Stripe Vs PayPal: Which One Is Better for Your eCommerce Store?

Here is a detailed comparison between the two popular online payment services – Stripe and PayPal. Get to know everything about these two payment services and decide which one works best for you.

Stripe and PayPal – two giants in the global online payment industry have emerged strongly, offering merchants robust solutions to facilitate seamless and secure transactions. If you are confused between these two payment services for your eCommerce store, we can help you with that.

In this blog, we dig deeper into the nuances of Stripe and PayPal, exploring their features and functionality to help you choose the right payment service for your eCommerce business.

From transaction fees to security measures and ease of integration to customer support, this comparison aims to guide you in deciding which payment gateway aligns best with the unique needs of your eCommerce venture.

Here’s a quick comparison table highlighting key points for Stripe vs. PayPal:

Founded in 2009 by Irish entrepreneurs John and Patrick Collison, Stripe has rapidly ascended the ranks to become one of the leading payment processors globally. Known for its developer-friendly approach, Stripe has gained a reputation for providing a robust and scalable platform for online businesses.

It offers a comprehensive suite of payment processing services, including online payments, subscription billing, and mobile commerce solutions. Its Application Programming Interface (API) allows developers to seamlessly integrate payment functionality into websites and applications. Additionally, Stripe has expanded its services to include fraud prevention, business analytics, and optimized checkout experiences.

Stripe is popular among businesses of all sizes, from startups to large enterprises. Its emphasis on customization and scalability makes it appealing to developers and businesses looking for a flexible and agile payment solution. Its diverse range of services caters to a broad spectrum of industries, including e-commerce, subscription services, and on-demand marketplaces.

Established in 1998, PayPal has been a pioneer in the online payment industry, playing a pivotal role in the evolution of digital transactions. PayPal became an independent entity in 2015 and has since become a household name for online payments. With an extensive user base, PayPal has cemented its status as one of the most recognized and trusted payment platforms globally.

PayPal provides a variety of services, including online payments, money transfers, and a digital wallet. Its services extend beyond eCommerce, facilitating person-to-person transactions and acting as a payment method for various online platforms. PayPal has also embraced innovations like One Touch, allowing users to make seamless and quick transactions across different websites and apps.

PayPal’s broad user base spans consumers, small businesses, and enterprises alike. Its user-friendly interface makes it accessible to individuals looking for a straightforward payment solution, while its extensive features cater to the diverse needs of merchants, from small businesses to large corporations. PayPal’s adaptability positions it as a go-to choice for a wide array of online transactions.

Now, let’s look at different aspects of both Stripe and PayPal and see which one works better.

1. Pricing

When it comes to pricing, Stripe and PayPal offer different models to cater to various business needs.

Stripe’s standard Connect comes with a $0 monthly fee, making it an attractive option for businesses looking for a straightforward payment solution. For those opting for additional features like Stripe Express (ideal for marketplaces) or Stripe Custom (allowing white-label customization), there’s a $2 per account charge.

On the other hand, PayPal provides a no-cost entry with PayPal Payments Standard, making it accessible to businesses without a monthly fee. However, for those seeking advanced functionalities with PayPal Payments Pro, there is a $30 monthly charge. 

Major Transaction Fees Comparison

Additional Fees

In addition to transaction fees, Stripe imposes a 1% fee for currency conversion. Small businesses using Stripe have the flexibility to create custom packages, and pricing varies based on factors such as volume discounts, multiproduct discounts, and country-specific rates. The custom Connect plan follows a quote-based pricing model, allowing businesses to tailor the payment solution to their specific needs.

Regarding PayPal, beyond standard transaction fees, it offers optional recurring billing services at a cost of $10 per month. Merchants can also opt for advanced Fraud Protection Services, incurring an additional $10 per month along with a 5-cent fee per transaction.

For a comprehensive overview of additional fees, including chargeback fees and mobile card reader fees, you can refer to PayPal’s merchant fees page for detailed information on costs associated with various services.

🎯 Our verdict: In terms of pricing and transaction fees, Stripe stands out as our top choice due to its transparency and lower costs for advanced features.

2. Ease of Integration

Both Stripe and PayPal are designed to be user-friendly when integrating with popular eCommerce platforms like Shopify, WooCommerce, and Magento.

Stripe provides seamless integration with clear documentation and step-by-step guides for merchants requiring basic coding knowledge. The well-documented API and a variety of plugins make it easier for developers to implement payment functionalities tailored to specific eCommerce setups.

Similarly, PayPal offers straightforward integration and a well-documented process. With minimal technical expertise required, PayPal provides a user-friendly interface and comprehensive documentation, simplifying the setup for merchants without advanced coding skills.

Both platforms offer plugins and extensions to enhance functionality within the eCommerce environment. The choice may depend on the specific requirements of your business, developer resources, and the level of customization needed. Merchants with coding expertise may appreciate the flexibility of Stripe’s API, while those seeking a straightforward setup may find PayPal’s integration process more accessible.

🎯 Our verdict: In terms of ease of configuration and integration, we pick PayPal as it is easier to use and does not complicate things for you.

3. Payment Processing Time

Stripe

In the case of Stripe, transactions generally take around two business days to complete. Once processed, Stripe initiates a payment to the business’s bank account. The payout timing with Stripe can be influenced by several factors, such as the country where the business or consumer is located, the industry type, the account status, and the payout schedule set for the account.

While businesses can manage their payout timing schedule to some extent, factors like industry or country location may impact payout speed. In certain conditions, these factors can influence both the payout timing and the ability to use Stripe’s services efficiently.

PayPal

The speed of transferring money with PayPal varies depending on the chosen transfer method. For Instant Transfer, funds typically appear in your bank account within minutes, although the exact timeframe may vary by the bank. If the transfer doesn’t reflect in your account after 30 minutes, it is advisable to contact your bank for clarification, as PayPal’s team cannot alter the transfer status.

Standard bank transfers are usually complete within one business day, but the total processing time may extend to 3-5 business days due to your bank’s clearing process. Holidays are not considered business days in this calculation. Standard transfers to eligible debit cards take approximately 48 hours, while checks sent through mail typically arrive within ten business days.

🎯 Our verdict: Stripe is generally better for businesses seeking predictable and transparent payout schedules, while PayPal offers faster transfer options, especially with Instant Transfer. So it comes down to your preferences, so we will take it as a tie.

4. Security Measures

Both Stripe and PayPal place a strong emphasis on security to safeguard user transactions. Stripe employs advanced features, including industry-standard SSL encryption and fraud prevention tools powered by machine learning algorithms. Compliant with Payment Card Industry Data Security Standard (PCI DSS) requirements, Stripe ensures secure handling of payment information.

Similarly, PayPal is renowned for its commitment to security, utilizing SSL encryption and sophisticated fraud prevention tools. Compliant with PCI DSS, PayPal prioritizes the secure handling of payment data.

🎯 Our verdict: Stripe is the better option here as it combines advanced machine learning-powered fraud prevention with PCI DSS compliance for top-tier security.

5. Scalability and Customization

Both Stripe and PayPal offer scalability, allowing eCommerce businesses to expand seamlessly. Stripe excels in customization, providing extensive flexibility through its developer-centric approach and versatile API. Businesses with specific technical requirements and a focus on customization may find Stripe particularly well-suited to their needs.

On the other hand, PayPal, with its widespread acceptance and user-friendly features, provides a scalable solution with a more straightforward approach to customization, making it a solid choice for businesses of varying sizes and technical expertise.

🎯 Our verdict: When considering scalability and customization, we pick Stripe for its scalability and extensive customization due to its developer-centric approach and flexible API. However, PayPal isn’t lagging behind; it offers adequate customization options.

The comparison between Stripe and PayPal reveals that both platforms offer robust solutions for online payments, each with its unique strengths.

Stripe stands out for its developer-friendly approach, extensive customization options, and scalability, making it a choice for businesses with specific technical requirements and a focus on flexibility. On the other hand, PayPal, with its widespread recognition, user-friendly interface, and established reputation, provides a solid and accessible option for businesses of varying sizes.

When deciding between Stripe and PayPal, it’s crucial for eCommerce stores to consider their individual needs and priorities. If customization, developer control, and scalability are paramount, Stripe may be the preferred choice. For those prioritizing user-friendly features, widespread acceptance, and a straightforward setup, PayPal offers a reliable solution.