Dropshipping is a great way to make money online as an ecommerce merchant. This business model allows you to sell products online with no inventory.
Simply place orders for customers through your online shop and the manufacturer will ship the product to you.
Dropshipping is profitable because you can set your own prices on all products. Dropshipping requires you to choose a payment gateway that allows you to accept and process payments.
Dropshipping is not possible for all payment providers. However, the internet hosts dozens of payment providers. Stripe, PayPal are the two most popular payment processors that allow dropshipping.
Below is a list of the top payment gateways.
Comparison of Stripe and PayPal
Stripe is an online payment gateway that can be used for e-commerce websites and mobile apps. It is an Irish-American payment provider that has been in existence since 2009, with its headquarters in Dublin and San Francisco.
Stripe’s financial services were available in 44 countries at the time of writing. However, plans are underway to expand to other areas.
PayPal is an online payment platform that allows individuals and businesses to make payments. PayPal is an industry leader and has its headquarters in San Jose in California.
PayPal has grown rapidly since its inception to be a well-known name in the financial services industry. PayPal is the most popular online payment provider, with a presence in more than 203 countries.
Stripe and PayPal differ mainly in their availability, financial services available, recurring bills and chargeback fees.
Although Stripe is only available in 44 countries but PayPal is available in more than 200 countries. PayPal is able to accept payments from all regions worldwide, which means that it has a wider reach.
Stripe doesn’t allow money transfers from one Stripe account into another. It is not possible to send money to loved ones, friends, or to make donations to non-profit organisations.
PayPal allows money transfers between individual and business accounts.
Stripe and PayPal both accept online invoices as well as recurring billing. Stripe charges 0.5% for every $1 million in recurring revenue.
No matter how much income you make, PayPal doesn’t charge any fees for online billing.
Processing times for transactions can also vary. Payments are processed by Stripe for 7-14 days. However, this is only for the first payout. Subsequent payments take approximately 2 days. PayPal to PayPal transfers are instant, while bank account payouts take between 2 and 4 business days.
Buyers may request a refund if the product doesn’t meet their expectations. Stripe charges $15 for refunds and PayPal $20 for chargebacks.
What’s Stripe all about?
Stripe is an online payment platform that allows internet businesses to make payments. It makes it easy for customers to pay online by making payments.
Stripe will transfer money from the buyer’s account to the merchant’s account by allowing customers to use their credit cards for product purchases.
Stripe is a payment gateway that has been trusted by many online businesses, even though it has only 44 countries.
Stripe is used by big brands such as Shopify, Amazon, and Booking.com to process payments.
Stripe gives its customers (store owners) access to a few tools that can be used to personalize their payment options.
If you use them for dropshipping, Stripe can be integrated with your Woocommerce or Shopify stores.
What does PayPal mean?
PayPal is an online payment platform that allows individuals and businesses to transfer money over secure internet accounts. PayPal allows payments to be made between entities via online money transfers.
Payment providers allow individuals to pay for goods or services, send money or donate to charities or non-profit organisations without having to disclose their financial information.
PayPal is a well-known name in the financial industry and has offices in more than 200 countries.
Therefore, it is not surprising that most online shops and e-commerce websites accept payments from customers and business associates using PayPal.
Dropshipping: Which payment method works best?
Dropshipping is a service that Stripe does better than PayPal, according to my personal experience.
These are just a few reasons:
- You can accept many types of payments with Stripe, including credit cards, Ali Pay, Google Pay and Ali Pay.
- Stripe makes it much easier to get your money to your bank. This allows you to reinvest in your project. PayPal might hold your order until you give them shipping details. They will then verify that the customer has received it. Dropshipping can have longer delivery times, so this is a disadvantage to PayPal.
- Stripe is easily integrated with Shopify, WordPress and WooCommerce. To do the job, use Stripe’s plugin in conjunction with WooCommerce. Read Stripe Vs WooCommerce.
- Stripe offers a simple and intuitive mobile app that allows you to track your balance and check it.
- Stripe’s customer service is quicker and you can reach an agent through your email to resolve your issues quickly. PayPal support is slower and must be done through their website.
You are located in Canada? Check Stripe Vs. Paypal – Canada.
Dropshipping is a business that depends on the location of the client and the product you sell.
Also, consider things like transaction fees, availability, compatibility and expandability as well as data portability. These factors will determine which option is best for you business.
Dropshipping is just like any other online shop. Dropshippers don’t have their own inventory. Dropshippers act as intermediaries between buyers and manufacturers.
The right payment processor will help you build trust with your customers and make sure that transactions go smoothly.
You can also consider these other options:
Dropshipping can be supported by a variety of payment options. Dropshipping can work for one business but not for another.
Below is a list popular payment gateways that allow dropshipping.
- Google Checkout
- WePay
- Skrill
- Authorize.Net
- Apple Pay
- 2Checkout
After you have established a dropshipping shop, you will need to find a payment gateway that suits your business’s needs. These are some guidelines to help you get started.
- Dropshipping is supported by a payment gateway
- Choose a payment service that is trusted and well-respected in your country.
- Verify that the payment service in your country is available
- Be sure to check that transaction fees are fair
Stripe allows dropshipping
Yes. Dropshipping is supported by Stripe, one of the few major payment gateways. You must fulfill certain requirements to register your Dropshipping Business with Stripe.
Your dropshipping business must be able to operate in the USA or Canada. Dropshipping businesses must be located in any of the 44 countries that Stripe offers services.
Stripe doesn’t support businesses in Asia Pacific countries because Stripe considers dropshippers from Asia-Pacific as high-risk traders due to the many cases of fraud and chargebacks that have been reported in the past.
Dropshipping companies that sell illegal or shady products are not approved by Stripe. Stripe will not allow you to sell cellphones, sex toys or get-rich-quick ebooks, weapons, or drugs.
Dropshipping is PayPal possible?
Yes. Dropshipping is allowed by PayPal, but the payment processor has strict requirements. Dropshipping is banned by the payment processor every day if they do not meet these requirements.
To dropship with PayPal, you need to first open a business account at the payment provider.
All documentation required for the business account should be included, including the business name (name of the online store), registered business number and most recent credit card statements.
PayPal may suspend your account or ban dropshipping if they receive many complaints and dispute charges about your account.
How to use Stripe in dropshipping
It is easy to set up your dropshipping shop. Before you start your Stripe dropshipping store, here are some things to keep in mind:
- You must register your business outside of the Asia-Pacific region
- Your business must be operated outside of the Asia-Pacific region
- A bank account must be opened in the country where you are operating.
- A registered business address is required
- A valid phone number is essential for your business.
You must ensure that you don’t sell illegal products such as alcohol, weapons, counterfeit goods, or cellphones. These products can be used to launder money and attract fraud, while others pose high financial risk.
Here are the steps to use Stripe dropshipping.
- Shopify or WordPress? Set up your shop
- Create a Stripe account
- Stripe connects to your bank account
- Start selling
How do I use PayPal to dropship?
Dropshipping is a much more strict area of dropshipping that PayPal has previously highlighted. To dropship with PayPal, you must follow certain guidelines. Here are some guidelines to help you use PayPal for dropshipping.
- Register for a PayPal Business Account
- Prepare the appropriate documentation for your business
- Location and identity proof
- Send proof of shipment
- Tracking information
- Reliable manufacturers offer quality products for sale
- Invest in customer services
Final Verdict
Stripe is the best dropshipping payment gateway, provided your shop is not located in the Asia-Pacific region. PayPal, on the other hand, is too strict. They tend to ban or close user accounts without notice.
Stripe offers multiple payment options and supports over 135 currencies. Stripe’s transparent pricing is a huge advantage for dropshippers as well as customers. They also have an excellent support staff that works 24 hours a day to address customer queries and concerns.
