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Stripe and PayPal have been battling for years to be the best online payment processor. The two companies offer different features, but which one is better? We’ll break down what each has to offer you so that you can decide on your own.
The “stripe vs paypal vs square” is a question that many small businesses are asking. The answer to this question will help you decide which online payment processor is best for your business.
Are you looking for a high-quality, low-cost payment processing provider that can manage internet sales and foreign currencies? Stripe and PayPal are also viable options. While both are good options, we prefer Stripe for international sales and B2B companies, while PayPal is ideal for small businesses, solopreneurs, and as a backup payment option for any company.
- Stripe: For tech-savvy startups and developing ecommerce enterprises, as well as B2B and international sales, Stripe is the best option.
- PayPal Is The Best Option For small and informal businesses that require an extra payment option.
Quick comparison between Stripe and PayPal
If you’re searching for anything more specialized, Stripe and PayPal usually appear on our list of the best options.
When Should You Use Stripe?
Stripe
What We Enjoy
- Account with a free merchant
- Platform that is very adaptable and safe
- ACH processing at a low cost
- APIs that are both powerful and well-documented
What Isn’t There
- In-person processing options are limited.
- The installation procedure is complicated.
- It is missing a point-of-sale system and a reporting system.
- Chargeback cost is too expensive.
The Stripe Is Ideal For
- Creating a completely configurable and secure checkout: Stripe’s free account includes customisable security settings for checkout carts as well as guarantee of rigorous PCI compliance.
- Ecommerce or service firms with a high rate of growth: Using dependable APIs and interfaces, software developers may grow their company’ checkout process.
- Stripe handles international transactions in over 135 currencies and processes very tiny as well as big payments for local and international B2B enterprises. Recurring billing, invoicing, and domestic ACH transactions are all handled by it.
When Should You Use PayPal?
PayPal
What We Enjoy
- Online checkout integration that works seamlessly
- Consumers recognize and trust the platform.
- Deposits into your PayPal account are made instantly.
- Nonprofits get a discount on processing expenses.
What Isn’t There
- Unpredictable money freezing
- International payments are prohibitively expensive.
- There will be no offline payment processing.
- A few POS features and advantages
PayPal Is The Best Option For
- Adding online payments to your company quickly: With secure payment buttons, it’s quick and straightforward to add payment alternatives to your checkout page.
- Increasing online conversions: Because PayPal is one of the most trusted security seals in the payments industry, online buyers may be more ready to make a purchase if they know it is supported and secured by PayPal.
- Stripe features no monthly or cancellation costs, allowing you to utilize the payment processor and pay for it just when you need it.
When to Use a Substitute
If you operate a small company that also performs in-person sales, an all-in-one merchant services solution like Square Payments is a better choice. Square, like Stripe and PayPal, offers a variety of tools for processing online transactions, but it stands out because it comes with built-in fully integrated ecommerce, mobile, and in-store point-of-sale functionality–all for free.
Square has one of the most reasonable flat-rate transaction fees on the market today, and it ranks first on our list of the best merchant services for small companies and individuals.
Stripe is the most cost-effective option.
Stripe is the ultimate winner in terms of affordability. Overall, its payment processing costs are less costly and easy to comprehend. PayPal, on the other hand, offers a wide range of payment options for various scenarios, as well as varied costs for different nations.
Why Did We Pick Stripe?
Stripe’s price structure is simpler and less costly, including reductions for high-volume purchases and organizations, as well as reduced chargeback costs. It’s the more cost-effective option if you mainly handle internet sales or want a comprehensive POS system.
When Should You Use PayPal?
The PayPal Zettle mobile app may provide adequate POS functionality for free for companies with extremely simple POS requirements, such as farmers market vendors, food trucks, or storefronts with low stock. Like Stripe, you’ll need to go to a third party for a more complex POS system. In our PayPal Zettle review, we go over everything you need to know.
PayPal has great rates for organizations and should be considered. However, the major reason to use PayPal as a payment processor is if you want to provide your clients with a low-cost, secure option.
Tied is the best option for ecommerce payments.
For online payments, we declared a tie between Stripe and PayPal. While both companies specialize in online payment solutions, their finest features cater to distinct user groups.
When Should You Use Stripe?
Stripe is the superior choice if your online company routinely handles large-volume transactions for both local and international clients, such as B2B. Stripe’s robust fraud prevention features offer security for active companies that take online payments on a regular basis, despite the fact that it needs third-party connections for ecommerce and multichannel solutions. It also costs less for currency conversion than PayPal and has a simple flat pricing for processing online transactions.
Stripe’s hosted payment page improves foreign consumers’ checkout experience. (Image courtesy of Stripe)
When Should You Use PayPal?
PayPal is a preferable option for small enterprises, as well as those that sell on a regular basis, such as hobbyists or those who attend trade shows. It has additional payment choices than Stripe, including Venmo and bitcoin, as well as built-in Purchase-Now-Pay-Later and PayPal Credit features to encourage users to buy now and pay later (Stripe integrates with AfterPay to offer its own Buy-Now-Pay-Later payment method). PayPal allows users with just personal accounts to establish a seller profile, which may be used to sell things on social networking.
Better payment alternatives, such as Buy-Now-Pay-Later and PayPal Credit, are available to your consumers via PayPal, encouraging more purchases and income. (Image courtesy of PayPal)
When to Use a Substitute: Shopify
We propose Shopify instead if you want to expand your ecommerce company and increase income via multichannel sales. It’s an all-in-one ecommerce solution with payments and a free point-of-sale system. It’s also completely connected, so whether you make a transaction in person, on your phone, on social media, or on your website, your inventory is instantly synchronized. Our Shopify ecommerce and Shopify POS reviews can be found here.
PayPal is the best option for micropayments.
*To apply for a custom microtransaction rate, you must contact Stripe.
When it comes to taking micropayments, PayPal has a dynamic transaction fee approach. Stripe, on the other hand, does not publicly publish a microtransaction program; nevertheless, contacting Stripe Support may qualify you for a bespoke micropayment rate, which is commonly stated as 5% + 5 cents for transactions under $5.
Another disadvantage of Stripe is that if you choose a custom rate, even for microtransactions, you will be charged 5 cents for each attempted transaction as part of Stripe’s security program, Stripe Radar. For companies that use Stripe’s basic price, these costs are eliminated.
Why Do We Use PayPal?
PayPal is our preferred method for micropayments, owing to its more transparent micropayment costs. Businesses who register a PayPal business account are immediately enrolled in the company’s dynamic micropayment pricing plan. This implies that for each transaction, you get the better deal between the micropayment charge and the usual commercial transaction price.
PayPal now accepts micropayments in additional ways, allows peer-to-peer transactions, and makes it simpler to access your money.
Merchants that make frequent transactions worth $26.67 or less benefit from Dynamic Micropayment pricing. (Image courtesy of PayPal)
When Should You Use Stripe?
Microtransaction payment is not possible for all sorts of marketplaces, according to Stripe’s website, and it’s advisable to contact Stripe Support for additional information. If you have a busy company that handles micropayments on a regular basis, you’ll probably earn better rates with Stripe.
Stripe also allows you to combine numerous payments from a single individual into a single charge to save transaction costs, which is beneficial if you take a lot of micropayments from a small number of people.
Best for Invoicing & Recurring Billing: Stripe
For invoicing and recurring payments, Stripe stands out. When compared to PayPal, which also charges a gateway fee if you wish to accept recurring payments, its interchange plus price is cheaper. Stripe supports ACH debit and credit payments, but PayPal charges 3.49 percent + 49 cents per transaction for e-checks up to $300 per month.
Why Did We Pick Stripe?
Stripe is the obvious victor when it comes to invoicing and recurring charging. It provides a range of customization possibilities for one-time and recurring purchases, in addition to having a distinct advantage over PayPal due to its interchange plus pricing model. Stripe has a basic invoicing tool that you can set up from your dashboard, or you may utilize its API for more complex capabilities like automating invoice collecting, tracking, and reconciliation.
Stripe Billing, for subscription-based companies, allows you to design a number of subscription models, including per-seat or metered, flat cost, usage-based, and more. Coupons, free trials, prorations, add-ons, and other choices may be added to further personalize it. With Stripe invoicing, you can immediately produce a matching invoice as your consumer picks their desired plan.
No technical skills are necessary to create Stripe-hosted invoices in minutes. (Image courtesy of Stripe)
Create several subscription pricing models and automatically create invoices depending on your customers’ preferences. (Image courtesy of Stripe)
When Should You Use PayPal?
If you need to send out local invoices on occasion or prefer e-check payments over ACH, PayPal is the way to go. The PayPal for Business app allows you to produce professional invoices and schedule send-out requests for recurring transactions with just a few clicks from your mobile phone. It generates a link, which you can then email or text to your consumers.
The PayPal for Business app allows you to generate invoices. It also displays a list of your clients, as well as their transaction history and invoice status. (Image courtesy of PayPal)
The PayPal for Business app allows you to generate invoices. It also displays a list of your clients, as well as their transaction history and invoice status. (Image courtesy of PayPal)
Stripe is the most secure option.
Stripe and PayPal both provide strong online payment security, but Stripe offers additional customisation, including identity verification. Stripe’s dispute costs are refundable and reduced, but PayPal only levies them for transactions not completed via the buyer’s PayPal account.
Why Did We Pick Stripe?
Stripe has established a solid infrastructure for monitoring tools to secure your transactions and is certainly leagues ahead of the competition when it comes to online payment security. It includes powerful machine-learning fraud detection technologies as well as the ability to personalize your accepted payment risk level, ensuring that you don’t lose out on purchases that standard fraud monitoring systems could flag as questionable and prevent.
Stripe’s chargeback prevention capabilities rely heavily on real-time risk assessment. Its Dynamic 3D Secure solution is integrated into every checkout page and screens medium-risk consumers to safeguard your company from any legal issues.
Stripe’s dashboard maintains track of conflicts and makes it easy to monitor and handle them. (Image courtesy of Stripe)
When Should You Use PayPal?
If your clients are predominantly domestic and have PayPal accounts, PayPal is a good option. This guarantees that PayPal’s Seller Protection insurance covers your transactions. Furthermore, while Stripe offers more advanced payment security features, PayPal remains one of the most trusted security seals in the payments industry, making it an excellent choice for increasing sales.
Best for Ease of Use & Setup: PayPal
Stripe and PayPal are both free to use and can be set up in minutes. However, if you want to fully use Stripe’s payment and security capabilities, you will need some technical knowledge. PayPal’s customer assistance is considerably more extensive, with thousands of integrations for a variety of purposes.
Why Do We Use PayPal?
PayPal offers a more comprehensive business solution, including a business app, point-of-sale software, and hardware solutions for selling online and in person, that you can set up in minutes. This means you’ll require fewer third-party connections, and if you do, PayPal’s plug-and-play APIs make it simple to add PayPal checkout to any website or online marketplace.
While PayPal’s phone help is limited, it has an active seller community that gives practically every answer for utilizing PayPal, as well as text messaging and social media access to customer care. Payments, company management, operations, ecommerce, and marketplaces are among the connectors available.
When Should You Use Stripe?
If you want a more personalized payment solution for your company, Stripe is the preferable alternative. To reduce risk and give maximum seller protection, B2B enterprises that deal with significant quantities of international transactions would need a more advanced fraud detection system, which Stripe delivers.
It also includes access to its invoicing and recurring billing capabilities, as well as a variety of plug-and-play interfaces. It also works with the majority of POS and ecommerce applications.
Best for Cash Flow & Money Management: PayPal
While Stripe’s deposit speed is quicker and rapid payout costs less, we have to give PayPal the edge because of its wider selection of money management tools. PayPal also offers a variety of ways for customers to have immediate access to their cash on the site.
Why Do We Use PayPal?
We looked at PayPal’s capacity to give users with fast access to their money in their PayPal accounts. While PayPal takes three business days to transfer cash to your card or bank account, you may still make online payments using your PayPal balance. You may also earn rewards while using the cash in your PayPal account to make in-person transactions or withdraw money from any ATM that accepts Mastercard if you sign up for a PayPal Debit Card.
PayPal also provides business account users with two distinct financing options. Both enable you to customize your terms to meet your needs, and PayPal will compute the payback amount and fixed cost for you.
When Should You Use Stripe?
Stripe provides financing alternatives for active merchant accounts, similar to PayPal’s Working Capital. While the maximum loan amount is not listed on the website, the samples suggest a loanable sum of up to $25,000. Stripe Capital is best suited for firms that need short-term finance, since each loan is repayable for up to 18 months, according to Stripe.
When a merchant account with at least six months of processing history is pre-qualified for a loan, Stripe sends an email to the account owner. (Image courtesy of Stripe)
Stripe is the best option for integrations.
While PayPal is linked into almost every retail app you can imagine, Stripe takes the lead in terms of integrations thanks to its app marketplace and developer tools.
Why The Stripe Is Ideal For Integrations
Stripe has approximately 700 partner applications, all of which are simple to access on the company’s website. You may look for applications by name or use the tabs to narrow down your search by industry, need, or area. Popular tools like as Salesforce, Harvest, Shopify, QuickBooks, and Eventzilla are available.
You can’t seem to locate the app you’re looking for? Stripe’s API and SDK support is great, providing documentation, video lessons, and live chat with developers through Freenode IRC. Using the CLI on your terminal, you can build, test, and manage your integration. To create example code, see API request logs, transmit events to your application, and utilize Stripe from your editor, install the Visual Studio Code extension.
Stripe features a directory of over 700 partner applications that can be searched. (Image courtesy of Stripe)
When Should You Use PayPal?
PayPal is the leader in retail, with hundreds of shopping and mobile app connections ranging from eBay to Facebook. That is, however, from the consumer’s perspective. When searching from the PayPal website, businesses will have a difficult time locating integrations. Only a few third-party applications are featured in the app store, which is mostly focused on PayPal apps. The search box does not return any programs that we know function with PayPal, such as QuickBooks. It may be simpler to check your other program to see whether it offers a PayPal API.
PayPal offers native applications for adding payment buttons, processing subscriptions, invoicing, and simply receiving money. It also offers native applications for digital advertising, consumer communications, digital gift cards and discounts, and fundraising, to mention a few.
Developer programs for marketplaces and enterprise-level enterprises are also available. It includes documentation for existing APIs, a development and testing environment, and a support community. Only tickets are accepted for live tech assistance.
PayPal’s website offers a user-friendly development area. (Image courtesy of PayPal)
Conclusion
There is no obvious victor in the PayPal vs. Stripe dispute. Even if you use your own payment processing provider like Stripe, PayPal is a nice addition since it is a trustworthy service that improves your payment processing possibilities and has no extra costs if it isn’t utilized often.
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When it comes to online payment processors, there are a lot of options. PayPal is one of the most popular and widely used, but Stripe is growing in popularity. Which online payment processor should you use? Reference: stripe vs paypal 2022.
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