So, you’ve decided to expand into the realm of selling your products/services online and want to know what the best way to accept payments is?
Here at CardSwitcher we understand the importance of choosing the right provider - after all, we are a comparison site!
Two of the biggest names in the online payment industry are Stripe and PayPal. Although they each target different businesses, they are still often paralleled and considered as competitors.
In this article, we have collated all of the information you could possibly need to make your decision between Stripe and Paypal.
What do Stripe and PayPal do?
PayPal and Stripe are both third party payment processors, which means they allow merchants to accept payment from their customers.
Here’s how each company describes their product.
Whether you're looking for a payment gateway or want to add PayPal as an additional and more secure payment method on your website, we can help you get set up.
Stripe is the best software platform for running an internet business. We handle billions of dollars every year for forward-thinking businesses around the world.
Since PayPal has a bunch of different services, it's a little unclear as to what we're talking about. For simplicity’s sake, in this article, we’re dealing exclusively with PayPal’s Payments Pro package.
PayPal does offer a cheaper service called Payments Standard but it’s pretty underpowered and it’d be unfair to put it up against super techy Stripe.
Below we have consolidated the key information about the online payment service Stripe:
|Best for which types of business?||eCommerce stores, online marketplaces, or subscription businesses. Great for businesses with in-house developers as there are lots of custom development options.|
|Transaction fees||1.4% + £0.20 (European cards), 2.9% + £0.20 (non-European cards)|
|Customer service rating||3.2/5 Stars (via Trustpilot)|
|Card reader cost||From £49|
And here are the key points of interest for PayPal:
|Best for which types of business?||All variations of eCommerce retailers, no matter the industry or size.|
|Transaction fees||1.2% + fixed fee (domestic transactions), 1.29% + fixed fee (international transactions)|
|Customer service rating|
|Card reader cost||From £29|
*Inclusive of reviews for non-business customers - there is no one TrustPilot account specifically for business.
Below we have outlined all of the expected fees associated with incorporating Stripe or Paypal as an online payment platform into your business, so you can easily compare.
|Transaction Fee||1.4% + £0.20||1.2% + fixed fee|
|Setup/Monthly Fee||No charge.||No charge.|
|Micropayments||Undisclosed.||Domestic: 5% + fixed fee per transaction|
International: 6% +fixed fee per transaction
|Recurring Billing||0.5% (recurring billing)|
0.8% (recurring + one time invoice payments)
|Chargeback Fee||0.4% per transaction + £15||0.59% per transaction|
|Refunds||Free. No fees returned.||Free. No fees returned.|
|Customer Support Methods||24/7 via telephone.|
Premium packages with additional support available.
|Ease of Use||Straightforward, additional tools best used by developers.||Straightforward, equipped with sophisticated tools. Website building capabilities.|
|Ease of Setup||Straightforward, completed in a matter of minutes.||Straightforward, completed in a matter of minutes.|
|Countries Available||135 countries.||200 countries. 25 currencies.|
|Access to Funds (time)||3 working days.||21 days by default. Can be 1 day after delivery if you use Royal Mail shipping label or tracking information|
|Data Portability||Supported. PCI DSS protected.||Easily transferred, but cannot transfer subscription or transaction information.|
|Online Invoicing||0.4% per transaction||2.9% + £0.30 per transaction|
|Card Readers||From £49||From £29|
Whether you are accepting payments online or in person, there will be a long list of both expected and unexpected fees to be aware of. At CardSwitcher we want you to be fully clued up on the payment process, which is why we have explained the hidden card fees that you should be aware of.
Comparison of Fees
Both Stripe and PayPal aim to provide their customers with fair, transparent pricing. Below is a comparison of the fees you can expect from both providers to help make your decision easier, especially if finances are your primary concern.
|Domestic transaction fees||1.4% + £0.20||1.2% + fixed fee (PayPal user)|
2.9% + fixed fee (other commercial transactions)
|International transaction fees||2.9% + £0.20||1.29% per transaction|
|Micropayments||Fee undisclosed.||Domestic: 5% + fixed fee per transaction|
International: 6% + fixed fee per transaction
|Recurring Billing||0.5% (recurring billing)|
0.8% (recurring + one time invoice payments)
|Chargeback fee||0.4% per transaction||0.59% per transaction|
|Refunds||No Fee (transaction fee not refunded)||No Fee (transaction fee not refunded)|
Premium support packages available, prices dependent on business needs.
Ease of Set-Up/Use
Both Stripe and PayPal are user friendly. They are straightforward for retailers to set up and use. For customers, they are both intuitive.
If you choose Stripe:
- It’s really simple for any retailer to set up, with accounts up and running in a matter of minutes.
- They have a wide range of integratable options such as online invoices and payment links.
- They also have a variety of features that are difficult to get full use of unless you are/have a developer on board.
If you choose PayPal:
- The setup is easy to use no matter your web development ability.
- If you are expanding into the realm of eCommerce but don’t yet have a website, PayPal can help you with this too!
- Customers are redirected to PayPal’s site and required to sign in before completing the payment process, interrupting the customer journey.
No matter your choice, both Stripe and PayPal meet the strict industry standards of being Payment Card Industry (PCI) Compliant, meaning all of your and your customers’ data is stored securely and not shared with third parties.
Customer Support/Tech Support
Stripe has a wide range of support methods available 24/7, including:
- FAQ style documents listed on their site to try and help you before you contact one of their tech support team.
- Email response within 24 hours.
- Live chat service.
- Request a phone call (no inbound support phone number is available).
- Technical support chat specifically for developers.
Customer satisfaction is average, based on Trustpilot reviews, with compliments to their quick response time.
PayPal has a similarly extensive range of support methods, including:
- A host of useful documents on their site to try to eliminate the middleman.
- Live Chat.
- Resolution Centre.
- Community of members to pose questions to.
- Direct phone line.
Based on Trustpilot reviews, customer satisfaction is relatively low, however we must account for reviews being from both merchants and customers.
In terms of support internationally, Stripe:
- Supports the processing of payments from over 135 countries, allowing you to charge customers in their local currency but receive funds in yours.
- International card payments are charged at 2.9% + £0.20.
- If a currency conversion is required then a further 2% will be charged.
When it comes to PayPal:
- It is available in 200 countries and supports 25 currencies, for both retailers and customers.
- Retailers will be charged 1.29% per transaction.
- Customers can expect to be charged the exchange rate for their local currency.
If you also take payments in person, you will be interested in each company’s card reader offering.
Stripe’s POS is fully customisable to your requirements and you are provided with a user friendly dashboard. The terminal is available from £49 and each transaction is 1.4% + £0.10, but if you want to know more read our comprehensive Stripe review.
PayPal also provides the option to purchase a physical card reader, called the Zettle Reader. Quickly accepting payments, it is secure and compatible with the ZettleGo app, giving you access to your dashboard from anywhere. The terminal is priced from £29 and each transaction is 1.75% - to find out more about this card reader, explore our Zettle review.
Both card readers have earned a spot in our coveted Best Card Readers article.
With Stripe they appreciate that customers (you) may change payment providers, and they believe that the transfer of your sensitive data should be done securely. That’s why they’ll work hand-in-hand with your new provider to ensure the data is exported securely, but only if the new provider is also a PCI DSS Level 1 compliant processor.
PayPal also believes that your data belongs to you, therefore they will also work with you to transfer and export your data. They easily export customer credit card information, but cannot export subscription or transaction information.
Stripe’s invoicing system is great. It:
- Offers a fully customisable platform that allows you to configure your invoice to your brand specifications, free of charge.
- The invoice will include a payment link that takes the customer to a Stripe hosted (and protected) domain, which is optimised for use on mobiles, tablets and desktops.
- Stripe also simplifies operations by allowing you to automate tasks and review invoices on the dashboard.
PayPal’s online invoicing system is similarly very capable. It:
- Allows you to send a professional invoice in minutes, and receive payments via card or PayPal.
- You can also set up recurring invoices and create follow up payment reminders, the handy app also allows you to send invoices on the go.
- There are no set up fees, but PayPal charges 2.9% + £0.30 per transaction.
Access To Funds Time
As a retailer there is no shame in one of the most important deciding factors being how quickly you can access your funds.
Stripe deposits funds into your account within 3 working days (UK) for low risk businesses, and 14 days for high risk businesses. They offer an instant access option to certain accounts, giving you access to your funds within 30 minutes of payment.
PayPal say they hold your funds for 21 days by default, but you can speed it up to as little as 1 day if you use official tracking information and use a Royal Mail shipping label.
All businesses have unique payment processing demands, unique payment method breakdowns, unique business models and unique in-house skill sets. With so much variation between businesses, it’s impossible for us to say, with any sort of confidence, that Stripe is better than PayPal or PayPal is better than Stripe.
That opinion is down to you. With the information above, you should be able to judge which is the better fit for your business. However, if you want to explore more options than just the three we’ve outlined here, we have explored the 10 best online payment processors so you can have your pick of the bunch.
At CardSwitcher, we want to keep your card processing fees as low as possible, so we help you compare the best providers on the market. Start comparing today to save up to 40%!