As top players in the online payments industry continue to innovate rapidly, understanding your options can sometimes, get complicated. But, once you are familiar with all of the names you should know, you have got to turn around and choose one of them for your business. So, how does a small business owner make differences between Stripe vs PayPal? Even more, how do you choose and which way you consider and think most to choose one of these payments companies for your business?
We will help you understand the details that distinguish Stripe vs PayPal, including the ins and outs of their offerings, plus a detailed description of the costs that each comes with.
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Here is your ultimate guide to understanding whether Stripe or PayPal offers the best payment processing solutions possible for your business’ online payment needs. Before we dig into the process of distinguishing Stripe vs PayPal, let us first lay down some fundamentals. Understanding whether Stripe or PayPal is the best option for your business will require you to be familiar with the fundamental products that each option offers.
PayPal offers online checkout experiences, invoicing and in-person payments which best fits for E-commerce companies that need easy online payments. PayPal’s offerings are much broader. That said, because of how many products PayPal has begun to offer, trying to understand PayPal’s payment options can be a bit overwhelming. So, in order to understand this in a much better way, let us break them down to make PayPal’s payments suite easier to wrap your head around.
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First, PayPal’s core product is the checkout experience they offer. There are three options for this product. PayPal Checkout is simply a plug-in “Pay With PayPal” button that you can integrate into a pre-existing checkout. In contrast, PayPal Payments Standard offers a full, generic and free checkout experience for your business’ website. Ultimately, PayPal Payments Pro is a customizable payments API, much like Stripe’s basic product.
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Second, PayPal also offers online invoicing. And also creating and sending invoices through PayPal is free, though you will have to pay a transaction fee once your customer fulfills the invoice with a credit or debit card, which we shall cover in the later section.
Finally, PayPal also offers in-person payments through its app PayPal Here and mobile card readers that turn smart devices into functioning point of sale (Point of sale – POS) systems.
Stripe is an online payment API that is the best fit for high-tech business-to-consumer E-commerce companies. The core product that Stripe offers is an online payment API for businesses’ websites and apps. Stripe is an extremely developer-centric online payment option that offers customized payment styles like billing and platform payments.
Stripe lets you make payments APIs through the Integrated and customized versions of their product. Overall, Stripe is so developer-friendly that their integrations into websites are seamless: It is hard to tell when you are using a Stripe payment API to checkout. But odds are, you probably have. Stripe automates online payments for some of the biggest brands out there, such as Target, Glossier, and Lyft.
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What To Consider When Choosing Between Stripe and PayPal Online Payment Services
Both Stripe and PayPal are very transparent about their fees, which is one of the reasons why they are leaders in the online payments industry. Both Stripe and PayPal’s U.S. fees per transaction are 2.9% plus 0.30 cents, and both offer plans with no setup costs, basic monthly fees, or contracts.
Therefore with both Stripe and PayPal, your business is eligible and able for lower pricing if you hit a certain number in monthly sales. Stripe fees get down at $80,000 per month and for PayPal, it happens at a much lower sales volume of $3,000 per month.
Both companies offer non-profit discounts at 2.2% plus 0.30 cents for U.S. fees.
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If you are processing transactions of less than $10, Stripe offers micropayment support with the same flat rate as your standard fee per transaction. PayPal’s micropayment rates are 5% plus 0.05 cents per transaction.
A chargeback is a charge reversal that happens when somebody contacts their bank and reports a transaction on their card that they do not agree with or think is fraud. They protect and guard cardholders but are sometimes over-utilized which can be frustrating since your business will pay a fee for each chargeback that happens. Stripe has a chargeback fee of $15, while PayPal’s chargeback fee is $20.
Also, if your customer gets a refund, Stripe will not return any processing fees to you. Another side, PayPal will return just the fixed fee, but not the percentage.
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Stripe has several ways to get in touch when you have questions including a help center, social media and chat support channels (with support representatives or developers), plus phone and e-mail support.
PayPal, too, has multiple ways to get answers to your questions from their customer support team like a community forum, a help center, and social media, plus e-mail, live chat, and phone support.
Users say that the quality of customer service from both Stripe and PayPal can vary from good to poor and is frustrating at times. However, Stripe recently added functionality of accessing 24/7 to both phone and chat support while PayPal’s support still goes dark at some hours of the day. Stripe has also added and upgraded an option for paid Premium Support with additional and cool features.
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Both Stripe and PayPal are well-known for being easy and effortless. Therefore customers can easily pay online without facing any hurdles.
Stripe is more customizable over PayPal. However, to embed and add a feature like a Pay With Card button on your site, Stripe requires a bit more development knowledge and can sometimes be tricky for non-technical users. With WPForms, setup for both Stripe and PayPal is a breeze since they are both available in our pre-built form templates with the Stripe and PayPal Standard Add-ons.
Both Stripe and PayPal’s services are PCI Compliant. In other words, they meet the strict standards of the Payment Card Industry and your cardholder data is stored securely.
PayPal is available in many more countries than Stripe. Currently, PayPal is offered in over 200 countries while Stripe has just over 32 countries (and growing).
Stripe will automatically deposit your funds into your business bank account with a 2-day average payout time. On the other hand, your funds are available immediately in your PayPal account with PayPal Standard. However, PayPal averages a 2-4 day payout time when moving your funds from your PayPal account into your bank account.
You both can use whether it is Stripe or PayPal with WordPress and both products are integrated with (WPForms- WordPress form).
Sometimes, you may want to move and transfer all your data to another payment processor that is not Stripe or PayPal. This is known as Data Portability. Stripe values Data Portability, so they will help you move your credit card data in a PCI compliant way.
PayPal, however, will not give you this data if you try to switch processors, which can be a headache. For some people, it is important to have the choice to be able to move their payment data if they want.
Stripe and PayPal both have customizable online invoicing. This is completely free with PayPal and free with Stripe until you bill over $1 million. You can be amazed at how quickly your sales add up.
If you are a brick-and-mortar store adding an online presence and want to use the same payment processor for your store-front and your website, you can do just that with both Stripe and PayPal.
PayPal offers functionality to integrate into many popular Point of Sale systems, and both Stripe and PayPal offer their own physical card readers. Furthermore, PayPal offers you free card readers and also has paid card readers you can buy, while Stripe only offers paid card readers.
It is important to note that Stripe lets people pay you without ever leaving your website. PayPal requires people to exit your website to sign in to a PayPal account before being redirected back to your site, which may be undesirable for you if you want to keep your branding consistent from start to finish during your customer’s buying process.
On the other hand, this step may not bother some business owners as this is a fairly familiar process for many customers, but it is a factor to consider.
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Here are some of the benefits of using Stripe to accept payments from customers online
Let us check out some benefits of using PayPal Standard for accepting payments on your website:
PayPal Standard Cons
Like most things, there are a few downsides to using PayPal Standard to accept payments on your website. Let us take a look at these as well:
So, which online payment gateway should you use for your business? The answer depends on your business’ individual needs including your industry, the type of customers you have and what you are selling. One type of merchant may prefer to go with one payment solution over another.
It is also important to note that with WPForms, you do not have to select just one payment solution to accept payments on your website. To use both Stripe and PayPal, you will need to set up accounts with each company. This way, you can allow your visitors to select which one they want to use.
If you do this, keep in mind that your funds will be deposited to your bank account separately, which could cause extra administrative work. You will be spending more time dealing with both Stripe and PayPal if you are using the two, so weigh all your options before deciding if this is the best route for you.
With the simplicity of WPForms -the WordPress contact form, even non-technical people can create beautiful order forms that accept payments or donations right on their WordPress site with pre-built form templates. You can easily let users choose if they want to pay through either Stripe or PayPal in your forms.
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Both Stripe and PayPal offer great features and major flexibility. Ultimately, which payment gateway you choose depends upon your business’ specific needs. Accepting payments in WordPress is super simple with WPForms. With Stripe Add-on and PayPal Standard Add-on features, you can easily collect payments and donations through the most popular online payment gateways directly on your website.
And there you have it! You can now make an educated decision about whether Stripe vs PayPal will be a better fit for your business to collect payments or donations online, based on their individual pros and cons.