Key Differences Between Stripe and PayPal

The importance of using payment processing platforms for all types of businesses cannot be underestimated. Choosing the right service can boost user experience, ensure the security of transactions, and help businesses reach new markets.  

In the world of payment processing services, both PayPal and Stripe are two of the most prominent players. When it is time to choose a financial service provider, numerous business owners wonder which is better: Stripe or PayPal? It all depends on the scope of your business and its needs. One of the key differences between the two platforms is that PayPal is less loaded with customization features and thus may be more suitable for those getting started. 

Because of the widespread use of both services, it’s only natural that many individuals don’t know whether to choose Stripe or PayPal. In this article, we focus on the main differences between the two payment platforms, their fees, and their features.

Stripe vs. PayPal: Features and Functionality

It is impossible to talk about the difference between Stripe and PayPal without discussing their main features. Here are the main functions of these payment services so you can decide whether you are more interested in PayPal or Stripe. 

Which PayPal features will you get?

PayPal is a suitable platform for processing payments both online and in person. Once you create your PayPal Business account, you get access to:

PayPal Payments Standard 

The most basic and easily accessible business service offered by the company is PayPal Payments Standard. This option is ideal for businesses that don’t want to hire developers or simply don’t need extensive customization features. The service can be easily integrated with your shopping cart, and it takes no more than half an hour to set everything up.

PayPal Payments Pro

If you are interested in a more robust checkout service, then PayPal Payments Pro is the solution to look out for. With its help, you can accept payments from 200 countries, and it’s possible to process 25 currencies. You can use a virtual terminal for accepting credit cards online or through mobile devices. Customers get access to more payment options during checkout, meaning you are more likely to get the sale. 

Besides the mentioned payment processing solutions, users of PayPal can also get access to such features:

• Tax calculation tools, which are automatically calculated based on the type of transaction and location;
• An opportunity to apply for a Business Loan. Users can check whether they are eligible with the help of an online tool;
• It is possible to create invoices without any fees. However, there is a fee when you receive a payment through an invoice;
• PayPal envisages protection against chargebacks and fraud;
• Users can access lines of credit for small amounts. 

PayPal has numerous features that make the lives of sellers easier. With the additional tools, you can use PayPal to cover numerous needs of your business. 

What are the main Stripe features?

How is Stripe different from PayPal in terms of features? 

Stripe Checkout

The first feature to discuss is Stripe Checkout, which provides checkout processing for both mobile and desktop devices. There is support for email receipts, discounts, and more. It is integrated with Google Pay and Apple Pay, and there are plenty of customization options for business owners to choose from.  

Stripe Connect

Another feature is Stripe Connect, which allows businesses to manage everything from financial reports to the sign-up process details. There are ready-made interface solutions, or you can start from scratch and customize every aspect. Stripe Connect works in more than 30 countries and processes over a hundred currencies. 

Additional Stripe features include:

• An opportunity to issue gift cards to clients; 
• Protection against fraud with the help of Stripe’s Radar feature; 
• Extensive inventory management features that allow you to set up notifications for when you need to make some purchases;
• You can set up subscriptions and billing; 
• It is possible to invoice customers, but there is a fee for over 25 customers a month; 
• The platform offers tools to tax calculation with a 0.5% fee for a transaction;
• Stripe has effective tools for customer verification.

Stripe is an excellent platform to receive money thanks to an abundance of useful features and a high level of security. 

Integration and Compatibility 

Compatibility of payment processors with various popular platforms is essential, as you want to be able to reach clients in the most effective way. Now, let's compare Stripe and PayPal in terms of their integration with other platforms. 

Stripe Integration and Compatibility

Stripe can be integrated with a range of software, including:

• WordPress
• Magento
• WooCommerce
• Drupal
• Shopware
• PrestaShop, etc. 

What is great about Stripe is that it provides a huge range of integrations, from shipping tools to email alert services and much more. The company has various technology and consulting partners that offer integrated solutions for businesses of all sizes. 

PayPal Integration and Compatibility

PayPal doesn’t disappoint in terms of its smooth integration with different platforms. As for the PayPal software integration, it applies to:

• BigCommerce
• WooCommerce
• GoDaddy
• Wix
• Magento, etc. 

PayPal is compatible with all the largest and most widely used ecommerce platforms, so it’s not surprising that so many businesses rely on it as the primary payment processor. 

Pricing and Fees 

Another important factor to consider is fees and the cost of using the services. Let’s take a look at the Stripe vs. PayPal fees, so you can better understand which service provider will work better for you. 

Stripe Pricing and Fees

How much does Stripe charge vs. PayPal? Stripe has the following fees:

• Online transactions: 2.9% + $0.30 for a card charge 
• In-person transactions: 2.7% + $0.05 for a transaction
• Manually keyed transactions: 3.4% + $0.30 
• Non-profit fee: 2.2% + $0.30 for a transaction
• ACH payment fee: 0.8% for a transaction (maximum $5)
• International card transactions: additional 1.5% fee
• Chargeback fees: $15

When it comes to Stripe's pricing, the company relies on charging fees from customers. You can set up an account for free and only pay fees depending on transactions. Also, there are no monthly or annual fees, so the pricing is fully transparent, and there are no unexpected charges. 

PayPal Pricing and Fees 

Now that you know Stripe fees, it's time to find out how much you will pay for using PayPal: 

• Online transactions: from $2.59 to 3.49% + $0.49 for a transaction
• In-person transactions: 2.29% + $0.09 for a transaction
• Manually keyed transactions: 3.49% + $0.09 for a transaction
• Invoicing transactions: 3.49% + $0.49 
• Non-profit fee: 1.99% + $0.49 for a transaction
• Chargeback fees: $20

Similar to Stripe, PayPal pricing is limited to transaction fees. The company doesn’t charge any monthly fees or additional charges for account inactivity. 

So, is Stripe better than PayPal in terms of pricing? As you can see when looking at Stripe fees vs. PayPal, they are fairly comparable. However, it is also obvious that in most cases, Stripe is a more affordable option for merchants that mainly rely on selling online. At the same time, PayPal has lower fees for in-person transactions, so it all depends on the nature of your business. 

Conclusion

So, is Stripe or PayPal better? There is no one answer to this question, as both of these payment service providers are reliable, have numerous useful features, and can boast an excellent reputation. Those who have smaller businesses are more likely to benefit from PayPal because of its simplicity and convenience for those with no coding skills. 

If you want to go a step further and add more customization to the checkout process of your business, Stripe is the way to go. For high-quality payment customization, It is best to have a developer on your team who will be able to get the most out of all the opportunities this service offers. With Stripe, you will be able to create a checkout process that will be perfectly aligned with your business needs. 

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