Stripe vs PayPal: Which Payment Gateway Should You Choose?

Stripe vs PayPal: Which Payment Gateway Should You Choose?

Stripe and PayPal are payment gateways that allow the customer to check out using a credit card, the most common and universal method of buying goods online. So Stripe vs PayPal? Stripe or PayPal? Let’s delve a bit on the difference between each.

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What is a Payment Gateway?

Simply put a payment gateway is the mechanism that a customer uses to pay for goods or services on your website. The actual location of the point of sale and the actual goods or service sold is flexible and inconsequential to the utility of either Stripe or PayPal, as both can be incorporated into website and physical POS system. The customer can cash out through the gateway or the seller can through the gateway account.

All of this means that the online world of digital money payments is a flexible as the imagination and knowledge of the seller. But which one is easier for the seller and more popular for the buyer? Both Stripe and PayPal are equally the most popular payment gateways used in digital marketing and ecommerce.

Is there a difference at all? Short answer no, long answer yes. Conclusion: give your customers both and let them decide.

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Stripe vs PayPal: Products and Services

Both Stripe and PayPal allow the customer to check out using a credit card, the most common and universal method of buying goods online.

However, Stripe allows for ACH payments and PayPal allows for payments from an online funded account.

In terms of Stripe vs PayPal, both have advantages and disadvantages.

Some customers may just want to check out without having to sign up for an account with PayPal but others with a funded account may just want to use up those funds instead of putting the charges on a credit card.

Both services offer receipts, invoices, and detailed purchase reports. There doesn’t seem to be any many major differences between the two products for services mainly because customers don’t want anything complicated. They just want to pay, and the seller just wants to be paid. Simple.

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Fees & Rates

Fees and rates can rack up and quickly. However, the easy answer to this comparison is that there is no difference between Stripe and PayPal for transaction costs. Both charge above what you would pay if you opened your own merchant account with a bank but that would mean you would need another 3rd party payment gateway, not Stripe or PayPal.

The only noticeable difference is that PayPal charges $20 for a chargeback while Stripe charges $15 per chargeback.

Though, if you are a reputable business there shouldn’t be any chargebacks, or at least a slight few.

Stripe vs PayPal

Ease of Use

Ease of use can be both from the perspective of the customer and from the perspective of the seller. Both offer complete simplicity for the customer.

There is no difference besides Stripe allowing the customer to checkout via the seller’s webpage and PayPal redirecting the customer to PayPal. Though this isn’t a determining factor.

The main difference is the ease of use from the perspective of the seller. PayPal is significantly easier to incorporate into a website either Magento or WordPress.

There are extensions specifically developed for this process.

The experts at CreativeMinds have great WordPress Plugins and Magento Extensions that can help with incorporating payments into your site simply and efficiently. Stripe, though, can be more difficult. Stripe was built for large corporate developers. The standard setup is easy enough.

However, where PayPal shines in copy/paste development: Stripe doesn’t offer premade development tools and requires the seller to code anything beyond the basic gateway.

Rest assured, most sellers don’t need anything beyond the basic gateway. So, this does not end up being a deciding factor.

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Contract Terms

Using either PayPal or Stripe means accepting their terms and conditions as a merchant aggregator.

What does this mean?

Well, this means that you as the seller are contracting for a portion of PayPal/Stripe’s merchant credit held by a major financial institute.

In short, you are renting a portion of their bank account for your own purposes and paying them with transaction fees. This means that both PayPal and Stripe have the contract authority to close your account and ban you from their service for any reason or no reason with no notice at any time and with no recourse.

Well, that sucks. Yes, yes it does.

Though it does happen; it doesn’t happen that much and as long as you are not selling fake goods to scammers in Nigeria you should be fine.

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Customer Service

Stripe vs PayPal? Stripe wins out here.

PayPal directs you to a knowledge library and asks to send an email that never gets answered all while making it very difficult to find an actual telephone number. Stripe went all in. They clearly state a help line to chat with a live person twenty-four hours a day. That is pretty great.

Will you use this at some point in time? Yes, you absolutely will. Get to know how to reach out to customer service representatives.

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It seems like we are at an impasse. Both services are generally the same.

The packaging and branding and customer loyalty varies greatly. But at the end of the day the actual products serve the same purpose and affect a solution with the same benefits and headaches.

So how do you choose? What do you do?

Why not use both?

There isn’t some unwritten rule that says you can’t use both. Lots of ecommerce stores offer multiple methods to check out, sometimes even more than two. This helps when customers are coming to your site from different countries.

PayPal is offered in over 200 countries, but Stripe is more limited, though more popular to use in those limited countries.

So, go ahead and use both. Give the power and flexibility to your customers and let them choose. The only extra work on your end is that you have two accounts from which to receive funds. Though would you say no to more sales just because it added an extra step?


How to Integrate Stripe and PayPal into your Website

Don’t stress over integration.

Work smarter not harder and buy a solution that was built by developers specifically to help with integrating payment gateways into websites. As stated earlier Stripe and PayPal are widely used and plugins and extensions are just as available. CreativeMinds has great resources for WordPress and Magento.