PayPal and Stripe are popular online payment processing systems. Both the payment gateways make it easy for its users to receive and give out payments. PayPal was formed in the year 1998 and Stripe is a fairly recent company founded in 2011. Both have the same end goal of providing efficient service in digital payment across the globe. They act as a midway portal between the merchants and the financial institutions. Both Stripe and PayPal have collaborations with various credit card companies, banks, and other financial institutions. They offer not only a common platform or payments but also other financial services. However, there are some stark differences between the two which makes it worthwhile to know about those beforehand. The following are the features of Stripe and PayPal which makes the experience of using either, better: –
- Transaction Costs: PayPal usually charges 2.9% + 30¢ which is their fee for the USA for every transaction made. Now, the cost per transaction is the same as Stripe at 2.9% + 30¢. Moreover, when there is a total transaction of $80,000 or more every month, it offers a better affordable rate for the transaction and the same lowering of costs and charges takes place at PayPal with $3,000 worth of sales every month.
- Worldwide presence: PayPal is more popular and has a presence in about 200 countries across the globe. The reach of PayPal is far greater than Stripe which is present in around 32 countries in the world. Hence people have developed an affinity towards using PayPal simply because of its availability in numerous countries. Also, Stripe supports 135 different currencies in the world for easier and smooth international payment transactions facilitating international businesses.
- Micropayment Fee: Stripe takes around 5% + .05¢, with and an additional charge of .05¢ as RADAR fee for every attempt made. On the other hand, PayPal charges 5% + .05¢ for each micro-fund transaction.
- RADAR fee: A certain amount of fee is charged by Stripe called a RADAR fee, whenever anyone tries to attempt at processing a transaction. So even if the transaction fails, the RADAR fee is charged from the user. Only Standard accounts do not have this fee to be charged on them. On the other hand, PayPal does not have a fee like RADAR which makes it much more affordable for the user.
- Fund Transfer Time: The funds that have been transferred through Stripe takes an average of 2 days for it to complete the process and the amount appears in the user’s bank account. In PayPal, the average number of days required to transfer a fund to a user’s bank account is 2 to 4 days.
- Sending Invoice: Stripe makes and sends the user an appropriate invoice without any charges. Although an invoicing fee is charged when the $80,000 or more is the bill amount. Whereas PayPal caters to the same service of sending an invoice for free.
- Customer Support: A payment gateway’s essential service is the customer support to satiate the user’s queries and find a solution to a problem that they have experienced. PayPal’s customer support team can be reached by phone, the solution can be received through email and questions asked in the user’s forum. At Stripe in addition to all-day phone calls, email support, there is a new feature of solving problems through Chat support which has become more popular in recent days.
Hopefully, you’ve got an idea of which payment gateway is better for you, PayPal or Stripe. So which online payment portal are you supposed to use?
The answer depends on the specific needs of your business, including your industry, the kind of clients you have, and what you offer. That said, PayPal would be a quick option if you’re looking for an affordable, entry-level online payment gateway. Nevertheless, if you want an easy-to-customize, better online experience, then Stripe could beat out PayPal very well.