Stripe vs Paypal

May 14, 2023

Knowing the differences between Stripe vs PayPal is key to choosing the best payment processor. With many credit card processing services on the market today, finding the right one can be daunting. Each company operates in different countries, offers unique services, and sells various products made to work with their own devices.

Stripe Account vs PayPal Account

There are several payment processing businesses to choose from. But for this article, we will match up two of the larger aggregate companies that do not offer high risk merchant accounts – Stripe vs PayPal.

Stripe vs PayPal: Payment Processing Solutions

There are so many factors to consider when choosing the best credit card processor for your online store. But in order to accept debit cards, process credit card transactions, or accept recurring monthly payments, your small business will need a reliable virtual terminal.

Online Fees and Charges Comparison

Payment Processor LogoStripe LogoPayPal Logo
Setup FeeFreeFree
Monthly FeeNoneNone
Transaction Fee2.9% + $0.30 per transaction2.9% + $0.30 per transaction
Currency Conversion FeeAdditional 1% fee2.5% added to the exchange rate
RefundsNo feeReturns the 2.9% fee, but not the $0.30 fee
3D Secure AuthenticationIncluded ($0.03 per 3D Secure attempt for accounts with custom pricing)Included

Stripe vs PayPal: Card Payment Options

When a customer makes a credit card payment in-person, the transaction is very secure. In comparison, online credit card payments are more susceptible to fraud or other security issues.  Because of this, the transaction fee is greater.

Card present transactions are a relatively form of payment to receive as a business. There is less risk involved in card-present transactions because the card owner is physically in attendance for the transaction, therefore eliminating inherent risks that otherwise would occur online.

Card Present Transactions Differences

Point of Sale Product ImageStripe Card ReaderPayPal Card Readers
Card Reader$59 for the BBPOS Chipper 2X BT- $24.99 for Chip and Swipe Reader
- $79.99 for Chip and Tap + Charging Stand
Card Present Transaction Fee2.7% + $0.05 per transaction2.7% per US card swipe
Terminal$299 for the Verifone P400- $129.00 for Heckler Design Windfall Stand
- $189.90 for Studio Proper Swivel Stand
Monthly FeesNoneNone
Cards and Digital Wallets AcceptedVISA, Mastercard, Maestro, American Express, Discover, JCB, Apple Pay, G PayVISA, Mastercard, Discover, American Express, JCB, Diner's Club, EnRoute
International Payments+1% per transaction+1.5% per transaction

Stripe vs PayPal Account

Stripe Credit Card Processing

Stripe payment processing has proven to be a good choice for online merchants whose checkout experience is conducted on the internet.

The company is based in Ireland but operates in over 25 different countries. Large businesses, startup companies, and private individuals can use their service to accept payments online via a digital shopping cart. Stripe has grown to be one of the larger players in the payment methods industry.

Stripe Payment Gateway

Reliable payment gateway integration is essential for any processing company. As mandated by the Payment Card Industry Security Standards Council, both Stripe and PayPal are PCI compliant.

Accepting payments securely by following federal regulation and adhering to PCI compliance is an essential characteristic of legitimate, established payment gateways. Overall, Stripe offers reliable payment processing for any size merchant looking to accept credit card payments online.

Stripe Sigma: Business Insights

A unique quality to Stripe’s business services is the integration of Stripe Sigma. This payment processing transaction data analysis tool allows businesses to find new opportunities and run their company more efficiently.

Some additional features to Stripe Sigma include:

  • Location data to determine what impacts the most revenue
  • Increased ease and accessibility to run payment reports directly
  • Ability to identify which customers will stay with your company or leave during the year
  • View the products or services that are most popular within a given month

PayPal Merchant Account

Stripe vs PayPal Merchant

A PayPal merchant account is a robust payment processing solution for growing startup businesses. It allows your online customers to make secure and quick transactions through your website. This gives you the freedom to sell products with a trusted payment provider.

PayPal founded in 1999, is a general ecommerce payment tool. Their platform is designed to cover a number of business needs, but still has a few limitations you should be aware of. According to the Terms and Conditions, there are certain high risk industries they will not allow on their platform.

PayPal Transaction Fees

When choosing to set up your merchant account through PayPal, make sure to consider if your company is considered high risk. Otherwise, PayPal can freeze your merchant account, and you may not have the ability to process payments on your website until you find another provider. 

Once you’ve determined you qualify for PayPal payment processing, then you’ll want to familiarize yourself with all of the respective fees associated with this resource. As a main competitor in the merchant account space, they try to match fees with other large scale companies. You can compare the transaction costs with a Stripe merchant account in the processing fee comparisons above.

PayPal Pay in 4

This new feature of PayPal allows their customers to choose an alternative payment method in the form of installments. PayPal is available to divide your payment into four separate payments – one payment every two weeks. Pay in 4 is also provided at no additional cost and is interest free.

Stripe vs PayPal CryptoPayPal Crypto

Now, using the PayPal app, you can discover, buy, and sell different cryptocurrencies. PayPal Crypto is managed right in your PayPal Wallet and has the same protections as regular PayPay accounts.

Currently, PayPay Crypto it is only available in the United States and is even limited in certain states. Cryptocurrency prices change every minute since the crypto financial market runs 24/7, 365 days a year. It’s the only financial market that never sleeps.

You can purchase the following kinds of crypto coins through PayPal starting as low as $1:

  • Bitcoin
  • Litecoin
  • Ethereum
  • Bitcoin Cash

PayPal Merchant ID

A PayPal Merchant ID is the identification number of your account for your business. Much like a social security number for an individual, this number is the personal identity of your payment processing account for your company. It’s essential for sharing fiscal growth metrics for tax statements or other financial entities.

PayPal Limitations

More than a bank, PayPal is a multi-purpose company that can help you grow your company over time. However, as your business scales, it’s important to consider your options when it comes to lowering your costs.

As you start producing more sales volume, you’ll have the ability to leverage your growth to reduce rates. Be sure to seek at alternative payment providers who can lower your processing fees so you can save critical revenue in your growing business.

Stripe vs PayPal Payments

High Risk Merchant Solutions

Many business owners pursue their dreams of owning a successful company not being aware that there are many business types classified as high risk. And as a company that is classified as high risk, you must be aware of the hurdles, processes, and stipulations related to payment processing.

If you don’t, you can get shut down by the acquiring bank. This is the last situation you want to be in as a high risk business. So how do you ensure that you keep processing payments and increase revenue?

Before covering the details of high risk credit card processing, it is important to understand what factors contribute to determining if a business is classified as one.

The factors below are indicators that your company may be high risk:

  • The individual registering the business has a bad credit score
  • Products and services sold are large ticket transactions
  • There is a high amount of returns and chargebacks
  • The bank considers your company having a reputational risk
  • You use a recurring billing model for monthly and subscription-based sales
  • Processing is for card-not-present transactions
  • The merchant is in a highly-regulated industry

Do one or more of the above indicators describe your company? If so, it’s likely your business falls into the high risk category. In this case, it is essential to find a payment processor other than Stripe and PayPal, like PayKings, who specialize in providing sustainable high risk merchant accounts.

author avatar
Guest Post

May 14, 2023 | Merchants | Guest Post