Choosing the right online payment processor is crucial for anyone business selling in the digital marketplace. Stripe and PayPal are two of the dominant, trusted platforms with distinct strengths and some drawbacks.
If you are operating any kind of e-commerce business; It's essential to verify that the processor you select is compatible with your sales platform, customizable to your brand and infrastructure needs, and offers highly competitive and transparent fees.
Sneaky or complex fees can lead to confusion and unexpected costs, which can impact your business a great deal, especially as your success builds and your sales volume grows.
Let's take a look at Stripe vs PayPal as merchant solutions and see which one wins out for your business.
Overview: Stripe vs PayPal
Stripe is favored by developers and businesses seeking rich customization potential, offering extensive integration options and tools to create unique checkout experiences that align perfectly with their brand. It's often favored by those who are a little more tech-savvy, although it offers no-code checkout solutions.
PayPal, on the other hand, is famed for its user-friendly interface, simple setup, and widespread consumer trust and recognition. It's more likely to appeal to customers who are less tech-savvy and respond better to a brand that makes them feel secure.
In order to evaluate the two payment processors in detail to establish which best fits your business, we'll look at the following categories in detail:
- Transaction fees
- Customization options
- Ease of integration
- Security features
- Customer service
Company background and reputation
Before we dive into the nitty gritty, let's take a quick look at the headlines on each platform:
Stripe
- Founded: 2010
- Milestones: Significant funding rounds and global expansion.
- Target Market: Focuses on online businesses and startups
- Reputation: Renowned for robust APIs, innovation, and customization potential. It has established partnerships with brands like Amazon and Shopify.
PayPal
- Founded: 1998
- Milestones: Acquired by eBay in 2002; independent since 2015.
- Target market: Individuals and businesses of all sizes; well set up to provide full in-person payment services.
- Reputation: PayPal is a 'household name' that enjoys the trust that comes with that. It has established partnerships with Visa, MasterCard, and eBay.
Costs and fees: Stripe vs. PayPal
Other than for in-person transactions and maybe invoicing fee costs, Stripe wins out over PayPal in terms of both the cold hard numbers and the simplicity and transparency of its pricing structure.
Navigating PayPal's fees pages and tables to research this article, I can categorically state that Stripe's fees are way more transparent and easy to understand. They have a lot more wrapped up in their flat fees so there will be way less chance of unwanted surprises that incur significant costs.
Additionally, Stripe is way more friendly to people wanting to sell to an international audience, supporting more currencies and with lower conversion fees.
| Feature | Stripe | PayPal |
|---|---|---|
| Monthly fee | None | None |
| Standard transaction fee (US) | 2.9% + 30¢ per transaction | 2.99% - 3.49% plus $0.49 per transaction depending on payment method |
| In person transaction fee (US) | 2.7% + $0.05 | 2.29% + $0.09 |
| International payments fee | 1.5% | 1.5% |
| Supported currencies | 135+ | 29 |
| Currency conversion fee | 1% | 4% |
| Chargeback fee | $15 per chargeback | $20 per chargeback |
| Volume discounts | Available for high-volume businesses | Available through Merchant Rate Program |
| Recurring billing fee | Included in the basic fee | $10/month |
| Refund fee | No fee; original processing fee not refunded | No fee; original processing fee not refunded |
| Same day funding fees | 1.5% | 1.5% |
| Link to fees page | https://stripe.com/pricing | https://www.paypal.com/us/business/paypal-business-fees |
| Invoice payment fees | 0.4% on transaction total $2.00 cap per invoice | Standard transaction fee only |
| ACH Direct Debit | 0.8% ($5.00 cap) | 0.8% (capped at $5.00 per transaction) |
Further resources: Understand Stripe Processing Fees: Guide & fee calculator
Customization: Stripe vs. PayPal
Stripe offers businesses greater control over their checkout experience compared to other payment processors.
While PayPal's familiar branding can reassure some customers, Stripe empowers businesses to create a unique and customized checkout process that aligns with their brand identity.
The ability to fully customize checkout experiences for your customers comes at an extra cost with PayPal.
Stripe
- Extensive customization options: Stripe excels in its customization capabilities and is essentially a fully customizable checkout gateway out of the box. Individuals and businesses can create an online checkout experience that aligns with their brand identity, choosing from no-code solutions or more advanced developer options.
- Developer-friendly: Stripe is designed with developers in mind and offers detailed documentation and a powerful API that facilitates an array of customizations.
PayPal
- Simple customizations: PayPal also provides basic checkout customization options, however to create on site checkout options that benefit from the full range of customization options, users must pay for Payflow Pro ($25/month) or Payments Pro ($30/month).
- Brand reliability: While the overall feature set may not be as extensive as Stripe’s, PayPal offers sufficient customization to meet the needs of small businesses seeking a quick straightforward setup and wanting to take advantage of PayPal's trusted name.
Integration: Stripe vs. PayPal
Both Stripe and PayPal boast extensive integration capabilities, allowing them to connect with a wide range of e-commerce platforms and business tools.
Stripe excels in this area, offering a vast marketplace with hundreds of ready-made integrations, encompassing everything from accounting software to project management platforms.
While PayPal also offers a marketplace of integrations, a key differentiator is its compatibility with other payment processors. Businesses can seamlessly integrate PayPal as an additional payment option alongside other gateways like Stripe, providing customers with greater flexibility and choice in how they choose to pay.
| Aspect | Stripe | PayPal |
|---|---|---|
| Integration capabilities | Seamless integration; compatible with platforms like Checkout Page, WooCommerce, and Shopify. | Recognized for easy integration with platforms like Shopify, BigCommerce, and Squarespace. |
| Learning curve | Moderate learning curve; initial setup can be complex but leads to a scalable system. | Generally shorter learning curve due to a user-friendly setup; numerous built-in plugins available. |
| APIs and developer tools | Extensive APIs for customization; well-documented to support complex payment flows. | Offers various APIs; less flexible than Stripe but supports payment processing, invoicing, and subscriptions. |
| Time-to-implement | Varies by functionality; many platforms offer plugins to simplify integration. | Quick implementation with built-in plugins, allowing for faster setup. |
| Technical support resources | Comprehensive documentation and guides; strong community support and dedicated customer service, developer Discord server | Extensive resources, including documentation and forums; dedicated support for integration challenges. |
Security: Stripe vs. PayPal
Both Stripe and PayPal prioritize safeguarding customer data and mitigating fraud, offering peace of mind to both merchants and buyers.
Both are PCI-DSS Level 1 compliant, which means they meet the highest standard of security requirements for processing credit card data. While both offer essential security features and dispute resolution tools, Stripe is notable for a more granular approach to fraud prevention. It provides businesses with greater control over fraud rules, allowing for customized risk management based on their specific needs.
PayPal also offers customizable fraud management settings, allowing businesses to control factors like monitored countries, transaction limits, and address verification, making it a suitable option for businesses with lower sales volumes.
| Security feature | Stripe | PayPal |
|---|---|---|
| Data encryption & compliance | Utilizes AES-256 encryption; PCI-DSS compliant for maximum security. | Employs SSL technology for secure data transmission; PCI-DSS compliant. |
| Fraud prevention tools | Uses machine learning-based Radar for detecting fraud; customizable fraud prevention settings. | Offers real-time monitoring and transaction analysis; supported by a dedicated team of fraud prevention specialists. |
| Chargebacks and disputes | Comprehensive dispute management tools; facilitates submission of evidence for resolving chargebacks. | Accessible resolution center for disputes; provides Seller Protection for eligible transactions. |
| Certifications & accolades | Recognized with various industry certifications for security and compliance. | Holds multiple security certifications, affirming its industry-leading security measures. |
Customer support: Stripe vs. PayPal
Good customer support can make all the difference in the world, especially when faced with a critical issue impacting your ability to sell or frustrating your customers. Talking to a bot or waiting days for a response to an email can be infuriating and have a big impact on business.
Both PayPal and Stripe have pretty robust support offerings, although Stripe's 24/7 chat is appealing to many who don't like the time window restrictions of PayPal's support.
Let's take a look at the overall picture:
| Aspect | Stripe | PayPal |
|---|---|---|
| Availability & accessibility | Provides 24/7 chat, phone and email support. | Message Center: 7 AM to 10 PM CST on weekdays and 8 AM to 8 PM CST on weekends. Phone support: daily from 8 AM to 8 PM CST. Live Chat with AI. |
| Quality of support | Generally positive user reviews regarding responsiveness and helpfulness; knowledgeable representatives. | Mixed user reviews; some praise knowledgeable staff, while others report longer wait times and frustrations with automated responses. |
| Additional support resources | Comprehensive documentation and guides available; community forums for peer support; learning center with tutorials and webinars. Stripe developer Discord Server. | Extensive Help Center with FAQs and guides; community forums for user discussions; rich learning resources including articles and videos. |
| Response time & effectiveness | Average response time is generally quick, especially for chat support; high effectiveness in resolving technical issues. | Response times can vary; phone support may have longer wait times during peak hours; effectiveness in resolving issues can differ. |
AI integration in payment processing
As awareness of artificial intelligence (AI) grows, it's interesting to look at how AI can enhance payment processing. Both Stripe and PayPal are leaning on machine-learning technology to bolster payment security and harness reporting analytics to generate insights from extensive data.
Currently, neither platform is utilizing AI in a user-facing capacity to a degree that would impact your platform choice:
Stripe:
- Offers Radar fraud management service, allowing users to set monitoring rules using natural language processing. Use of Radar screening is $0.05 per transaction.
PayPal:
- PayPal doesn't yet have any significant user-facing features that leverage AI, but according to a press release from November 2024, new innovations are on the way.
So, with AI developing at breakneck speed, the message is to watch this space!
Why Checkout Page uses Stripe as its payment partner
At Checkout Page we specialize in no-code hosted checkout pages, and we use Stripe as our payment processor to support the needs of our customers, many of whom are digital creators and event organizers with a broad audience reach.
These businesses often require rich customization potential to ensure their checkout pages blend seamlessly with their landing pages. They also handle significant transaction volumes and want simple, cost-effective transactions for their global audience—areas in which Stripe excels.
We build on Stripe's capabilities in order to offer our users features you don't get with Stripe alone, such as the ability to sell digital downloads, offer one-click upsells, sell event tickets, and more.
For us, Stripe is a winner for its:
✅ Customization and integration: Stripe offers exceptional customization capabilities with flexible APIs and customizable checkout options. This allows our customers to create a seamless, branded checkout experience, which is crucial for digital creators and event organizers seeking to enhance customer engagement and streamline purchase processes.
✅ Global reach and recurring payments: With the ability to handle transactions in over 135 currencies, Stripe makes it simple to sell digital products and tickets worldwide. Its tools for managing recurring payments and subscriptions are ideal for those offering memberships, subscriptions, and payment plans.
✅ Cost savings and transparent pricing: Stripe provides a straightforward pricing model with low transaction fees, which helps businesses predict costs without surprises. Unlike PayPal, Stripe avoids complex fee structures and charges for recurring payments or currency conversions, leading to significant cost savings over time. This financial clarity and efficiency are especially valuable for our customers, who must manage budgets effectively as they scale.
Conclusion
Overall, Stripe offers the powerful solutions needed to boost sales and growth and meet the intricate demands of a global customer base while clearly being the most cost-effective solution compared to PayPal.
In the areas that matter most to our customers, Stripe is the obvious winner, saving them money with low fees and clear pricing, not penalizing them for overseas transactions, and making customization a key feature—not an added extra.
Yes, PayPal is a more recognizable name, but as competition grows in the market, Stripe is fast on its heels as a trusted payment processing partner.
If you think Stripe is the solution for your e-commerce venture, why not give Checkout Page a try and see how we build on its capabilities with features like events pages, the ability to sell digital downloads, offer payment plans, and more?
Our 7-day free trial requires no credit card, and there is no lengthy setup process. Just connect your Stripe account and experiment with checkouts and sales funnels to your heart's content. No coding or technical skills are required!
