?


PayPal vs Stripe — Transaction Fees

Before digging into what’s different between Paypal and Stripe, let’s look at what’s the same.

In the United States, both PayPal and Stripe charge the same basic fee: 2.9% + 30c per successful transaction. (sources: PayPal, Stripe) These fees vary by which country you’re trading in, but the two payment processors charge generally about the same.

Here is some more detailed information about transaction fees for each:

Stripe Transaction Fees

  • No charges for major cards inc American Express.
  • No fee for international cards.
  • No fee for failed transactions or refunds.
  • Accepts Bitcoin, Apple Pay, Android Pay.
  • Chargeback fee of $15.

Paypal Transaction Fees

  • International fee of 3.9% + fixed fee.
  • Chargeback fee of $20.
  • No fee for failed transactions or refunds.
  • For refunds, PayPal retains the fixed fee.
  • American Express fee of 3.5%.


Stripe and PayPal have different policies when it comes to micropayments.

PayPal currently offers 5% + 5c US per transaction under $10, whereas with Stripe, the basic rate applies.Comparing Micropayments between Stripe and PayPal

If your business does a high volume of low costs sales, assess whether using Stripe will be an asset to your business or end up costing you more per transaction.

PayPal vs Stripe — Access to Payments

Stripe allows its users in the US to access payments on a two-day rolling basis. Other International countries have a 7-day rolling transfer schedule. PayPal allows merchants to access funds within 3-4 days.

I recently spoke with Amanda Weedmark, CEO of Weedmark Designs. Amanda uses both Stripe and PayPal in her business and finds that the waiting period for PayPal is frustrating. “I like Stripe better because I have an automatic deposit into my bank account as opposed to it being held.”

However, Amanda adds that PayPal keeps business transactions separate, which is a benefit. As well, PayPal offers name recognition.

Running two payment processors and analyzing two sets of transactional data can be an overwhelming task, especially for micro or small business owners. This is where a data consultation app can help by presenting all the must-know information into one handy dashboard, ensuring that you’re in complete control of your venture at all times.

When it comes to transaction fees, running two payment processors can be beneficial. For example, if you’re able to let your customers understand that if they’re making an international payment or paying via American Express, then they should use Stripe, you could end up saving your business money in the long term.

PayPal vs Stripe — Setup

Getting up and running with PayPal is incredibly simple. All you’ll need to do is copy and paste a few lines of code onto your website. Once this is complete, you’ll see the instantly recognizable “Buy It Now” button which will allow you to start trading.

On the other hand, unless you have a web developer in-house, or have dev knowledge yourself, setting up Stripe can prove tricky. The payment processor is built for developers and the Average Joe might have a hard time navigating the lines of code that come with installing Stripe as your payment processor of choice.

If your business doesn’t have an in-house developer, it’s worth thinking about whether making an initial investment in installing Stripe will generate you more revenue in the long term. It could be that the cost upfront will be recouped by offering users the choice of two processors.

PayPal vs Stripe — UX

User experience is one of the most important considerations in choosing a payment processor. If your customers don’t feel comfortable checking out, your sales will suffer.

I also spoke with Daryl Hatton, Founder and CEO at Fundrazr. Hatton introduced Stripe into his business after becoming disappointed with the user experience that PayPal provides.Hatton highlighted the lack of ability to browse on mobile, the tricky navigation, and a lack of updates from the payment processor powerhouse as reasons for adding Stripe to his checkout.

Hatton’s actions beg the question of when will PayPal release a new interface or marketplace that works seamlessly with the current digital landscape? He adds that PayPal can feel outdated and that the new API is “taking forever to get done”.

Stripe, on the other hand, have API nailed down. Their interface allows for developers to build on a pre-existing framework and explore Stripe’s plethora of features. In contrast, however, Hatton noted that Stripe’s fraud protection “isn’t that great” and understands that PayPal is an instantly recognizable brand, and therefore, it has established consumer trust.

Hatton’s point is echoed by Supreme Socks CEO, Deanna D. Clause who is in the process of launching her business. Clause is considering using only Stripe in her venture, however, the lure of having PayPal as a “well known and trusted brand” is making her question whether to give her customers the choice of both PayPal and Stripe.

As mentioned, unless you pay for PayPal Advanced or Pro, your customers will be redirected to a PayPal payment page, and therefore exiting them from your website. With Stripe, you have the ability to create a checkout on site which provides a better user experience.

Stripe vs Paypal - Scale

PayPal vs Stripe: Which should your business choose?

The ultimate decision of choose PayPal or Stripe depends on the needs of your business. If you’re looking to trade internationally, think about whether offering Stripe alongside PayPal will help you save on transaction fees. If you’re looking to trade strictly in the US only, calculate whether investing in Stripe will be worth doing.

If you choose to run both PayPal and Stripe payment processors, this will give your business greater payment visibility, allow you to accept international payments with ease, present the opportunity to integrate a modern API with your website, and help establish your brand or business as one that’s up to date with the latest in payment technologies.

This article is based on US standards and was lasted updated on July 18, 2017.

Further reading: 10 High-Risk Online Fraud Countries That Stripe & PayPal Merchants Should Monitor