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Well, PayPal and Stripe are the two that are at the top of the game. So the question that arises is PayPal vs Stripe: Who should we choose?

In the wake of digitization, e-Commerce has become the most prosperous sector. Online stores have flourished enormously in recent years. And, one of the main contributing factors is the ease of online payment.

Owners of these businesses can easily accept payments on their websites using payment gateways. But, this is also where many become confused about which payment gateway to use.

If you are just starting an eCommerce business, there are tons of things you will need to think about: should you use a hosted platform or run your store with a plugin? What are the strategies you need to increase your sales?

But, the basis of your business is receiving payments from your customers, so how do you go about it? There are two main solutions for your merchant site: Stripe and PayPal .

While they offer comparable functionality, how do you know if one or the other is the best fit for your eCommerce site? That’s where this article comes in.

Today we’re going to compare and contrast these two payment gateways and get to the bottom of the Stripe vs PayPal debate.

What is a payment gateway?

Payment service providers like PayPal and Stripe connect business owners with merchant accounts to accept payments from customers. These payment service providers provide payment gateways and technology that allow business owners to authorize online payments on their websites.

Basically, they provide the privacy and security of user payment and credit card details in online transactions. They are the means by which business owners can process customer payments on the website. Hence, it enables users to make online payments conveniently.

In this article, you will learn about the compression of Stripe vs PayPal gateway is the best for you. Both provide functionality that is similar and comparable. So we have reviewed these two payment gateways considering the main factors.

Before we get into the PayPal vs Stripe comparison, let’s take a quick look at the two payment gateways.

stripe vs paypal

Paypal

PayPal is one of the most popular payment gateways that many types of online business owners rely on. It offers several pricing plans that businesses can choose from based on their requirements. However, the PayPal payment standard is most well-received due to its ease of use and cost. You can easily integrate it into your e-Commerce website without having much coding knowledge.

Stripe vs Paypal

Also, you don’t need to pay for setup costs and monthly fees for the free version. With this, you can accept payments from credit cards, PayPal and PayPal Credit. However, there is a significant downside, as customers will be redirected elsewhere during checkout. You can fix this problem by getting PayPal Payments Pro. But, it costs $ 30 per month.

How much is the Paypal micropayments fee costs?

When it comes to micropayments, PayPal is the winner. Paypal micropayments are feesable

  • $ 1: 5% of $ 1 = 5 cents and 5 cents + 5 cents = 10 cents
  • $ 5: 5% of $ 5 = 25 cents and 25 cents + 5 cents = 30 cents

Stripe

Stripe is arguably the most popular payment gateway after PayPal. It allows you to process all major credit card payments on your e-commerce website. Its setup is completely free and there are no monthly fees. It also offers more customization options for businesses.

paypal vs stripe

It doesn’t offer pricing plans as PayPal does, but, you can purchase the additional tools and features that it does. With Stripe, you have the benefit of doing checkout without redirecting customers off your website. And, there is no additional monthly charge for it.

What is the Stripe micropayment fee?

Stripe Micropayments usually cost 2.9% + 30 ¢ per transaction.

PayPal vs Stripe: Payment methods

Paypal

Depending on the different pricing plans, PayPal offers various payment methods. Depending on the type of payment method you need, you should choose a pricing plan.

  • Paypal
  • PayPal Credit Credit card
  • Debit cards
  • Pay by Phone (Virtual Terminal)

Stripe

If you want more payment methods for your website, you can definitely go for Stripe as it offers a wide array of options . With Stripe, you can accept major debit cards and credit cards. In addition, you can also accept payments through digital wallets such as Apple Pay, Google Pay, etc.

  • Credit card
  • Debit cards
  • International Cards
  • AmEx check
  • Masterpass by MasterCard
  • Visa Checkout
  • WeChat Pay
  • Alipay
  • Apple Pay
  • Google pay
  • ACH credit and debit
  • SEPA direct debit
  • And more

While all of these wallets are worth mentioning, the most notable integrations are Mastercard’s Visa Checkout and MasterPass. Why are they so important? Visa and Mastercard claim 80.1% of the total card network.

Being able to work with their native portfolios is definitely a big plus for an eCommerce store .

If the inclusion of Stripe’s extended wallets and card networks gives them that victory, PayPal Credit can easily tip the scales in its favor if your customer base is primarily in the United States.

Read: Free alternatives to HootSuite

PayPal vs Stripe: Refunds

Refunds are the reversal of credit card payments that is initiated by the customer’s bank. It protects customers against potential fraud. But, it can be a big challenge for the online store owner. Payment gateways charge business owners a certain amount as a chargeback fee.

  • PayPal chargeback fee: $ 20
  • Stripe Chargeback Fee: $ 15

PayPal vs Stripe: Online Invoicing

Online billing is available for both payment gateways. While PayPal offers this feature completely free , you have to pay for billing transactions after you bill more than $ 1 million with Stripe.

PayPal vs Stripe: Recurring billing

There is no recurring billing feature for PayPal Standard. Therefore, PayPal charges a monthly fee of $ 10 for recurring billing. Additionally, customers in the recurring billing plan can cancel their plan without notifying you.

So, Stripe is the best choice here because it is 100% free and customers cannot cancel their recurring billing plan without your permission.

PayPal vs Stripe: Checkout

PayPal Standard

If you choose the free PayPal option, you will face a big problem. During the checkout process, customers are redirected to the PayPal account page from your website. This increases the chances of customer abandonment of payment. But, there is a way to complete the payment without redirecting customers away from your website. You must upgrade to PayPal Payments Pro.

PayPal Payments Pro

With the pro version, you don’t have to worry about PayPal Standard’s checkout problem. But, keep in mind that with this you have to pay the monthly fee of $ 30.

Stripe

With Stripe, your customers can easily make credit card payments without having to leave your website . Payment is made on the website making payment convenient and effortless. Also, there is no additional charge or monthly fee for this. Stripe offers these features for free.

PayPal vs Stripe: Supported Countries and Currencies

Another factor in determining which payment gateway to choose for your website is the overall reach and the currencies supported. To expand your business, you need to choose a payment solution that is available in countries around the world.

Well, the payment gateway that is available in over 200 countries is PayPal . Which is great if you have customers in different countries. But, if you want to accept all currencies on your e-commerce website, PayPal may not be the best choice. PayPal only supports about 25 currencies .

Stripe certainly has the upper hand in that it supports over 135 different currencies . Thus, this gives a great opportunity to business owners to expand their sales across the world. But, keep in mind Stripe is only available for 25 countries .

PayPal vs Stripe: Customer support

Paypal

Customer support is another important factor to consider when it comes to choosing a payment gateway for your website. PayPal and Stripe both have various mediums through which they provide support to their customers.

  • PayPal offers a knowledge base that answers frequently asked questions about payments, refunds, PayPal Mobile App, Products and Services, and many more questions related to PayPal.
  • Other than that, there is also the PayPal Community Forum where you can post if you are having trouble with PayPal.
  • In addition, PayPal offers email and live chat support to contact PayPal directly and ask any questions.
  • You can also get support over the phone, but it is not always consistent.
  • And, you can use social media for PayPal if you want to resolve your issues or contact them publicly @AskPayPal on Twitter.

Stripe

  • Stripe also offers a knowledge base that answers questions you have about your account and other questions. You can search for articles related to your issues.
  • As Stripe is extremely user-friendly for developers, it offers documentation complete for developers that focuses more on features.
  • It offers the possibility to its users to get in touch with the developers for technical questions. There is also the support by Live Chat users can use their account through Stripe.
  • The support by email is also there for questions and queries if not urgent. Stripe also offers telephone support .
  • The user must request to get a call from Stripe.
  • And, you can use social media for Stripe if you want to fix your issues or contact them publicly @Stripe on Twitter.

When your livelihood is online, you need a payment gateway that can provide immediate assistance. And until recently, Stripe was lacking on this point. However, as of July 2018, they are now offering 24/7 support via phone and live chat. You can also connect to the #stripe IRC channel on Freenode.

According to Invesp data, 73% of customers are more satisfied with live chat. Unfortunately, PayPal does not achieve this level of support at all. Currently, their available support channels are phone, Q&A, or email.

While they provide a forum where community members can be available at all times, it is not the same as receiving official support. Therefore, the information in this forum should be taken with caution.

PayPal vs Stripe: Dispute and chargeback fees

Chargebacks are painful for everyone involved. When a customer initiates a chargeback, you can anticipate more than just runaway payments – you’re going to run into additional charges, too.

PayPal chargebacks and associated fees include unauthorized transactions, complaints for items not received, or for items that are significantly different from the description.

When they initiate a chargeback, the amount is refunded to the customer and the credit card network charges the merchant a fee of up to $ 20. (Fortunately, these fees are refunded if they later rule in your favor.) Stripe, on the other hand, takes a much simpler approach and classifies “disputes” simply as chargebacks.

Disputes through Stripe also have a smaller, refundable fee of $ 15. And, as an added bonus, Stripe gives merchants the ability to prevent credit card fraud with their new Stripe Radar features.

 

Conclusion

Which one to choose stripe vs paypal ? Depending on the number of transactions and sales of your business, you can choose either of the payment gateways. Small businesses that don’t have developer access can simply choose PayPal. PayPal is best for companies that accept more of micro-transactions too.

For large businesses that want to promote their brand and want more personalization, Stripe is the best option. The truth is, you can use both .

If you are a business that has a wide range of customers all over the world, you can integrate both PayPal and Stripe on your website.

There are a lot of companies that use both payment gateways. Nevertheless, you can choose one or the other according to your requirements.

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