Key takeaways
Online shopping remains popular and is projected to grow 10.5% by the end of 2024, according to eMarketer. With this in mind, ecommerce websites should maintain great visibility and provide an excellent buyer’s journey to stand out. Stripe vs PayPal is a common topic among payment experts recommending the best online checkout service providers.
While Stripe and PayPal share many similarities, there are also key differences that make each provider a better fit for certain business types. This guide explores PayPal vs Stripe features to help you learn more.If you are looking for a more rounded payment and point of sale (POS) solution, check out our top recommendations for POS systems instead.
Stripe: Best for growing ecommerce businesses
Pros
Cons
Our Rating: 4.53/5
Stripe is a leading online payment services provider that offers a wide range of payment tools and advanced customization features. With a free merchant account and simple checkout set up options, Stripe is a popular choice for startups. However, it is Stripe’s ability to provide highly customized features, from checkout pages to payment security, that makes it a standout among growing businesses. Stripe integrates with hundreds of third-party applications and platform extensions, to create a fully customized ecommerce store.
Payment methods
Stripe supports most types of payment services including E-wallets, cross border payments, Level 2 and 3 data processing for B2Bs, nonprofits, cryptocurrency, and even PayPal. Stripe supports local payment methods in 47 countries and integrates with various peer-to-peer and Buy Now, Pay later (BNPL) services.
Custom checkouts
Stripe’s rich resources for designing custom online checkouts is popular among online and in-person business owners. The system offers both no-code and coding-required customizations for all business types.
Payment security
Stripe is well-known for its suite of payment security features. It allows users to fine-tune the built-in fraud monitoring and detection tools to their acceptable risk levels. Stripe checkouts can also be embedded with additional verification features, such as biometrics, to detect unusual transactions.
Integrations
Stripe has 660 third party integrations and 450 platform extensions, all to create as much customization as a user needs to run a business efficiently. Integrations also include compatibility with various ecommerce platforms and marketplaces.
Pricing: 4.25/5
Hardware: 4/5
Payment Software: 4.79/5
Support and Reliability: 4.58/5
User Experience: 5/5
User Scores: 4.53/5
PayPal: Best for startups and freelancers
Pros
Cons
Our Rating: 4.12/5
PayPal is a pioneer of online peer-to-peer payments and eventually developed a merchant service for businesses. While not perfect, customers know and have come to trust PayPal over the decades, making it easier for businesses to sell on their websites if they have a PayPal checkout option. Like Stripe, PayPal is compatible with most ecommerce platforms, easy to integrate, and offers a wide range of payment methods. However, PayPal is more well-known for its ease of use and micropayment options.
Payment methods
PayPal supports all types of credit card payment services, including invoicing, cross border, digital wallets, and virtual terminals. It also allows businesses to accept cryptocurrency payments, BNPL, and Venmo (for US merchants).
Custom checkouts
PayPal offers easy checkout customization tools and developer resources for advanced features. On top of these, PayPal also has a product called PayPal Checkout which can be integrated in ecommerce websites to provide customers with the option to make payments using their personal PayPal account.
Payment security
PayPal uses Transport Layer Security (TLS) and machine-learning fraud detection technology to protect PayPal transactions. Advanced risk monitoring tools are also available with an enterprise plan.
Integrations
PayPal lists hundreds of third-party integrations for ecommerce, accounting, nonprofits, and other various tools business operations. PayPal can also be integrated with a number of POS software to allow customers the ability to pay for in-person purchases with their PayPal account.
Pricing: 4.25/5
Hardware: 4/5
Payment Software: 4.17/5
Support and Reliability: 3.33/5
User Experience: 4.38/5
User Scores: 4.60/5Not sure Stripe or PayPal is right for you? Check out our comprehensive POS Buyer’s Guide for more options.
How are Stripe and PayPal different?
| Feature | Stripe | PayPal |
|---|---|---|
| Software type | Payments | Payments and POS |
| Fee structure | Flat rate | Flat rate |
| Add-on products | Payments Revenue & finance automation Banking as a service | Payments Business operations Financial services |
| POS integration | Custom software/app development Server-driven integration | Integrates w/ some POS systems Proprietary POS |
| Bank funding speed | 2 business days, first deposit takes up to 14 days | 3 business days (Instant access to funds in PayPal balance) |
On paper, Stripe and PayPal seem to be quite similar in terms of payment services and customization features. However, a closer look shows how each provider is uniquely positioned to cater to slightly different business types.
Stripe’s strongest suit is its customization features that offer near-endless possibilities for growing a business from the ground up. The system offers both no-code and developer customizations to fit the needs of all business sizes. These customizations also extend to fraud monitoring, security, and chargeback management tools.
PayPal also has its own set of simple and developer-centric customizations. Although PayPal’s functionalities are not as feature-rich as Stripe’s, PayPal has the advantage of having its own set of checkout services. The PayPal checkout, with the PayPal branding, is trusted by most online consumers. It is accessible to all business sizes and can be customized to include alternative payment methods.
Expanding into in-person payments via POS integrations is an important factor in growing an ecommerce business. Stripe and PayPal differ significantly in this, which, again, focuses on how integrations are managed.
PayPal has a free mobile POS app (PayPal Zettle) and also offers ready integration with a number of POS software such as Hike and Clover. Stripe, meanwhile, requires coding to integrate with POS software or create a custom app to work with a POS hardware.
Stripe vs PayPal: Pricing
| Stripe | PayPal | |
|---|---|---|
| Monthly account fee | $0–$10 | $0–$30 |
| Online transaction fee | 2.9% + $0.30 | 2.59% + $0.49 to 3.49% + $0.49 |
| Cross border fee | 1.5% | 1.5% |
| ACH/E-checks | 0.8%, $5 cap (ACH) | 3.49% + 49 cents, $300 cap (E-check) |
| Discount for nonprofits | ✓ | ✓ |
| Available upgrades | ✓ | ✓ |
| Same-day funding | 1% | 1.5% |
| Chargeback fee | $15 (refundable) | $20 (for guest checkouts) |
| Volume discounts | > $250,000/year | N/A |
One particular downside of PayPal is its complicated pricing scheme, which sometimes makes it difficult to compare with alternatives like Stripe. Both providers offer a free forever plan, which means businesses on a budget can start and continue accepting payments, paying only for transaction fees every month.
However, businesses will have to pay Stripe an additional $10/month if they prefer a custom domain for their checkout page (so their customers are not redirected to the Stripe-branded site to complete payment). Stripe also charges an additional + 0.4%–0.8% per transaction for invoicing and recurring payments.
Meanwhile, PayPal charges less in online transaction fees. However, businesses will have to pay an extra $30 if they intend to use the virtual terminal service (to accept payments over the phone). It’s also possible to add a third-party payment processor while using PayPal’s payment gateway to accept payments for an additional $25/per month.
Both Stripe and PayPal offer flat-rate transaction pricing, but only Stripe offers discounted custom rates for businesses that process more than $250,000/year. This again highlights Stripe as the better option for growing businesses.
Stripe vs PayPal: Online payment services
| Payment Types | Stripe | PayPal |
|---|---|---|
| Credit/Debit cards | ✓ | ✓ |
| Digital wallets | ✓ | ✓ |
| One-click | ✓ | ✓ |
| ACH/E-check | ACH | E-check |
| Invoicing/Recurring billing | ✓ | ✓ |
| International | ✓ | ✓ |
| Local payment methods | Requires coding | Requires coding |
| Virtual terminal | Limited | ✓ |
| Level 2 and 3 (for B2Bs) | Requires coding | Upgrade to Braintree |
| HIPAA compliance (healthcare) | ✗ | ✗ |
| Microtransactions | With integration | ✓ |
| BNPL | With integration | ✓ |
| Cryptocurrency | ✓ | ✓ |
| CBD | ✗ | ✗ |
PayPal has a slight edge over Stripe in terms of online payment services, primarily because PayPal requires little integration to support its payment methods. Unlike Stripe, PayPal offers its own BNPL platform, Pay in 4, and peer-to-peer payment app, Venmo. Accepting micro payments with PayPal is also readily available while this will require some coding to use on Stripe.
While Stripe may not be the easiest to set up, it does offer a lot of room for a more personalized payment solution for businesses. For instance, with developer tools, Stripe can support Level 2 and 3 data processing for B2B businesses to get better transaction rates. Using Stripe also means businesses can choose their preferred BNPL service and cryptocurrency wallet instead of just working exclusively with one.
Stripe vs PayPal: Customizations
| Stripe | PayPal | |
|---|---|---|
| Payments | Excellent | Great |
| Security | Excellent | Good |
| Reporting & Analytics | Excellent | Good |
| Options | Code-free Developer setup Integrations |
Code-free Developer setup Integrations |
Stripe’s customization features are, hands down, the better option compared to PayPal. With advanced coding, Stripe can be designed to upgrade the look and feel of checkout pages with custom fields, automations, and branding. This also includes being able to detect a customer’s location, adapt the language and currency, and fine-tune fraud prevention protocols.
PayPal, on the other hand, relies very little on customizations to start accepting payments. Advanced developer tools are available for expanding available payment methods, adding unique integrations, generating reports, handling disputes, and more. As a comparison, note that most of these tools are already available on Stripe as add-on products.
AI in payment customization
As more and more consumers become aware of the use of artificial intelligence (AI), it’s important to also look into how AI benefits businesses in payment processing.
For instance, both Stripe and PayPal have tapped into machine-learning technology to manage payment security for their users. Reporting analytics also use some level of AI to generate relevant insights from large volumes of business data.
That said, Stripe is well ahead of embedding AI into their payment platform. It currently uses GPT-4 for managing its developer resources with virtual assistants and chatbots. Stripe also uses AI for facial recognition in selfie checks with its online identity verification feature.
Meanwhile, PayPal began 2024 with exciting updates centered around the use of AI in analyzing customer data from around 400 million consumers who use its service. This includes accelerating the checkout process with biometric access (face or fingerprint) and guest checkout recognition (now used by BigCommerce).
Additionally, PayPal is also using personalized AI to improve customer engagement with new tools such as Smart Receipts that offer personalized recommendations, cashbacks, and the Advanced Offers platform that uses specific merchant data instead of impressions to generate more relevant customer recommendations.
So while Stripe currently has the upper hand in customizations, PayPal is not far behind. The role that AI will play in both Stripe’s and PayPal’s improvements this year should also factor into your decision-making.
Stripe vs PayPal: Ecommerce integrations
As big names in the online payment industry, both Stripe and PayPal are considered experts in ecommerce integrations.
Stripe’s expertise is in providing custom-branded checkout services for websites with a trove of payment methods to choose from—including PayPal. With its advanced customization tools, Stripe can be integrated with most ecommerce platforms for all business models, sizes, and types. Stripe’s marketplace lists hundreds of ready integrations with a variety of business tools, from accounting to project management platforms.
Meanwhile, PayPal has a similar marketplace for various business tool integrations, including ecommerce. But what’s unique about PayPal is that it can be used alongside other payment processors. So even if users already have Stripe embedded on their ecommerce website, it’s still possible to add PayPal as an additional payment method option.
While Stripe also supports independent payment links, PayPal-branded “buy now” buttons are recognizable and easy to add on social media as well as on instant messaging platforms.
Stripe vs PayPal: Security
Stripe and PayPal are both Level-1 data PCI-compliant. This means both providers are equipped with the layers of security and procedures in place when handling sensitive customer payment data. Both also have dispute resolution management tools.
However, Stripe has a longer list of security features to protect customers’ access to your ecommerce website and payment processing features. Aside from the standard security protocols, Stripe also comes with a number of products for risk and identity management, such as ID verification and biometric security.
But what makes Stripe unique is its ability to allow users to fine-tune their fraud prevention rules according to their level of acceptable risk. This means businesses are less likely to lose out on legitimate sales.
Similarly, PayPal has its own fraud management filters that also allow users to control the settings and choose among risk control options to implement. Although not as thorough as Stripe’s functionality, users still get to set their own list of monitored countries, place a cap on transaction amounts, address verification, security code verification, and more.
Based on the level of control over security and fraud management, Stripe’s features are clearly more suited for businesses with heavier sales activity, while PayPal provides the best security for businesses with low-volume sales.
Stripe vs PayPal: Ease of use
We find Stripe and PayPal equal in terms of ease of use for simple payment processing. Both providers are easy to sign up for, offering instant merchant account approval and pay-as-you-go contracts.
Stripe and PayPal offer basic payment processing setups that require no special coding skills to create a checkout page, invoice templates, or reports. However, we find PayPal’s merchant dashboard cleaner, easier to navigate, and more user-friendly overall.
On the other hand, while both Stripe and PayPal also offer developer tools for advanced payment processing and customization, Stripe provides more available functionalities. PayPal users looking for more advanced customization tools will have to upgrade to Braintree.
Which is best?
After comparing PayPal vs Stripe, we find both products closely matched in pricing and ease of use. However, PayPal definitely stood out in terms of payment services while Stripe edged out PayPal in customization and security features.
As for ecommerce integrations, PayPal and Stripe differ in intent. PayPal’s focus is on creating easy website checkout and other online platform payment options, while Stripe leverages ecommerce integrations to build a personalized, online checkout experience.
Making your choice
With intent being the key difference between these two providers, the choice between PayPal and Stripe depends heavily on business goals.
Stripe is a better payment service for businesses that need custom solutions, such as a fast-growing restaurant. However, the setup required to create a customized integration between Stripe and a restaurant POS software will take longer to complete.
PayPal is more convenient and easier to use for businesses looking for simple checkout solutions, such as an additional payment method on their ecommerce platform or standalone “buy now” payment link to use without a website.
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