Logo

Paypal vs. Stripe - Which Payment Processor is Better for Your Business

January 20, 2022

Paypal vs. Stripe - Which Payment Processor is Better for Your Business

As an online business owner or a freelancer, payment gateways are an indispensable part of your day-to-day operations. But how do you choose the right payment processor for your business? With hundreds of options available, it can be overwhelming to find the perfect one. Among these options, PayPal and Stripe are two of the most popular payment processors in the world.

Both Paypal and Stripe provide similar services but have key differences. We'll compare the two payment processors based on a few important factors that businesses should consider when choosing their payment gateway.

Pricing

Pricing is one of the most important factors to consider when choosing a payment processor.

PayPal charges a flat rate of 2.9% + $0.30 for each transaction. This rate is the same for all credit card types and is charged on transactions that are invoiced or paid for through the PayPal payments website. PayPal's fees can be lower, depending on how much you generate per month.

On the other hand, Stripe charges a slightly lower rate of 2.9% + $0.30 for each transaction, which is the same as PayPal's. However, Stripe has a slightly different fee structure for international cards, which cost an additional 1% per transaction.

It's essential to note that PayPal charges an additional fee of 1% for international transactions, whereas Stripe does not charge any additional fees for international transactions.

In summary, if you mainly deal with domestic transactions, Stripe might be the better choice. However, if your business frequently involves international transactions, then PayPal might be the better option.

Ease of Use

The ease of use for each payment processor is another essential factor to consider when making this decision.

PayPal is well-known and widely used among merchants and consumers, making it easy to integrate into most online shopping carts. Additionally, PayPal offers various additional features, such as dispute resolution and a seller protection policy.

Stripe, on the other hand, is designed with developers in mind. As a result, it may be more challenging to integrate with your website's shopping cart, especially if you don't have coding knowledge. However, Stripe does offer a host of customization options, including support for multiple payment methods, including digital wallets like Apple Pay and Google Pay.

Security

Security is a crucial factor to consider when choosing a payment processor.

PayPal and Stripe both offer a high standard of security, including two-factor authentication, encryption standards, and fraud detection. However, PayPal's platform is somewhat more secure since data is hosted only on PayPal's server.

Stripe's security measures are also impressive, and the company is certified under the PCI-DSS and uses TLS encryption. However, since some data is stored on your server, it's more vulnerable to attacks.

Payout Options

PayPal allows merchants to transfer payments to bank accounts, PayPal accounts, or issue checks. It has a minimum payout threshold of $1, and transfers completed within a few business days.

Stripe offers a more straightforward payout process. It allows you to transfer payments directly to your bank account and set up an instant payout service. Additionally, Stripe can be customized to pay recipients in other countries and with multiple payment methods.

Conclusion

So which payment processor should you choose for your business? Both PayPal and Stripe have their pros and cons.

PayPal might be the better option if your business has a lot of international transactions, and you want easy integration with most shopping carts. On the other hand, Stripe is an excellent choice if you aim to give your customers more payment options and want personalized reports.

Ultimately, which payment processor is better for your business will depend on your specific needs and the type of business you run.

As a final piece of advice, we suggest trying out both payment processors and seeing which one works best for your business.

References:

© 2023 Flare Compare