Starting an E-commerce website is exciting and challenging, there are lots of things to consider like which host should you be buying? What are the strategies you should choose to increase sales and business? Paypal and stripe are the payment processor used for transactions and they are the current best in the market. In this blog, we will converse about PayPal vs Stripe micropayments and will see which one is preferable. But nothing is more intimidating than, which payment processor should you use for secure financial transactions?
The introduction of payment processors in the market completely revolutionized and changed the paradigm of making transactions. For years, PayPal was at the top of the merchant, that is until Stripe was launched for general purchase in 2010. Stripe’s various enticing products and services made it extremely popular among users. This surge in popularity also made Stripe serve as a formidable alternative to PayPal.
The objective of this article is to provide you with the factors that set Paypal and Stripe apart from each other and which processor seems more preferable. You will have an idea that which one suits your business’ requirement better, PayPal or Stripe. Now, before we look into the factors that separate them, let us first understand what each of them is about.
PAYPAL vs STRIPE– STATITICS
Following are two payment merchants we will talk about in this article:
1. PayPal.
2. Stripe.
PayPal is an American company that operates a worldwide online payment system that supports the online transfers of money. It also acts as an electronic replacement for traditional methods of exchange like cheques and money orders. The company serves as a payment processor for various commercial users such as online vendors, auction sites, and many more. For these services, it charges a fee in exchange for benefits such as one-click transactions and password memory.
According to the datanyze which shows real-time technographic data, PayPal has 59.02% market share.
Stripe is a company that is based on technological features and advancements. Its software enables its users and businesses to make and receive payments over the internet. Stripe provides the technical, fraud prevention, and banking infrastructure that is important when it comes to operating online payment systems. A stripe is a premier option which helps you to earn more revenue, on-site checkout, streamlined checkout, easy setup, integrated refunds, and many more facilities.
According to the datanyze which shows real-time technographic data, Stripe has 20.53% market share.
Now, the following are the factors in every aspect of PayPal and Stripe that helps us in differentiating between them:
FEES FOR TRANSACTIONS
One of the first things that you consider before implementing new software to your business is the cost of it. Now, fortunately, both paypal and Stripe are free to use, well… the basic plans are at least. So, signing up is a pretty easy decision to make. You just need to type in the account details and get started. You do not have to compare Stripe fees vs paypal fees. There’s absolutely nothing that you will need to pay to initiate any services. There are no monthly fees that will be assessed or any of that sort of prerequisites.
However, there are fee structures to determine the process of calculating your fees of transactions when you start accepting the payments from your customers. For most of the part, the pricing is pretty much the same for both platforms.
IN THE CASE OF PAYPAL:
It goes into a more detailed breakdown of fees that are based on factors like:
- Whether the payments are larger or they are micropayments.
- If the payment is taking place within the U.S. or if it is taking place on an international scale.
- Can the Virtual Terminal accept the payments over the phone or not.
- Whether the payment is profit or non-profit.
- If the transaction is being operated online, through mobile or in-store.
- Transactions being made for a mobile card reader.
- Conversion of currency.
- Bills that keep recurring.
- Payments made by an American Express card
- If refunds are being initiated.
IN THE CASE OF STRIPE:
On the contrary, the structure of stripe’s fees is much more simplified. Other than that, the standard fee is charged per transaction. Stripe has fees that are associated with:
- Handling disputes of payments that are processing.
- Processing payments of international credit cards.
- Billing services.
- Conversion of currencies.
Verdict: In this aspect, when comparing Stripe versus PayPal, Stripe might seem to be a bit more preferable, as the various factors for which the fees are charged is simpler.
Hosting
Hosting is one of the important things that help you to decide which payment processor you should go for. It will help you to pick the one that makes the perfect fit for your requirements.
IN THE CASE OF PAYPAL:
Its pricing schemes provide its customers with three options to pick from:
The Payments Standard option enables you to set up a Payflow payment gateway Link on your website. This means that PayPal still identifies and manages it.
The Payments Pro of payment gives an option to host a checkout page from your website. This can be done with the help of the Payflow Pro payment gateway.
The Express Checkout option positions a button on your website. This button then redirects the customers to PayPal. This way they can finish the ongoing purchase.
IN THE CASE OF STRIPE:
It only has one option…
- The checkout process is placed on your website. However, Stripe securely takes care of the transactions on its own.
- You also have the option of customizing the overall appearance. You can change it in a way that it matches your brand.
SOPHISTICATED OPTIONS OF BILLING
This is one of those aspects where the type of business you run will surely influence the decision taken by you.
IN THE CASE OF PAYPAL:
It isn’t in the business only to help companies accept one-time payments online. It also offers various other options, as well:
- Subscriptions: You can use paypal to create recurring and automated payments.
- Marketplace Compatibility: Websites which involve multiple groups in the process of generating transactions would really enjoy paypal for Marketplaces as a solution.
- Invoicing: You can use paypal to create and send invoices to customers. This option is extremely helpful for those who offer freelance services that differ in price, from month to month.
- Multichannel: Payments can be accepted using paypal. Either you can use a mobile app or do it in store or by phone. As usual, mobile and in-store options require that you purchase extra hardware and sign up for paypal. Purchasing by phone is also levied with additional fees. This would be a nice feature to have if your business expands beyond the boundaries of your website.
IN THE CASE OF STRIPE:
It is exclusively focused on e-commerce, so any options for mobile chip readers or integration of POS is not available.
STRIPE DOES OFFER OTHER TYPES OF ADVANCED BILLING OPTIONS
- Mobile: Stripe leaves no stones unturned when it comes to helping its customers accept payments from both mobile apps and websites. Stripe offers UI components that speed up the payment workflow for mobile. Of course, it’s your choice whether you would like to customize or not, but the option to speed up this process is there.
- Invoicing: You can do a lot of unique things with Stripe Billing which is brand new as well. You will be able to accept payments from the full list of providers Stripe works with. You can also completely customize your invoices and create different types. Then, you can choose whether or not, you want them to be a one-time thing. You can also set them to recur automatically. Just keep in mind that billing over $1 million will be levied with additional transaction fees.
- Subscriptions: If you are building a business based on recurring revenue or running a program based on membership or subscription, then Stripe can help your website. You can automate and schedule these types of payments. Stripe also offers features like:
- Contacting credit card companies when a credit card is about to expire in order to procure new information.
- Management for adding new customers, changing subscription details, and handling cancellations are easier.
- Stripe Connect: Stripe has a solution for the marketplace as well. However, you have a choice of configuration. You must decide between whether you want the transactions to take place on a one-to-one basis or one-to-many basis or even many-to-many. Stripe will also help you in accounting for more complicated issues that are introduced with these transactions, like international fees, taxes, and transmission licenses.
Verdict: In this aspect, it’s a tie as both the processors are able to provide you with great services.
CUSTOMER SUPPORT AND MAINTENANCE
When your business is on the verge of a meltdown, you require a payment that can provide immediate support.
IN THE CASE OF PAYPAL:
Its reputation isn’t currently beating or matching Stripe’s level of customer support. Currently, their available channels for support include phone support you can present a query in their forum, or via email. While they do offer a forum in which community members can be available at any time, it’s just not the same thing as receiving official support. This is something they acknowledge in a disclaimer out of the gate when you navigate to the community page. Therefore, the information provided there is not coming from the most reliable source. Their phone support hours also aren’t comparable to Stripe’s 24/7 support.
IN THE CASE OF STRIPE:
They have now started offering 24/7 support through phone and live chat. This has created a great reputation for Stripe among the online community. Based on the data provided by Invesp and various other websites, 73% of customers are more satisfied with live chat.
Verdict: In this aspect, Stripe would be a more preferable option if it’s top notch customer support you are looking for.
SETTING UP
IN THE CASE OF PAYPAL:
Getting up and running with paypal is incredibly simple. All you need to do is copy and paste a few lines of code on your website. Once that is complete, you’ll see the instantly recognizable “Buy It Now” button which will allow you to start trading.
IN THE CASE OF STRIPE:
Unless you are in contact with a web developer, or possess technical knowledge yourself, setting up Stripe can be tricky. This is a payment processor that has been built specifically for developers. If you are not one, you might have a tough time in navigating the lines of code that come with installing Stripe as the payment processor of your choice.
Verdict: In this aspect, paypal would be a more appealing choice as it is quite easy to set up.
THIRD PARTY INTEGRATIONS
IN THE CASE OF PAYPAL:
If you are looking for a simple payment processing solution, paypal’s minimal integrations might be that solution that you are looking for. To be Specific, paypal integrates with platforms like:
- WooCommerce
- QuickBooks
- Salesforce
- E-commerce
- accounting
- CRM
Most of the time, that is really all that some businesses may need.
IN THE CASE OF STRIPE:
This payment processor goes way above and beyond when it comes to its integrations. It has entire categories that are dedicated to:
-
- CRM
- Customer Support
- eCommerce
- Email Marketing
- Form Building
- Fundraising
- Inventory Management
- Recurring Payments
- Referral Marketing
Verdict: In this aspect Stripe would be a more preferable option.
ACCEPTED PAYMENT TYPES
This is one of the most important factors in deciding which payment processing option is suitable for you.
IN THE CASE OF PAYPAL:
paypal accepts these payments methods:
- paypal
- paypal Credit
- Credit cards
- Debit cards
- Pay by phone
IN THE CASE OF STRIPE:
Stripe offers a wider range of payment method options:
- Credit cards
- Debit cards
- International cards
- AmEx Checkout
- Masterpass by MasterCard
- Visa Checkout
- WeChat Pay
- AliPay
- Apple Pay
- Google Pay
- ACH credit and debit
- SEPA direct debit
And many more.
Verdict: In this aspect, Stripe is the clear winner. You should go for Stripe if you do not want any restrictions in types of payment methods.
COUNTRIES AND CURRENCIES
If you want to expand your business in different countries then you need a payment processor that supports different countries and currencies.
IN THE CASE OF PAYPAL:
- This payment processor supports more than 200 different countries.
- Paypal can process payments in only 25 currencies.
IN THE CASE OF STRIPE:
- This payment processing option supports a total of 25 countries.
- With Stripe you can accept payment in more than 135 different currencies.
Verdict: In this prospect, there is a tie between paypal and Stripe. Both of them have their own advantages and disadvantages.
RECEIVING PAYMENTS
Neither Stripe nor PayPal has a prerequisite for its customers to have a merchant account. All you need to have is a bank account that is active so that you can connect to the platform.
IN THE CASE OF PAYPAL:
When using PayPal payments will be usually transferred to you within one business day. So, there is not that much of a wait time. PayPal can also deposit payments into a debit card, but you will need to pay a fee for those transfers.
IN THE CASE OF STRIPE:
When using Stripe, it can take about two days for you to get your payments transferred. You can also make the process automated and have Stripe deposit funds into your account on a weekly or monthly schedule.
Verdict: this aspect, it is mainly a tie unless you consider a one-day early transfer an advantage. In that case, paypal would be a more preferable option.
SECURITY
Security is the top most priority of every business. It becomes more important when you are running a website for your online store. When you accept payment, you also become responsible for keeping your customers’ data secured.
IN THE CASE OF PAYPAL:
PayPal is secured and encrypted so you can remain assured about the security of your users. This payment processor follows all the appropriate security protocols like two-factor verification etc.
IN THE CASE OF STRIPE:
If you are using Stripe from processing your payments then there is no need to keep any financial data of the customer stored on the servers. There is absolutely no need to store a token back to that data.
Verdict: Although both the options are very much secure when it comes to keeping the data protected. Both the payment processors are compliant with the international security standards. But when it comes to picking one of them then you should definitely go for Stripe.
USER-FRIENDLINESS
No matter how many features it has but the popularity of any payment processor depends on its user-friendliness. The more user-friendly it is, the more popular it can become among the users.
IN THE CASE OF PAYPAL:
If you pick PayPal then it leaves you with almost no requirement of putting any extra effort. All you have to do is register your account. Then you will have to choose the payment method you want to use. And this is it, you are all sorted!
IN THE CASE OF STRIPE:
On the other hand, Stripe is a little bit difficult to use if you are not a tech-savvy person. It was originally developed while keeping developers in mind. Although this payment processor comes with extensive documentation and third party integration. But you will need technical knowledge to make the most out of this payment processor.
Verdict: Although both the payment processors offer tons of amazing features, Stripe is a little bit complicated to be used by someone who is not a developer. If you want ease of use to be your priority then you should definitely go for PayPal.
GAINING ACCESS TO PAYMENTS
If you are running two payment processors and analyzing two sets of transactional data, it can be an overwhelming task. It can be even more tedious for micro or small business owners. This is where a data consultation app can be of great help. It presents you with all the must-know information into one easy-to-use dashboard. I will ensure that you are in complete control of your venture at all times.
IN THE CASE OF PAYPAL:
It keeps the transactions of your business separate, which acts as a benefit. Also, paypal offers name recognition. paypal allows its merchants to gain access to their funds within 3-4 days. The waiting period for paypal can be a bit frustrating, especially when you are running a business.
Running two payment processors can be deemed as very beneficial when it comes to transaction fees. For instance, let’s say that your customers are making an international payment or making a payment via American Express. If you explain to them that using Stripe would be a better option, you could save up your business money in the long run.
IN THE CASE OF STRIPE:
Stripe enables its users in the US to gain access to payments on a two-day rolling basis. On a global scale, countries usually have a rolling transfer schedule that takes 7 days. You can also incorporate an automatic deposit into your bank account.
Verdict: In this aspect, you can consider it a tie. There is one simple reason for that. Both the payment processors have dueling nature.
CONCLUSION:
AND THAT PRETTY MUCH SUMS UP THE CASE OF WHICH PROCESSOR IS BETTER, PAYPAL OR STRIPE?
All set to start your online store? If yes then you will definitely require a good payment processing option to handle your transaction. It makes the process of purchasing your products or services much easier for the users. The payment processor works as a mediator between your bank and your customer’s bank. The role of a payment processor also includes taking care of security measures. It will detect any kind of fraudulent activities and take corrective measures to stop that.
By now you must have come across many different names. But only two names must have popped out. These two names are paypal and Stripe. Both of these payment processors have their own advantages and disadvantages. To get a clear picture of things, you need to do a detailed comparison of Stripe vs paypal.
In the above article, we have compared these two payment processors on the basis of different factors. This will help you to decide which one makes a perfect fit for your business.
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