Both Stripe and PayPal offer a number of advantages to those who sell online that can’t be had with a regular merchant account. They’re much faster and simpler to set up, integrate more readily with online stores, and new or small businesses don’t face the income and credit hurdles they would with a merchant account. And if you’re not doing a large volume of credit card sales, going with PayPal or Stripe can end up saving you money on fees as well.
As the two companies have shot up to the top of the online payment processing market, they’ve wound up in the same place as far as fees go — a fixed 2.9% plus 30 cents per transaction for payments over $10, regardless of the volume you do or what type of account you have with them. So when it comes to choosing between them, you have to take a deeper look at the various services they offer as well as potential added fees. Today’s post puts their offerings side by side to make that process a little simpler.
PayPal does have some small added fees attached to certain situational things, like a 30 cent fee for card authorizations and refunds, and an added 1% transaction fee for card payments from outside your country. Depending on your business, you may or may not encounter these in significant numbers.
The one area where PayPal’s added fees are significant for everyone selling online is in terms of integration with your site and shopping cart. If you want the convenient and seamless PayPal Express Checkout functionality, however, then they’re going to ask you to either pay $5 per month to get an Advanced account, or $30 per month to get a Pro account (which also adds a virtual terminal for payments made over the phone).
Stripe currently doesn’t charge added fees for any of the above, including their seamless checkout integration service. For this reason, Stripe definitely has at least a small edge in this category.
Setup And Operation
There are wide-ranging arguments throughout the internet about whether Stripe or PayPal is more user-friendly. What it boils down to is this: Stripe is probably going to be better if you either have some coding experience, or are paying someone to put the technical end of your site together. PayPal makes it easier for the DIY small business owner trying to put their responsive site and shopping cart together with no technical experience whatsoever, which is part of why they charge a monthly fee for integrated checkout while Stripe does not.
Even if you have no prior coding or website design experience, it’s still fairly simple to get Stripe’s basic functionality in place on a website and they have a reputation for excellent documentation. If you absolutely want to do no technical work whatsoever, however, then PayPal has to get the small edge here for making that possible.
There’s a clear winner in this area — Stripe. PayPal doesn’t offer any direct way to accept Bitcoin payments at present. Stripe welcomes them, however, at a transaction fee of 0.8% (with a cap of $5 total).
As with Bitcoin, if offering Apple Pay is a priority to you, then Stripe is the only game in town. Apple and PayPal were in talks about a partnership a couple of years ago, but nothing ever materialized and Apple appears to now view PayPal as a competitor rather than a potential partner.
The Escape Hatch
So what happens if you pick one service, end up deciding it’s not a good fit a few months down the road, and want to give the other one a shot? Stripe is definitely the better first choice in this scenario, as they’ll allow you to securely migrate your data to a variety of competing services, including PayPal. On the other hand, PayPal locks your data in and won’t give you any assistance in migrating it.
Which Is Better?
It’s impossible to unequivocally say one service is better than the other for everyone’s needs. There’s a few situations where Stripe is going to be a better fit, even more situations where they’re roughly on par, and one particular situation where PayPal is a better fit — if you have no tech experience, no budget to hire someone and are trying to put together your whole online operation by yourself. Those with web design / coding staff or experience may well find Stripe to be more robust, however, and that paired with its lack of peripheral fees definitely makes it worth a close look before settling on PayPal.
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