stripe-vs-paypal-pros-cons

Stripe vs PayPal: Which Payment Processor is Best?

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Are you trying to decide between Stripe vs PayPal to collect payments or donations on your website?

Stripe and PayPal are the most popular online payment solutions, so your decision on a payment provider probably comes down to these two.

This article will compare the pros and cons of both payment gateways, so you can decide if Stripe vs PayPal works better for you.

Accept Stripe + PayPal on Your Site Forms Now

How to Accept Stripe and PayPal on Your Website

Collecting payments on your website is easy with WPForms for many types of businesses, including:

  • Brick-and-mortar shops who want to also sell online
  • Freelancers
  • Nonprofits collecting donations
  • eCommerce companies
  • Agencies
  • Online marketplaces
  • Entrepreneurs
  • And more

To get started creating a simple order form right away, read our tutorial on how to create a simple order form in WordPress.

WPForms integrates with Stripe, Authorize.Net, Square, and PayPal for accepting payments.

The Stripe integration is available in both free and paid versions of WPForms, while PayPal is Pro and above only.

Stripe vs PayPal Compared

To collect funds from your site visitors through your website, your business needs a payment provider.

Stripe and PayPal are two of the most well-known payment solutions that let you collect money online.

If you want to know the differences between Stripe and PayPal, use the handy table of contents to navigate the comparison.

1. Overview of Stripe and PayPal

PayPal is available is many more countries than Stripe. Currently, PayPal is offered in 200+ countries, while Stripe has just 46+ countries (and growing).

However, both Stripe and PayPal and both great options to start accepting payments online. Here’s a brief summary of the two, detailing their key features.

Stripe

The Stripe Homepage

Stripe is an online payment service that lets people accept and send money over the Internet, and its popularity is growing in the eCommerce world.

Stripe is especially liked by code-savvy people or teams with in-house programmers because of its customizable development tools.

It’s a popular pick for small businesses but is also used by companies like Pinterest, Lyft, Blue Apron, and TaskRabbit.

If you want to start accepting payments via Stripe, read our article on how to accept payments with Stripe.

PayPal

the paypal homepage

PayPal is a payment solution that lets users make and receive payments online, and it’s very well-known.

The platform claims to have over 430 million customer accounts, including over 21 million merchants in the US alone.

Nearly everyone has a PayPal account these days, and it’s easily one of the most recognizable names in the eCommerce payments industry.

It is also among the few payment solutions that even accepts payments via Crypto, which is subject to fees and exchange rates.

2. Pricing Information for Stripe and PayPal

It’s a smart idea to compare the two payment gateway services for your business. So, let’s compare the basics related to their pricing information.

Stripe

Millions of websites online use Stripe to accept payments, send payouts, and automate their financial processes. Here’s how the pricing works:

Service Stripe
Fee per Transaction* 2.9% + 30¢**
Nonprofit Discount* 2.2% + 35¢***
Setup Costs or Monthly Fees No
Contract Required No
Micropayments (<$10) 5% + 10¢***
Recurring Billing 0.5%+
Chargeback Fee $15
Refunds No Fees Returned
Customer Support Email, Help Center, 24/7 Phone & Chat
Ease of Use Easy
Ease of Setup Moderate
PCI Compliance Yes
Countries Available 32+
Access to Funds Times 2 Days (Average)
Data Portability Yes
Online Invoicing Free for your first $1M in sales
In-Person Card Readers Paid
Payments Handled 100% on Your Site Yes
*US-based only. Fees vary by country.

**In Lite to Plus versions of WPForms, there’s a 3% charge + Stripe fee per transaction. The 3% charge is removed for Pro and above users.

***Includes RADAR fee. See below for more info.

Stripe also charges a RADAR fee of .05¢ for every transaction attempted. The RADAR fee will be charged even if the payment fails.

For example, if a user enters the wrong expiry date, you will be charged a RADAR fee for that attempt. If they then try again, you’ll be charged a second RADAR fee, and so on.

This fee is waived on Standard accounts. But if you are a nonprofit, you will be charged RADAR fees.

If you’re processing transactions of less than $10, you’ll be charged a different rate. At Stripe, you will be charged a 5% + .05¢ micropayment rate, plus a .05¢ RADAR fee per attempt on top.

Chargebacks/Refunds

A chargeback is a charge reversal when somebody contacts their bank and reports a transaction on their card that they don’t agree with or think is fraud.

Stripe has a chargeback fee of $15. Also, if your customer gets a refund, you won’t get your processing fees back from Stripe.

Access to Funds Time

Stripe will automatically deposit your funds into your bank account with a 2-day average payout time.

PayPal

PayPal is very transparent about its fees, which is one of the reasons why its a leader in the online payments industry. Here’s how the pricing works:

Service PayPal Standard
Fee per Transaction* 2.9% + 30¢
Nonprofit Discount* 2.2% + 30¢
Setup Costs or Monthly Fees No
Contract Required No
Micropayments (<$10) 5% + .05¢
Recurring Billing No
Chargeback Fee $20
Refunds No Fees Returned
Customer Support Email, Help Center, Phone & Chat
Ease of Use Easy
Ease of Setup Easy
PCI Compliance Yes
Countries Available 200+
Access to Funds Times Immediate
Data Portability No
Online Invoicing Free
In-Person Card Readers Free & Paid
Payments Handled 100% on Your Site No
*US-based only. Fees vary by country.

Where Stripe fees get lower at $80,000 per month, PayPal happens at a much lower sales volume of $3,000 per month.

Both companies offer nonprofit discounts at 2.2% + 30¢ for US fees, which makes them a great choice if you’re trying to build nonprofit donation forms for WordPress.

PayPal’s US fees per transaction are 2.9% + 30¢ and it offer plans with no setup costs, basic monthly fees, or contracts.

If you’re processing transactions of less than $10, you’ll be charged a different rate. PayPal’s micropayment rates are 5% + .05¢ per transaction.

Chargebacks/Refunds

A chargeback protects cardholders but is sometimes over-utilized, which can be frustrating since your business will pay a fee for each chargeback that happens.

PayPal’s chargeback fee is $20. Also, if your customer gets a refund, you won’t get your processing fees back from PayPal.

Access to Funds Time

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.

3. Easy of Use and Setup

Now that we’ve given a basic overview of Stripe and PayPal, how do they stand regarding ease of use and setup processes? Let’s find out!

Stripe

Stripe is known for being super easy to use. The platform has made it really simple for customers to pay online.

Moreover, Stripe is more customizable than PayPal, but embedding a feature like a Pay With Card button on your site requires more development knowledge.

It can sometimes be tricky for non-technical users. WPForms is the best Stripe plugin for WordPress, so integrating it with Stripe shouldn’t be a problem.

Stripe does, however, offer a testing environment for making sure everything works smoothly before going live.

PayPal

Setting up PayPal on a website is generally considered to be quite straightforward and is one of the reasons it’s such a popular payment solution.

It offers ready-made buttons for ‘Buy Now’, ‘Donate’, and ‘Add to Cart’, which can be easily integrated into your website by copying and pasting HTML code.

Similar to Stripe, PayPal also offers a sandbox environment. This helps ensure a smooth payment experience for your customers.

Once set up, PayPal allows for various payment options (including credit and debit cards and PayPal credit), recurring payments for subscriptions, and global transactions in multiple currencies.

4. Security, Compatibility, and Data Portability

Assessing how Stripe and PayPal perform under different circumstances is very important. Here we dive deep into their features:

Stripe

You’ll be pleased to hear that Stripe’s services are PCI compliant. In other words, it meets the strict standards of the Payment Card Industry.

All cardholder data is stored securely. You can also use Stripe with WordPress, as it is well integrated with WPForms.

Stripe also values Data Portability, so they’ll help you move your credit card data in a PCI Compliant way.

Online Invoicing

Stripe offers businesses customizable online invoicing, but Stripe will bill you over $1 million. You may be surprised how quickly your sales add up.

If your online store is doing poorly in sales, check out this guide to eCommerce optimization on our sister site that can help boost your revenue.

Card Readers

If you’re a brick-and-mortar store adding an online presence and want to use the same payment processor for your storefront and your website, Stripe can be useful.

Stripe offers its own physical card readers. There are no free options available unlike PayPal, so you’ll have to pay for them.

PayPal

At some point, you may want to move all your data to another payment processor that is not Stripe or PayPal. This is known as Data Portability.

PayPal won’t give you this data if you try to switch processors, which can be a headache for many businesses.

For some people, it’s important to have the choice to be able to move their payment data if they want.  Check out our list of PayPal integrations for more information.

Online Invoicing

PayPal offers businesses customizable online invoicing, and unlike Stripe won’t bill you over $1 million, which is quite impressive to say the least.

Card Readers

PayPal has integrations into many popular Point of Sale systems, and both Stripe and PayPal offer their own physical card readers.

PayPal will give you free card readers and also has paid card readers you can buy, while Stripe only offers paid card readers.

5. Customer Support and Documentation

The true value of a service often shines through in moments of trouble, specifically when users need guidance or face issues.

Stripe

Stripe has several ways to get in touch when you have questions, including a help center, social media, and chat support channels (with support reps or developers), plus phone and email support.

Despite all these ways to get your questions answered, users still say that Stripe’s quality of customer service can vary from good to poor and is sometimes frustrating. Their documentation is quite sufficient though.

However, Stripe recently added 24/7 access to both phone and chat support to help customers through their queries. It has also added an option for paid Premium Support with extra features:

PayPal

PayPal has multiple ways to get answers to your questions from their customer support team, such as a community forum, help center, social media, email, live chat, and phone support.

However, unlike Stripe, which offers 24/7 chat and phone support, PayPal’s support still goes dark at some hours of the day. As far as documentation is concerned, PayPal is quite detailed.

You’ll easily find answers to most of your questions through comprehensive documentations and FAQ sections, but it may take some time to find a solution that fits your business needs.

6. Advantages and Disadvantages

Both Stripe and PayPal come with their own advantages and disadvantages; let’s talk about them in detail below to help guide your choice.

Stripe

It is safe to say that Stripe is a great payment solution for all sorts of businesses. When deciding to implement it on your website, consider these factors.

Advantages
  • 24/7 support
  • PCI Compliant
  • Nonprofit discounts
  • Lower chargeback fee ($15)
  • No contract required
  • Flat, predictable rates
  • Easy for your customers to use
  • Keep and move your customer data
  • Customers never leave your site during the buying cycle
  • Multiple support options (help center, phone, live chat, and email)
  • Developer live chat support for complex issues
Disadvantages
  • It isn’t as user-friendly to set up (The WPForms support team has you covered with this guide on how to install the Stripe Addon)
  • Not as well-known as a household name like PayPal
  • It takes longer to access your money (2-day average)
  • Online invoicing is only free until $1M in sales
  • Available in fewer countries than PayPal
  • No fees returned with refunds
  • Inconsistent support quality

PayPal

Since PayPal has been in the marketplace for a long time, it’s easily the most preferred option. However, if you want to decide if it’s the right fit for you, consider these factors:

Advantages

  • PCI Compliant
  • Nonprofit discounts
  • No contract required
  • Free online invoicing
  • Available in 200+ countries
  • Flat, predictable rates
  • Easy to setup an account
  • Easy for your customers to use
  • Free card readers for your storefront
  • Integrations with some POS systems if you want to sell in-person
  • Customers are familiar with and trust PayPal
  • Funds are available immediately in your PayPal account
  • Multiple support options (help center, phone, live chat and email)
Disadvantages
  • Redirects customers away from your website during the checkout process
  • Can’t move all your customer data to another payment processor
  • Higher chargeback fee ($20)
  • Inconsistent support quality
  • No fees returned with refunds
  • No Recurring Billing

Stripe vs PayPal: Which One Is Better?

So, which online payment gateway should you use? The answer depends on your business’ individual needs, including your industry, the type of customers you have, and what you’re planning to sell online.

One type of merchant may prefer to go with one payment solution over another. It’s also important to note that with WPForms, you don’t have to select just one payment solution to accept payments 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.

You Can Use Both with WPForms

To use both Stripe and PayPal, you’ll need to set up accounts with each company. This way, you can allow your visitors to select which one they want to use. Head over to our guide on how to allow users to choose a payment method to learn more.

If you do this, keep in mind that your funds will be deposited to your bank account separately, which could cause extra administrative work. If you’re using the two, you’ll be spending more time dealing with both Stripe and PayPal, so weigh all your options before deciding if this is the best route for you.

With the simplicity of WPForms, even non-technical people can create beautiful order forms that accept payments or donations right on their WordPress site with our pre-built donation and order form templates. You can easily let users choose if they want to pay through either Stripe or PayPal in your forms.

Accept Stripe + PayPal on Your Site Forms Now

FAQs about Stripe vs PayPal

We get a lot of questions about Stripe and PayPal from customers who want to accept payments from their forms. Check out some of our most commonly asked questions below.

Is Stripe or PayPal better for online payments?

If you’re a business owner, you know that you need a reliable payment gateway. Either payment gateway is good. PayPal is better known to consumers. Stripe, on the other hand, has a simpler pricing structure. Stripe’s tools and reporting are also stronger than PayPal’s.

Can I use Stripe and PayPal?

You can use Stripe and PayPal on your site at the same time. Businesses often use both payment gateways to give their customers more options.

Is Stripe or PayPal better for recurring payments and subscriptions?

If you want to offer subscriptions or the ability to make recurring payments or donations, you probably want to go with Stripe. This functionality is where Stripe shines, as it offers tools like customer and payment reports.

Do Stripe and PayPal have invoicing?

Stripe is the better option if you want invoicing. Its built-in features let you easily bill customers and track invoices.

How soon can I expect to receive funds?

With both Stripe and PayPal, you can typically expect to see funds arrive in 2-5 business days.

Final Thoughts

Both Stripe and PayPal offer great features and major flexibility. Ultimately, which payment gateway you choose depends on your business’ specific needs.

Accepting payments in WordPress is super simple with WPForms. You can also take a look at WP Simple Pay as an alternative option.

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Comments

  1. The information about PayPal refunds is not accurate – PayPal returns the percentage, but not the fixed fee. The article mentions the other way around.

    1. Hi Sergey!
      I wanted to let you know, that we have contacted PayPal to check this with them and currently edited this article.
      Thank you for reporting this!
      Have a good one 🙂

    2. Since March 2020 Paypal does NOT REFUND anything. They keep the fixed fee AND the percentage. This was a recent change.
      It was waived then until May 31 for COVID-19 help.

      Again now you are not refunded ANY fees from paypal, they keep ALL OF IT.

      1. Hey Bodo- Thank you so much for the great information! This is really helpful!

        Thanks and have a good one 🙂

  2. Iam going to start an online business on eBooks but I just have a quick question.

    If I use Paypal as the payment gateway on Kartra ( or any other similar click funnel) will customers be able to purchase the digital products with their Credit or Debit cards? or they only will be able to use their Paypal to buy the products?

    1. Hi Ehsan – In PayPal, as long as you have a business account you can give your customers the option to purchase with just a card (even if they don’t have a PayPal account). If you have any other questions about PayPal, Stripe, or purchase forms, please reach out to our support team — we’d be happy to help 🙂

  3. Say I want to start selling digital art and am not going to have a brick and mortar store. Will customers see my actual address with Stripe or PayPal? I can’t tell.

    1. Hey Sabrina, PayPal and Stripe both have a good amount of flexibility in terms of what info you want to show in your invoice. I have seen some digital goods companies using an email address on the invoice instead of a physical address. It might also depend on the country where you are situated and where your customers are. As most of the payment gateways like PayPal and Stripe have some specific regulations for each country, it would be best if you reach out to their support and confirm more info about it.

      Wish you all the best for you digital art site 🙂

  4. Hi,
    What if a person creates a Stripe or PayPal account and does not make a transaction for months. Will there be still any monthly charges?

    1. Hi Shahid!
      The user will be charged for it automatically once there are enough funds in their account. If a user wants to cancel their subscription, they can do this in their account anytime.
      I hope this helps.
      Have a good one 🙂

      1. Hey Steven – Thanks for chiming in and for the useful info. Would you mind providing some link on the Stripe website mentioning this info so that users can see the source of info for their reference?

        Thanks again for the details!

  5. One different for 501(c)3 nonprofits is that PayPal offers their nonprofit discount for all payments to the nonprofit, while with Stripe, at least 80% of payments to the nonprofit’s account must be donations (not tickets or tuition or memberships or anything else), or you get no nonprofit discount on any payment.

    1. Hey Steven – Thanks for such insights, could you please provide some source of this info, like a page link on Stripe, maybe we can update that in the article as well and users can see the good info with its source as well.

      Thanks!

  6. Be carefull, you are given FALSE Information on this website about micrpayment:
    Citation “If you’re 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% + .05¢ per transaction.”

    Stripe Micropayment is EXTREM bad solution.
    Details:
    a) The rate is 5% + 5 Cent, but only up to 5$ (not 10)
    +
    b) You will fall out of the “standard rate” when you switch to micropayment rate, that MEANS, that stripe will charge you RADAR FEES. The RADAR fees are applied to ALL your transactions(!), that means also transactions above 5$.
    RAdar fees are 5 Cent for EVERY credit-card check.

    THIS will become VERY expensive.
    First: The standard rate is no longer 5% + 5Cent, it is at least 5%+10Cent, or 2.5%+30 Cent (your normal rate will ALSO increse by 5 Cent)
    Second: RADAR is also charged for FAILED payments or DELCINED cards.

    I had days where I had NO PAYMENT at all, but I was charged like 0.20$ RADAR fees because 1-2 customers tried to pay with credit card and failed.

    STRIPE for MICROPAYMENT IS DANGEROUS! Their fees are very strange. AND Stripe is HIDING the RADAR fees (you do not see them with your normal transaction, there is an EXTRA form that just shows you a daily summary for RADAR fees) You will think that you are NOT CHARGED for RADAR, but at the end of the month you see maybe a 100$ missing!

    1. Hey Bodo – Thanks for the details, could you please provide some source link for this info? then maybe we can update the details in our article itself.

      Please let me know!

  7. Source for Micropayment fees with Stripe:

    Stripe Pricing:
    https://stripe.com/pricing

    It is VERY HARD to understand the stripe pricing because their rules are not clear, scroll to RADAR fees, see they are 5 Cent, see they are WAIVED for STANDARD accounts (2.9%+30 Cent). so normal you do not pay for RADAR.
    Understand: Micropayment is NON-Standard fee, that means: RADAR is no longer waived. Ok?
    That means:
    Standard RATE becomes 2.9%+35 Cent)
    Micropayment RATE = 5% + 10 Cent

    REALITY: You are charged RADAR MORE often than you have successfull transactions (Radar BLOCKS declined payments, but you PAY for every BLOCKING).
    In my case it was +6 Cent for Radar, not +5 Cent, because about 20% of all payments are BLOCKED or FAIL (also a WRONG INPUT from the Customer is a BLOCK and will cost you 5 Cent, for example if the customer types in a WRONG ZIP CODE first, you pay 5 CENT, then he types in the CORRECT ZIP code, you are charged 5 CENT again because these are 2 checks) – thats why about 20% of all payments first fail, then people re-try and only 5% or so fail… You understand?

    RAdar is very expensive because you also PAY it for every standard-transaction.

    I am a little bit pissed of by Stripes pricing. There is a way to work-around the radar fees for standard-rate of course – 2 accounts.

    1. Hey Bodo- Thank you so much for the detailed information on Stripe information! This is really helpful!

      Thanks and have a good one 🙂

  8. If someone pays through Stripe, and does not receive the package, does Stripe try to help the customer?

    1. Hey Carolyn -Thanks for reaching out!

      Regarding the package delivery and other services, I’d recommend you to get in touch with Stripe’s support and double-check 🙂

      I hope this helps!

  9. This article should be update to note that recurring billing, aka Stripe’s Billing (or Subscriptions), is no longer a free add-on. To use Stripe’s recurring billing features now costs an additional .5% per transaction. See: https://stripe.com/billing/pricing

    That said, I’ve been a Stripe customer for many years, and imo their recurring billing features are worth the +.5%

    1. Hey David — thanks for the heads up here! I’ve highlighted this to our blogging team and we’ll get that updated soon!

      Thanks again, and have a good one!! 🙂

  10. There are some things not mentioned here, against Paypal and in favor of Stripe.

    First of all, the Paypal claims (people asking for a refund) and the way decisions are made are very unclear with Paypal. This has cost me quite a bit of money over the past few years. Never with Stripe so far.

    Second… I receive money in different currencies on my Paypal account. USD, EUR etc. At Stripe I can have my money transferred to a Euro account, a USD account. Whatever I want. With Paypal I can only link an account in GBP (I have a UK LTD as a company). As a result, I have to have my USD and EUR converted to GBP by Paypal before I can transfer the money. After transferring the money, I have to convert the GBP back to EUR or USD.

    I understand that Paypal wants to make extra money by forcing you to convert your money at an unfavorable exchange rate. But all in all, the total costs for a Paypal payment are close to 10% for me. With Stripe less than 3%.

    1. Hi D! Thanks for sharing your insight and experience regarding PayPal and Stripe with us and our other users 🙂

  11. Is there a workaround in adding a government issue ID for non-profit organizations? Our CPA and Board of Directors feel this is a conflict of interest in that there is no owner of a non-profit.

    1. Hi Lesey, I’m sorry but I’m not sure I quite understand your question. Are you referring to the application form for a WPForms non-profit license? If this is the case, what we’re looking for is a document that verifies your organization’s non profit status, and are usually provided by either your tax agency or where your organization is registered.

      I hope this helps to clarify 🙂 If you have any further questions about this, please contact us.

  12. Could you compare and comment on their privacy policies also, please? It seems they have access to all your website searches once you subscribe for their services (according to the privacy policy statements of one of them).

    1. Hi S P! Thanks for your suggestion, we’ll make a note of this to our writing team for consideration 🙂

  13. All i want to know in NGO project :
    1. Which one is suitable for international transactions -(Stripe or paypal)
    2. (info )The receiving account is in India
    3. Is their a limit per transaction to send donations For ngo belongs to india ?
    Thanks
    Atin

    1. Hi Atin,

      Paypal can be a good option for International Transactions. Here is an article from PayPal regarding the cost for nonprofits and charities.

      Also, for more details, I would also recommend you to consult your respective bank on transactional fees.

      Hope this helps! 🙂

  14. How do I open a verified stripe account?

    I want my my business to go international

    I’m not in the US

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