Stripe vs PayPal

For quite a long time, PayPal has been the king of merchant and payment services. PayPal has made it incredibly easy for people to complete both online and in-store transactions. However, there are now some other options available in the market, and one Stripe is one of the most popular options. Stripe offers a variety of unique benefits, such as the superior API and data portability. In the following article, we will see the comparisons between Stripe vs PayPal to help you determine the best transaction solution for your business.

Transaction Fees
The first thing that people usually compare when choosing a transaction service is the transaction fee. After all, such fee is going to directly add to the total cost of each transaction. We all want to keep our expenses low; if your spend more, make sure that you actually get more benefits.

In the United States, Stripe and PayPal both charge the same basic fee on each successful transaction, which is 2.9% + 30c. Note that the fees may vary in different countries. But, in most cases, Stripe and PayPal have similar transaction fees. Neither of them charges any fee on failed transactions and refunds.

The differences between Stripe vs PayPal become more apparent on the features and micropayments. Stripe is very interesting because it does not charge any fee on American Express’s major cards and international cards. In addition, Stripe accepts Apple Pay, Android Pay, and Bitcoin. There is a chargeback fee of $15. On the other hand, PayPal charges a 3.5% fee on American Express cards and a 3.9% fee on international cards, and there is a chargeback fee of $20.

For micropayments, Stripe charges the same basic fees. PayPal is perhaps better for a business running a high volume of low-cost sales because it offers a lower fee for a transaction under $10. It charges 0.5% + 5c on each transaction under $10.

Ease of Use and Setup
When choosing between Stripe vs PayPal, you may need to consider whether you prefer a highly customizable service or something that can be set up quickly and easily. Stripe is the former, whereas PayPal is the latter.

Stripe has a nice benefit for users in the United States. It allows the users to access their payments on a two-day rolling basis. Meanwhile, for users in international countries, it provides a seven-day rolling transfer schedule. Note that Stripe is more suitable if you have some programming knowledge – or if you don’t mind hiring a developer to integrate it to your business.

Most people are able to set up the basics by themselves, but things become a lot more complicated when you need something that is more than just a basic e-commerce website.Stripe has the “Pay with card” button to allow customers complete transactions easily, but you need to create the necessary coding framework in order to integrate it to your website.

For developers, Stripe is a great choice that is highly customizable. But for people with little to no programming knowledge, Stripe is a real hassle.

On the other hand, PayPal may feel slower because it only allows merchants to access their funds within 3 – 4 days. Still, there is one distinctive benefit of PayPal, which is the world-wide recognition. PayPal is well-known all over the world. When a customer is redirected to PayPal’s website to complete a transaction, they will not feel any worry at all. Additionally, PayPal is able to keep private and business transactions separate.

PayPal is designed to allow business owners to set up their transaction points as easily as possible. It does have some programming tools for developers, but you can also set it up yourself without complicated coding. For example, PayPal’s “Buy it now” button is very easy and simple to integrate. All you have to do is copy the corresponding code and paste that code in your website.

For sure, transaction services like Stripe and PayPal take security very seriously. Essentially, they are both stable and secure. However, there are some distinctive features that set them apart in terms of security.

Stripe is intrinsically encouraging good security. Stripe’s killer feature is Stripe.js. By using Stripe.js on your website, every credit card data that is entered into your payment form is not sent to your server; instead, it is sent to Stripe directly. This is automatically compliant to the Payment Card Industry’s Data Security Standard (PCI DSS), as you don’t handle sensitive credit card data. This is more secure because a breach to your server will not result in stolen credit card data.

On the other hand, PayPal now has a similar feature to store sensitive credit card data in a dedicated vault, but it is not very similar to Stripe.js. It still requires the data to go through your server first. It is a big security burden, as it makes room for bad decisions on the developer’s side.

API and Data Portability
Stripe is the clear winner when it comes to the API and data portability. When Stripe was first launched, the Stripe API created a huge difference which encouraged other competitors to improve their APIs’ quality. The Stripe API is clean, neat, and well documented. It is very easy to use.

The old PayPal API was probably one of the worst offenders, ever. The old API was inconsistent, buggy, and poorly documented. However, PayPal’s new API has been greatly improved. It is now clean and properly documented. Still, it isn’t as great as Stripe’s API.

Data portability is a big difference between Stripe vs PayPal. Unlike some other competitors, Stripe does provide data portability. If you decide to leave Stripe in the future, Stripe does provide a way to migrate your data in a secure PCI-compliant way. It is a big relief to know that you are not going to be locked in forever.

On the other hand, PayPal does not provide any easy way to migrate your data. If you have amassed a lot of loyal customers by using PayPal subscriptions, you won’t be able to transfer the data to another service (for example, Stripe). Your existing customers will have to sign up again if you decide to change your transaction service.

Customer Service
Stripe offers several ways whenever you need customer support. They provide email support and an IRC channel where developers can chat and get live help. This is a big advantage. Stripe does not have phone support yet, but it may be added in the future.

On the other hand, PayPal provides customer support via email and phone. However, both the email and phone lines are slow and almost unreliable. When you are lucky, you can get a response within a few days. Otherwise, it may take months. This is apparently due to PayPal’s scale and age. After all, PayPal holds most of the market share, so they need to deal with a lot more users and customers all around the world.

- No additional fee for American Express’s and international cards, accepts Apple Pay, Android Pay, and Bitcoin- Has a lower transaction fee for micropayments under $10
- More difficult to integrate, may need a developer- Easy and simple to use for people with little to no programming background
- Stripe.js provides good and PCI-compliant security- Has more security burden as sensitive data go through your server
- Excellent API and data portability- The API has improved, but data is not portable
- Email support and live IRC channel- Email and phone support

PayPal is a good choice if you prefer something simple and easy to set up. You may also want to choose PayPal if you can benefit from the world-wide recognition. PayPal is especially great for micropayments due to the lower fee for transactions under $10. However, if you have programming skills or if you don’t mind hiring a developer, Stripe is a better choice. Stripe is more customizable, and it encourages good security through Stripe.js. In addition, Stripe has a better API, good data portability, and a live chat channel.

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