Your online store has the best products and prices. You also have some very successful marketing. You won’t be able ecommerce success unless you have a payment gateway.
Your ecommerce website’s payment gateway is where you receive and process payments from customers who visit you online. You can give your customers a trustworthy and reliable experience that will make them feel confident about purchasing from you. You could lose a sale forever if you choose the wrong payment gateway.
How do you choose the right tool for you?
There are many options, but we recommend that you start with the most well-known services. Stripe and PayPal are the most trusted and well-known payment processors in the ecommerce marketplace.
We’ve compiled this complete Stripe vs PayPal comparison to help you make an informed decision for your business.
Stripe vs. PayPal: Get to Know the Brands
You will need to have a basic understanding of both the brands before you can compare PayPal with Stripe. These companies are easy to understand.
Both PayPal and Stripe can help you manage your payments strategies. PayPal has become a household name, with endless options to send and receive money online and offline. Stripe, on the other hand is a well-known payment processor that is known more by merchants than it is customers.
PayPal and Stripe may not be the only payment options for companies today, but they are the most compelling.
PayPal offers multiple buying options for today’s customers. PayPal can be used to manage your entire payment gateway, or you can offer PayPal as an additional payment method for your website.
Stripe has been a market leader in software platforms for online businesses and merchants. Stripe processes billions of dollars worth of transactions each year for businesses around the world.
Services and Features
So we now know that Stripe and PayPal both offer payment processing solutions. What does this mean for the features you will get?
Let’s take a look at PayPal.
PayPal Features and Services
PayPal has been a payment processor since its inception. PayPal allows anyone to purchase using a debit card or an online account. Merchants have three options to get involved in PayPal’s payment process:
- Add to Your Checkout: The PayPal Checkout option is an additional option that companies can add on to their existing payment page if they accept credit card payments from another processor. This simply means that customers can pay their products via PayPal as well as their credit or card card.
- Payment Standard If your business doesn’t have a payment processing system, PayPal can be your primary processor. To enable PayPal for your primary shopping cart, you can create your payment buttons and paste the code into your website. You can customize the standard plan in many ways to meet your specific needs.
- Payments Pro –Payments Pro gives you access to all your PayPal features for a regular checkout. This includes extra features such as virtual terminals or a hosted checkout page. Hosted checkout allows customers to stay on your site while they buy something rather than redirecting to PayPal.
PayPal offers more than just payment processing. You can also access PayPal here to a mobile point-of-service system, online billing, donation buttons and mass payout systems. PayPal integrates well with many POS systems to allow for in-person sales.
Stripe Features and Services
So how does Stripe compare to PayPal?
First, stripe does not have the same approach to feature packages as PayPal. No matter where you are, Stripe will provide the same basic payment processing features regardless of where you are. Stripes payment processing tools include:
- Localized payment support, ACH and credit card
- In-app and online checkout pages built-in
- Pre-built embeddable checkout form
- Form building features using “Elements”.
- Invoicing and recurring billing
Stripe offers the Stripe Terminal (a software development kit) that allows you place Stripe’s payment processing capabilities into a point of sale application on the internet or in a mobile platform. This solution includes a pre-certified hardware offering as well as various other features that make integration easy.
- Stripe Radar is an anti-fraud management tool
- Stripe issues physical and virtual cards
- Stripe Connect for Market Management
- Stripe Sigma for SQL business intelligence
- Stripe Atlas incorporation by startups
Comparison of Stripe and PayPal: Transaction Fees / Costs
We’ll be back shortly to discuss the features that Stripe and PayPal offer. Before we continue with the comparison, you should check out the costs for each of these tools.
When you compare Stripe to PayPal, the first thing to remember is that both allow you to start selling without any recurring monthly fees. To get started, you don’t have to buy a subscription. These tools are great for startups and smaller businesses that just launched online.
It is very similar to PayPal and Stripe’s base fees.
PayPal and Stripe each charge a transaction fee of 2.9% plus $0.30c. This means you’ll be charged $3.20 per $100. This makes perfect sense, right?
Calculating How Much You’ll Pay
PayPal will charge
- Add PayPal buttons to your website at 2.9% plus a flat fee
- 2.9% plus a fixed charge to add PayPal to the checkout
- 5% plus 5 cents for a micropayment
- 2.9% plus 30 cents for online sales
- 2.75 % for chip/ pin/ contactless payments
- Payments from magstripe: 3.4% plus 30c
You’ll have to pay:
- Basic integrated purchases: 2.8% plus 30c
- International payments: +1%
- 0.8% on ACH transactions
- Instant payouts at 1%
- 2.9% plus 30c for local payment
Stripe offers custom pricing packages to businesses with specific payment processing requirements. You will pay a different price for Stripe’s “added features” depending on what you need. Billing and Radar are both charged at 0.04%. Terminal, on the other hand, is 2.7% plus 5c.
While Stripe may be less expensive than PayPal for international payments, you might end up spending more if your company wants to have additional features such as Sigma and Radar. A $500 one-time payment is required to activate the “Atlas” feature, which includes access to founder forums and a US bank account.
Dispute/Chargeback Fees
Stripe and PayPal have their own policies for handling disputes and chargebacks, in addition to the transaction fees. Chargebacks can have serious consequences for any business. This is why you need to be very careful when building an eCommerce site.
PayPal offers support for items such as unauthorized transactions, items not being received or complaints regarding items that differ from their product description. The amount is returned to the customer after a chargeback has been initiated. Additionally, the merchant may be charged a fee up to $20. If the case is in your favor, this fee will be refunded.
Stripe follows a similar approach with a $15 refundable fee. Stripe Radar offers merchants additional opportunities to reduce credit card fraud risks. Radar offers a variety of solutions, including machine learning and SCA logic to exempt, rich business insights, advanced chargeback protection, and machine learning. Radar is available for an additional fee.
Setup and Integration of Websites
We’ve covered the basics, and we’ve also discussed the costs. Now we can dive into the real capabilities of Stripe and PayPal.
When choosing a payment gateway, one of the most important things to think about is how easy it will be to integrate that solution into your existing website. PayPal is a popular payment processor because it makes selling online so simple for companies. Simply copy and paste the code from PayPal into your site. After you are done, your website will have a “Pay With PayPal” option.
PayPal can be integrated into your website with buttons such as “Add to Cart”, “Buy Now”, or you can set up automatic billing. PayPal integrates with most CRMs, so you can link your customer relationships to your payments.
PayPal is the company that makes it easy to use. Although there are tools available for developers in the PayPal portfolio you don’t have to be a programmer to take advantage of this feature. Integrating your system with third-party eCommerce platforms is possible. You can also create your own website by using attractive payment buttons. PayPal works best if you can copy and past HTML.
Although PayPal is simple to set up doesn’t mean Stripe isn’t as easy. It’s made to be as simple as PayPal and make setting up your online merchant account easy. Stripe supports more CMS options than PayPal and can be integrated into your website with the Stripe plugin.
Stripe can be integrated with any aspect of your website if you have an in-house developer. Let’s take a look at how it looks:
If simplicity is your priority, however, we recommend using Stripe’s plugins. The system can be integrated with most CMSs and websites. Stripe’s extensive developer options are appreciated by many. This payment platform is unique because it offers more customization and integration options than other platforms.
There is no doubt that PayPal or Stripe are better choices for developers. Although PayPal offers a lot of functionality, Stripe allows you to do so much more. Stripe was created for developers, though there are beginner options. PayPal was made for beginners with a few developer options.
It’s not difficult to set up payment on your website with Stripe or PayPal.
Global Selling Strategies
After you have set up your Stripe and PayPal systems, you will need to consider global availability as well as supported currencies. One of the greatest things about being an eCommerce merchant, is the freedom to sell to anyone in the world, provided your payment processor supports it.
PayPal is one of the most used payment processors around the globe. PayPal can be used to buy and sell in over 200 countries and regions. The PayPal Worldwide Offerings Page will allow you to locate any country that you may want to sell.
Stripe’s reach may be smaller than PayPal’s, but it is still quite accessible. The payment option is currently only available in 34 countries, but it’s growing.
A useful tip? If Stripe isn’t available in your country, there is a way around. To set up a US bank account, and begin accepting payments there, you can use the “Atlas”, another fancy feature.
Stripe is also able to offer worldwide access, but PayPal can’t match Stripe when it comes support for supported currencies. With Stripe , you can manage and take payments in more than 135 currency currencies. Many merchants will agree that supported currencies are more important than supported countries.
This makes PayPal the clear winner in this round.
Accepted payments and payment plans
We now know where Stripe and PayPal can be used to accept payments. Let’s look at the types of payments that you can accept.
PayPal allows you to instantly accept all major credit cards and debit cards on your eCommerce store. PayPal customers can store their PayPal credit online, and they can use it on any website without linking to a bank account.
PayPal comes with an additional useful feature, “PayPal credit”. Customers in the US, as well as other countries around the globe can access this virtual credit line. Credit is only available to those over 18 years old. However, this will allow your customers to buy their products through PayPal. Your chances of conversion are greater if you have more options to accept different types of payment.
When comparing Stripe’s payment options with Stripe, it’s worth taking into consideration the value of PayPal’s active cash accounts and credit accounts. Stripe is a leader in payment solutions, accepting all types of payments, including AliPay and Apple Pay, MasterCard, Visa Checkout and WeChat. Stripe will accept any payment method you can think up. Unfortunately, PayPal is not an option.
It’s hard to choose a winner solely based on accepted payment methods. To determine whether Stripe is the right choice for you, it’s important to understand your customer’s payment preferences. Visa and MasterCard account for 80.10% of the target markets, so Stripe’s MasterPass and Visa Checkout options are huge.
However, PayPal quickly became a popular way for consumers to store money online. Access to PayPal accounts or PayPal credit can make PayPal a more attractive option for your business.
A key point to remember is the possibility to use payment plans.
Customers who want to buy expensive items but don’t have the funds to pay in full can make payment plans. Vrai and Oro, a jewelry merchant, began offering payment plans to customers. They made a staggering $2 million annually.
Companies that plan to sell more expensive products or high-end inventory will find payment plans a strong tool. You need to ensure that payment plans are easy to set up with your payment gateway. PayPal provides a lot of help and documentation to assist you in setting up your checkout and the buttons that will allow you to set up your installment plans.
Stripe isn’t as easy. Stripe can only be used to set up payment plans using a subscription system. This is not as intuitive or seamless. To ensure that everything runs smoothly, you will likely need a developer.
PayPal is a clear leader in payment options, with its payment plans.
PayPal vs Stripe: The Checkout Experience
When comparing PayPal to Stripe, another important thing to think about is how you will provide your customers with a checkout experience. Customer experience is the key to any business’ success. You will be more likely to convert any customer into a repeat client if you provide a great checkout experience.
Your website’s checkout experience directly affects the usability and user experience. Stripe’s checkout process makes it extremely simple. The customer simply enters their credit card information and clicks submit. Hey, presto! They have completed their purchase. You control the flow and design of your checkout.
PayPal makes it a lot easier.
Imagine that you were looking to purchase a light bulb from Cololight.co.uk. You will see two buttons when you reach the checkout page: checkout and PayPal.
Click on Checkout to get the complete checkout experience. You can also add your credit card number or other details. Click on PayPal to proceed to the PayPal login page. Your customer may have to wait for the PayPal checkout page to load. Customers may find it confusing to be redirected from their website into another browser.
Customers may feel less secure giving you their payment details if they have left your original site.
You might convince your audience to stop buying from you by requiring them to click on PayPal to make a payment. You will need to ask them questions, enter their PayPal information, click on the preferred payment details and be redirected to your website. In today’s world of instant gratification, it’s just more tedious than it should be.
PayPal also asks users a few additional questions, such as:
- How long should I wait before clicking the refresh button?
- Was my payment successful?
- Where can I place my discount code?
These things may seem insignificant, but they can have a significant impact on your bottom line.
Customer Service
We now come to the most important, but often overlooked aspect of choosing which payment processing platform you need. You need to make sure that the company you are buying from is offering plenty of support when you compare Stripe and PayPal.
PayPal offers a variety of services, including a comprehensive help centre that has all the answers to frequently asked questions. This help center can assist you with everything, from receiving payments to issuing refunds. You also have the option of:
- A community forum – Where you can talk to experts in your area or find other community members who are having similar problems.
- Live chat – Live chat is an increasing part of the PayPal customer service experience. It’s a great feature to be able to chat with a representative at any time.
- Email Support: If your question is not answered immediately, you can send an email the PayPal team. Only if your PayPal account is still accessible, you will be able send an email.
- Developer center – Although PayPal does not focus as much on developers as Stripe, there is still some information if you are a person who enjoys playing with code.
PayPal has its own social media accounts that are specifically created for customer service. You can ask questions via Twitter from @AskPayPal, which is open between 9 and 5 CST. This won’t be of much help if you don’t have any particular problems until later in your day.
Stripe recently updated its customer support options to make it more attractive and complete than ever. New solutions include free 24/7 live support for merchants, which is quite significant for most people. Merchants face the problem of not being able to reach the people they need, regardless of what customer service solution they use.
Stripe’s 24/7 chat and phone support make it a lot more attractive than PayPal for consistent service.
Stripe offers a lot for customers. It’s just like PayPal. There’s also a knowledgebase available that will walk you through basic account details. The knowledgebase doesn’t have the same depth as PayPal’s until you move on to the developer section.
Stripe’s developer documentation is the best place to find out more about certain features, even if your not a developer. You can also use these features:
- Chat-based support (Freenode based). The IRC chat section allows you to communicate with your Stripe developers, and ask them technical questions. You can find experts who will assist you in building the perfect website.
- Live chat support: Stripe’s live chat support system doesn’t work the same way as the freenode service. Logging into your account and visiting the Contact Us page will allow you to contact a support representative about any of your pressing questions, regardless if they are developer-focused.
- Phone support: If you require assistance from a human being, you can ask Stripe to contact you when an agent is available. This is an enormous advantage over PayPal’s phone service option, where you are stuck on hold for hours.
- Email support: If you have a less urgent question, you can always send an email to Stripe. This is often the easiest way to get a response from Stripe as quickly and easily as possible.
PayPal does not have a dedicated account for customer support via social media. However, you can still contact them via @StripeStatus or @StripeStatus Twitter. You can also visit the Stripe Facebook page.
There are many customer service options, including PayPal and Stripe. Both companies struggle to provide the support that their customers need. PayPal is not able to provide a consistent high-quality experience. While you might be able to reach someone who can help, in many cases, you will end up on hold for hours talking to people who are unable to help.
Stripe, however, has struggled to give you access to real people when you need them. Although you were able to contact the company by phone and email in the past, the customer service experience changed when live-chat was introduced and phone calls were made.
Verdict
When it comes to making the final decision, how can you tell whether Stripe is the right option or PayPal? Each company has its pros and cons, as you can see from our extensive comparison. PayPal, for example, is great for microtransactions. It’s also great for beginners who don’t want to deal in code. PayPal also offers excellent payment plans that allow you to spread out a customer’s purchase.
Stripe, on the other hand is one of the most popular options for custom eCommerce stores. If you already have a WordPress account, it is easy to set-up Stripe. You can also do more with Stripe than you can with PayPal if your team has developer skills. Stripe also offers more payment options, and many great integrations.
Both services have issues with customer service, so you might find one that isn’t right for you. If you have the opportunity to try both of these tools, we recommend that you do so and see which one works best before you decide whether you want to roll it out. You should also remember that there are many other payment options available, such as Square, which is one of the most popular POS solutions on the market.
