Stripe Vs Paypal: How Do The Most Well Known Payment Processors Compare?

The tremendous increase in e-commerce business has led to exciting growth in payment processors. For many years, PayPal was the most used processor for merchants. However, in 2010 the launch of Stripe has given Paypal some competition.

The ultimate decision when choosing a payment processing system is based on the needs of your business. Click To Tweet



The strength of PayPal and Stripe is due to their various e-commerce features including support for digital goods, subscriptions, and mobile app payments. However, even though the two systems do fundamentally the same thing, they do them in very different ways.

If you don’t want to have to choose between which payment processor to use, accepting payments using both is always an option. But if you do have to make a choice, it’s best to know the options. Let’s go through a comparison of the two based on categories including transaction fees, payment types, the system set up, security and third-party integrations.

Transaction Fees:

In the US, Stripe and PayPal charge similar rates. For successful transactions, they charge the same basic fee of 2.9% + $0.30 for each payment. If you see a large number of international transactions, you may see a difference in the cost. PayPal charges 4.4% plus a standard fee for international payments. Stripe does not have this additional charge for international transactions. The other difference is in how they handle chargeback transactions. Stripe refunds the disputed amount for $15 and PayPal refunds $20.

PayPal also assesses fees for the following: recurring billing, currency conversion, refunds, American Express payments, and mobile card reader transactions.

Stripe’s fee structure is more simplified. Outside of the standard fee charged per transaction, Stripe has fees associated with: processing international credit card payments, converting currencies, processing payment disputes, billing (invoicing) services and the original fee assessed for refunds.

Payment Types:

The main focus for Stripe is functioning as a payment gateway. The priority is processing credit card payments, their singular focus. Because of this focus, the list of payment options is extensive including; Bitcoin, Apple Pay, Android Pay, echecks, credit and debit cards, ECH and EFT transfers, international credit cards, Google Pay, Ali Pay, Visa Checkout and on and on and on. They handle the payments but the payment options you are able to accept is endless.

On the other hand, PayPal functions as a payment gateway and also offers a number of other business solutions. It is not their singular focus. They currently accept PayPal, PayPal credit, credit card, debit cards or pay by phone. The options are not quite as extensive. If the restricted list of options is a concern, Stripe is a viable option.

System Set Up:

When it comes to the system set up, the difference between the two is significant. To get up and running with your PayPal account, you need to copy and paste a few lines of code on to your website. It’s pretty quick and simple. Once it’s complete, you’ll see the “Buy It Now” button appear which allows you to start using the account. PayPal is the payment processor for you if you do not want to do a lot of work. If you are a Yondo user, you can find easy step-by-step instructions on the support page to integrate PayPal or Stripe into your website.

When using Yondo, the set up for both payment gateways is fairly easy and you have a support staff to help. If you are setting up Stripe as a payment gateway on your own, it can be a bit more difficult, unless you have web developer experience. With Stripe, there are several lines of code that need to be installed to begin using the account. The offset of the difficulty of setup is the customization of Stripe. If you have the experience, you have the option to customize this gateway to your preference.


One of the benefits of entrusting payment processing to a third party is to eliminate the responsibility of having to securely handle data. Your website may be well-secured but payment information requires a new level of security you may not be prepared to handle. The good news is that both PayPal and Stripe have a excellent security and are PCI compliant.

In addition, Stripe has taken additional measures to be compliant with international standards. Another benefit of Strip security is its Stripe.js program, which allows users to collect payment information without storing it on their own servers.

PayPal does offer a developers’ kit that helps with setting up payments and storing the information in a vault. With this feature, you are still storing the information on your own server, which could lead to hacking or other breaches of security. You are also at the mercy of the developer who implements your security system unless you are comfortable with coding and API’s.

Third Party Integrations:

When it comes to integration, there is also a large difference between the two systems. If you just need a payment processing system, the minimal integrations of PayPal may be enough for your business. They integrate with platforms like Yondo, Quickbooks, CRM’s and Salesforce to name a few. This is all that some businesses need from their payment gateway.

If integration is important for your business, Stripe has a much more extensive list of options including; Yondo, CRM, eCommerce, Email Marketing, Inventory Management, Recurring Payments and much more. Depending on the needs of your business, integration can be an important factor in the decision.


The ultimate decision to choose PayPal or Stripe depends on the needs of your business. PayPal may be the most well-known payment processor but Stripe has a lot to offer as well. If your business trades internationally, Stripe could be a way to save money on additional fees, as well as, offer extensive payment options. Keep in mind, the decision does not have to be an either-or situation. Offering Stripe alongside PayPal is an option used by many companies.

Running both PayPal and Strip payment processors will give your business greater payment visibility. It will allow you to accept international payments with ease. It will also help establish your brand as being up to date with the latest in payment technologies.

The advantage of using both Paypal and Stripe is you can allow your entire customer base to choose which payment type that wants to use no matter where they are in the world.



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