PayPal vs Stripe: Are Two Payment Processors Better Than One?

The rise of payment processors has been an exciting journey to watch unfold. For years PayPal was king of the merchant castle, until the launch of Stripe in 2010. Square held it’s own for taking payment in a physical store, with Apple Pay launching in 2014 to help bolster the idea that micro and small business owners can take payments anywhere.

It’s the seemingly never-ending battle of PayPal vs Stripe that has caught the eye of many merchants and analysts. Is the payment processor stalwart PayPal still a go-to for new businesses? Is Stripe taking their fair share of the market? What does it mean to be a business that runs two payment processors? And ultimately, are two payment processors better than one?

PayPal vs Stripe – Transaction Fees

A business owner wants to collect the most amount of revenue from a sale, and that’s why transaction fees are top of a CEOs list when it comes to choosing between PayPal vs Stripe.

In the US, PayPal and Stripe both charge the same basic fee: 2.9% + 30c per successful transaction. These fees vary by which country you’re trading in but hover around similar amounts.

Stripe Transaction Fees

No charges for major cards inc American Express.

No fee for international cards.

No fee for failed transactions or refunds.

Accepts Bitcoin, Apple Pay, Android Pay.

Chargeback fee of $15

Paypal Transaction Fees

International fee of 3.9% + fixed fee

Chargeback fee of $20

Refunds, PayPal retains the fixed fee

American Express fee of 3.5%

Unlike Stripe who have a ‘one size fits all’ solution to payments, PayPal also have Advanced and Pro accounts — which cost $5 and $30 per month, respectively. These upgrades allow you install a checkout on your own website, instead of having your customer directed to a PayPal checkout. A benefit of paying for an Advanced or Pro account is that this will keep customers on your website for longer.


Stripe and PayPal have different policies when it comes to micropayments. PayPal currently offer 0.5% + 5c US per transaction under $10, whereas with Stripe the basic rate applies.

Micropayments with PayPal:

5% of $5 = 0.25 + 5c = 30c

Micropayments with Stripe:

2.9% of $5 = 0.14 + 30c = 44c

If your business does a high volume of low costs sales, assess whether using Stripe will be an asset to your business or end up costing you more per transaction.

Stripe allows its users in the US to access payments on a two day rolling basis. Other International countries have a seven-day rolling transfer schedule. PayPal allow merchants to access funds within 3-4 days. Amanda Weedmark, CEO of Weedmark Designs, uses both Stripe and PayPal in her business and finds that the waiting period for PayPal is frustrating, however understands that PayPal keeps business transactions separate, which is a benefit.

Running two payment processors and analyzing two sets of transactional data can be an overwhelming task, especially for micro or small business owners. This is where a data consultation app can help by presenting all the must-know information into one handy dashboard, ensuring that you’re in complete control of your venture at all times.

When it comes to transaction fees, running two payment processors can be beneficial. For example if you’re able to let your customers understand that if they’re making an international payment or paying via American Express, then they should use Stripe, you could end up saving your business money in the long term.

PayPal vs Stripe – Setup

Getting up and running with PayPal is incredibly simple. All you’ll need to do is copy and paste a few lines of code onto your website. Once this is complete, you’ll see the instantly recognizable “Buy It Now” button which will allow you to start trading.

On the other hand, unless you have a web developer in-house, or have dev knowledge yourself, setting up Stripe can prove tricky. The payment processor is built for developers and the Average Joe might have a hard time navigating the lines of code that come with installing Stripe as your payment processor of choice.

If your business doesn’t have an in-house developer, it’s worth thinking about whether making an initial investment in installing Stripe will generate you more revenue in the long term. It could be that the cost upfront will be recouped by offering users the choice of two processors.

PayPal vs Stripe – UX

User experience is one of the most important considerations with choosing a payment processor. If your customers don’t feel comfortable checking out, your sales will suffer.

Daryl Hatton, Founder and CEO at Fundrazr, introduced Stripe into his business after becoming disappointed with the user experience that PayPal provides. Daryl highlights the lack of ability to browse on mobile, tricky navigation, and a lack of updates from the payment processor powerhouse as reasons for adding Stripe to his checkout.

Daryl’s actions begs the question of when will PayPal release a new interface or marketplace that works seamlessly with the current digital landscape? Mr Hatton adds that PayPal can feel outdated and that the new API is “taking forever to get done”.

Stripe on the other hand have API nailed down. Their interface allows for developers to build on a pre-existing framework and explore Stripe’s plethora of features. In contrast however, Daryl noted that Stripe’s fraud protection “isn’t that great” and understands that PayPal is an instantly recognizable brand, therefore has established consumer trust.

Daryl’s point is echoed by Supreme Socks CEO Deanna D. Clause who is in the process of launching her business. Deanna is considering using only Stripe in her venture however the lure of having PayPal as a “well known and trusted brand” is making her question whether to give her customers the choice of both PayPal and Stripe.

As mentioned, unless you pay for PayPal Advanced or Pro, your customers will be redirected to a PayPal payment page, and therefore exiting them from your website. With Stripe, you have the ability to create a checkout onsite which provides a better user experience.

PayPal vs Stripe: Which should your business choose?

The ultimate decision of choose PayPal or Stripe depends on the needs of your business. If you’re looking to trade internationally, think about whether offering Stripe alongside PayPal will help you save on transaction fees. If you’re looking to trade strictly in the US only, calculate whether investing in Stripe will be worth doing.

If you choose to run both PayPal and Stripe payment processors, this will give your business greater payment visibility, allow you to accept international payments with ease, present the opportunity to integrate a modern API with your website, and help establish your brand or business as one that’s up to date with the latest in payment technologies.

Originally published on the now defunct Control blog.