PayPal vs. Stripe – Which is Best for Your eCommerce Business? (2024)

Inside this article

PayPal and Stripe are, without a doubt, the two biggest names in the payment processing world, but which is best?

That’s what we’re going to find out today as we compare PayPal vs. Stripe.

In this battle of the payment processors, we will look at exactly how these two options differ and compare everything from transaction fees to customer support.

By the end of this article, you can make a more well-informed choice about which to use for your business.

🔥 PayPal vs Stripe at a glance
💰 Fees & Pricing
🙂 Brand recognition
🚀 Checkout experience
✔️ Ease of use
🔧 In-person POS
💳 Accepted payments
🤝 Customer support
🤔 What do users think?
🙁 Can’t I just use both?
🏆 PayPal vs Stripe – The Final Verdict

Let’s get started.

🔥 PayPal vs. Stripe at a glance

If you don’t have time to read this whole article, we thought we’d kick things off with a comparison table that quickly summarizes the key differences between PayPal and Stripe.

	PayPal	Stripe
Transaction fee	2.9% + fixed fee (pricing for consumers. The fixed fee depends on the currency)	2.9% + $0.30
Micropayments fee (under $10)	5% + fixed fee (depending on the currency)	2.9% + $0.30
Chargebacks	$20	$15
PCI Compliance	✔	✔
Reports	✔	✔
Customer Support	Email, Help Center, Phone & Forum	Email, Help Center, 24/7 Phone & Chat
Brand recognition/trust	5/5	3/5
Checkout experience	2/5	5/5
Ease of use/setup	5/5	4/5
Developer tools/flexibility	2/5	5/5
In-Person Card Readers	Free & paid	Paid
Monthly fees	✘	✘
Set-up fee	✘	✘

💰 Fees & Pricing

Alright, let’s talk about pricing.

Stripe and PayPal both use a transaction-fee-based pricing model. Neither will charge you a monthly subscription fee (unless you opt for the PayPal Payments Pro service); they just take their cut from each sale you process through their gateway.

Their fees per transaction are almost identical. While Stripe charges 2.9% + $0.30, PayPal’s equivalent pricing for consumers is 2.90% + fixed fee (depending on the currency).

Things get a little more complicated for certain transactions, like recurring billing/subscription transactions, nonprofits, ACH transactions, and in-person POS sales, but we won’t get into that here.

However, we will talk about two specific types of transactions that incur different fees: international and micropayments.

# International transactions

When it comes to International card payments, Stripe is the clear winner.

PayPal charges an increased transaction fee of 5% for international personal transactions (where the funds originate outside the US). In contrast, Stripe only charges an additional 1.5% on top of its regular flat fee (2.9% + $0.30 total) to accept International cards if no currency conversion is necessary.

# Micropayments

Stripe might win for International transactions, but PayPal takes the lead when it comes to micropayments.

Micropayments are low-value transactions under $10. Stripe offers the same flat rate for micropayments as regular payments (2.9% +$0.30), whereas PayPal has a custom micropayment fee of 4.99% + fixed fee (for domestic payments).

These rates can be deceiving. On the surface, it seems like Stripe might be the more economical choice if you look at the percentage-based rate alone. Here are two examples of micropayment transactions to illustrate.

$1 transaction fees:

PayPal

Payment: 100¢ ($1)
Transaction fee: 4.99% (0.049)
Fixed fee for USD: 0.09
Total: 100¢ – (0.049 + 0.09) = 99.861¢

Stripe

Payment: 100¢ ($1)
Transaction fee: 2.90% (0.029) + 30¢
Total: 100¢ – 30.029 = 69.971¢

$5 transaction fees:

PayPal

Payment: 500¢ ($5)
Transaction fee: 4.99% (0.049)
Fixed fee for USD: 0.09
Total: 500¢ – (0.049 + 0.09) = 500 – 0.139 = 499.861¢

Stripe

Payment: 500¢ ($5)
Transaction fee: 2.90% (0.029) + 30¢
Total: 500¢ – 30.029 = 469.971¢

As you can see, you’ll pay less per transaction with PayPal for low-value sales. If you run an eCommerce store exclusively selling low-value items like digital downloads, those savings will add up quickly.

# Chargeback fee

A chargeback fee is a fee you incur when a customer reports a transaction to their bank and asks for the money to be refunded. It’s supposed to help protect customers from fraudulent sales, but it can sometimes be abused by customers who just want a refund.

Stripe’s chargeback fee is $15
PayPal’s chargeback fee is $20

The difference here is straightforward enough. Stripe wins.

🙂 Brand recognition

PayPal is probably more recognizable than Stripe when it comes to brand recognition. Almost all your customers should know what PayPal is and be familiar with the name.

Familiarity can be helpful if you run a small eCommerce store as it can offset your weak credibility, improve trust, and make customers less hesitant to enter their card details. For some customers, it’s PayPal or nothing. If you don’t have an option to pay through PayPal, and they don’t trust your brand, they might just go elsewhere.

PayPal wins the popularity contest amongst merchants, too. According to Datanyze, they currently dominate the payment processing market, with around 44.95% of the market share, compared to Stripe’s 18.53%.

🚀 Checkout experience

Stripe is the better choice when we look at the checkout experience alone.

Why? Well, it comes down to the fact that PayPal payments aren’t handled 100% on your site, whereas Stripe payments are.

Stripe’s checkout process looks like this:

Your customer clicks the Checkout button.
Goes to the checkout view.
Enter their card details and hit Pay.
Done.

It’s as simple as that.

PayPal, on the other hand, is more complex. Here’s what the PayPal checkout process looks like:

Your customer goes to the checkout on your website.
Clicks the PayPal button.
Logs in to PayPal.
Chooses the payment method and clicks the Complete Purchase button.
Returns back to your website.

As you can see, there are more steps with PayPal. It might not seem like a big deal, but those extra steps can seriously impact your conversion rates. Every additional click your customer has to make increases the chance of them giving up and abandoning their cart.

It’s worth noting that PayPal and Stripe provide various ways of adding payment buttons to your page. With these additional ways, you can streamline the process further.

✔️ Ease of use

PayPal wins regarding ease of use (and setup).

It’s designed for anyone to quickly set up and use on their website with minimal hassle. Minimal coding is required, and you don’t need to be an expert to integrate it with your eCommerce platform.

Simple integrations are available for Stripe, too, and you can quickly integrate it directly with your eCommerce platform using plugins if you want to. However, Stripe is also a powerful, flexible, feature-rich platform that you can get more creative with if you have coding experience. It features robust developer tools for every stack and a powerful API.

If you want to build a customized online storefront or utilize more complex integrations, Stripe is the better choice. If you just want something simple and easy to set up with minimal headaches, PayPal might be the better option.

🔧 In-person POS

Both Stripe and PayPal have in-person POS features you can use to unify your online and offline payment processors. Both companies can provide you with card readers for your brick-and-mortar stores. PayPal offers a free and paid version, whereas Stripe only offers paid card readers.

PayPal has integrations into many popular POS systems, and the Stripe Terminal SDK allows you to build your in-person checkout.

💳 Accepted payments

Stripe accepts far more different payment methods than PayPal. They accept all major debit and credit cards and popular wallets like Apple Pay, Google Pay, Visa Checkout, MasterPass, WeChat, Alipay, and Amex Express Checkout.

However, while PayPal might not accept as many wallets as Stripe, it still accepts every major credit card, eChecks, and any other payment method that PayPal users can store.

And, of course, PayPal also lets customers pay with their PayPal Balance account. It’d be a mistake to overlook this as an important payment method, as not everyone can access a debit or credit card. Some customers use PayPal balances to pay for everything.

Plus, PayPal accepts something that Stripe doesn’t: PayPal Credit. It is a big deal as PayPal credit is now hugely popular in the US and has reached payment volumes of over $50B since 2008.

Overall, the winner here is too close to call. It’s a tie.

🤝 Customer support

Customer support is another essential factor to consider when weighing up your options. When you’re running an online business, every technical issue can hurt your revenue, so you need a payment gateway that can provide immediate support when you need it.

Fortunately, both Stripe and PayPal offer plenty of customer support options. However, Stripe would take the medal if we had to choose between them. They offer 24/7 phone support, which is a huge plus, as well as live chat and email support.

PayPal also offers phone support, albeit not 24/7, various other support channels, and a very extensive knowledge forum where merchants can find answers to most questions. While this easy access to community support is nice, it’s not quite as good as 24/7 access to official support from internal staff, which is why Stripe wins.

🤔 What do users think?

Are you still trying to decide which payment processor is best for you? One way to decide is to check reviews and look at other users’ comments.

You can find customer reviews on Reddit, G2, TrustPilot, or GetApp. But you’ll soon realize there are mixed opinions and ratings regarding both platforms.

For instance, at the time of writing this article, we could find ratings for PayPal and Stripe as follows:

Trustpilot:

Stripe: Trustscore 2.7 (out of 5), 13036 reviews
PayPal: Trustscore 1.3 (out of 5), 27917 reviews

GetApp:

Stripe: 4.7 stars (out of 5), 3000 reviews
PayPal: 4.7 stars (out of 5), 24900 reviews

Capterra:

Stripe: 4.7 stars (out of 5), 3010 reviews
PayPal: 4.7 stars (out of 5), 24991 reviews

As you can see, it’s a bit mixed, although most reviews are positive.

When you look at the reviews, pay close attention to when it was given. For instance, if someone complained about a particular Stripe feature five years ago, it might not be relevant anymore.

The best way to look at reviews is to evaluate them on multiple websites and see a pattern. If you see the same theme popping up on many sites, then there is possibly a factor to pay attention to.

For instance, for PayPal, many review sites don’t give positive reviews on their customer support. Then again, it’s the same thing with Stripe. And to mix things up, you can also find positive reviews on that topic.

People sometimes leave a bad review without fully understanding how each service operates. Or sometimes, they might have had a bad day, which affects the number of stars given.

🙁 Can’t I just use both?

You might be wondering if you must choose between PayPal and Stripe. They have pros and cons, so isn’t it better to use both?

Well, not necessarily.

The problem with having two payment options is that it comes with twice the vendors and twice the potential for things to go wrong. Plus, you’ll likely be cutting your sales processed through each gateway in half, which can mean you might lose out on volume-based discounts from PayPal or Stripe that you would have otherwise been entitled to.

Things can get messy and complicated on the back end quickly. This can lead to headaches that no small business owner needs.

However, it might still be worth it, depending on your business. Giving your customers multiple payment options can’t be bad from the customer’s perspective. If you’re prepared to deal with the headache that comes with it, it could be worth it.

🏆 PayPal vs. Stripe – The Final Verdict

Alright, so what’s the final verdict in the PayPal vs. Stripe debate?

Ultimately, it depends on your business. Stripe is better suited for large operations and techier business owners, whereas PayPal is designed for smaller, simpler integrations.

You’ll also need to consider who your customers are, how they like to pay, and how much they spend on your site to determine what’s best. If you plan on processing a ton of microtransactions, go with PayPal. In most other cases, Stripe is probably the superior choice.

And, of course, there’s always the option of using both. But if neither feels like a good fit for your business, check out our list of the top 8 best PayPal alternatives for eCommerce stores to explore other options.

Good luck!