Stripe vs PayPal

In the eyes of many businesses, Stripe and PayPal are the two primary options when choosing a payment processor. While PayPal has a long, reputable history in processing online payments, Stripe appears to be catching up as it fights for global brand recognition. Although an exaggeration, Bloomberg famously reported how seven lines of code were the foundation of Stripe’s unicorn success — highlighting how simple credit card payments just become. Stripe does offer slick no-code solutions, but this isn’t where it’s strongest. 

You may also be interested in our more comprehensive review of Stripe for UK SMEs here and a list of other popular payment gateways for UK business here. 

Stripe vs PayPal: Key Fees and Features

The reason for Stripe closing the distance on PayPal is its simplicity and superior user checkout experience. Stripe’s key selling points are how easy it is to set up with limited technical expertise, the options to add module UI components to customer the user experience and their transparent pricing.

Stripe has no monthly setup or monthly fees for its basic service which offers various checkout options, real-time reporting, and 24×7 support. Processing standard UK online cards is 1.50% + 20p, which remains the same for payments via a Stripe-hosted link, while in-person payments are even cheaper at 1.40% + 10p.

Deciphering PayPal’s fees takes a little longer, without much payoff for the effort. Some fees are cheaper at PayPal — such as disputes and the 1.20% + 30p Blended Pricing for Advanced Card Payments — but this can quickly change. When using the Website Payments Pro service, the transaction fee increases to 3.40% + 30p. You need the latter if you want full checkout integration (else you’re using PayPal’s external gateway).

The caveat here is that, when only using the cheaper and simplistic PayPal-hosted payment, their brand recognition does have more sway over Stripe. This, along with simpler onboarding and reporting, makes it worth the higher fees for some merchants.

Snapshot Comparison

• While PayPal’s lowest processing fee is cheaper than Stripe, most of the time PayPal is more expensive. Both are relatively expensive compared to other payment processors we would recommend.
• Both companies offer similar services for smaller businesses but Stripe has far more features and greater customisation options for businesses with a high volume of online transactions.
• Additional fees, such as chargebacks and card readers, are similar.

Similarities Between Stipe and PayPal

Stripe and PayPal share more similarities than differences. You can facilitate credit card, manually keyed-in, and in-person payments with both, as well as provide a very safe online payment gateway that is accessible to customers around the world. They’re safe for merchants, too, with 2-factor authentication, fraud detection, and data encryption.

Both platforms boast an easy set-up process, and their simplicity is reflected in their higher prices. It’s possible to integrate both with CRMs, and both have strong built-in reporting capabilities.

What Are The Main Differences?

USPs of Stripe

• Developer-Friendly: Stripe’s USP from day 1 has been its strong developer tools. It was frequently applauded for having the best API documentation in the world, making for powerful yet speedy payment solutions.
• Integration and Analytics: Stripe has more possibilities for integration due to its developer tools. Plus, Stripe Sigma has a clear advantage when it comes to in-depth financial analysis.
• Broader Payment Methods: Stripe accepts a wider variety of payment methods, including local payment methods like WeChat and Klarna, and in more currencies.
• Clearer Pricing: There is a clear pricing structure and no monthly fees.

Ultimately, Stripe has a greater capacity for customisation and bespoke solutions, making it more powerful for companies with technical expertise. The ceiling for reporting, integration, and checkout customisation is greater.

USPs of PayPal

• Brand Recognition: PayPal continues to have a stronger global brand that is seen as highly trustworthy for online transactions. This could help convert sales.
• Onboarding and Simplicity: Being less focused on developers, PayPal is even easierto onboard with (except in understanding its fees). It has a good user interface and, while less powerful, its reporting is simpler. Some integrations are also simpler than with Stripe.
• Buy Now, Pay Later: While Stripe allows integration with other BNPL services like Klarna, PayPal has its very own service in Pay In 3 and PayPal Credit for no additional costs.

PayPal is more than happy to charge a high price for its services due to its strong brand and ease of use for merchants. It can also make a strong claim for improving checkout conversions due to its in-built PayPal Credit. PayPal may be more suited to companies who aren’t looking to scale up quickly, but would rather opt for a safe brand that has simple onboarding and reporting.

Stripe vs PayPal Fees & Costs

Target Market & Market Share of Stripe & PayPal

The powerhouse that is PayPal is best shown in raw Total Payment Volume (TPV) numbers. In Q3 of 2023, PayPal processed $387 billion, equivalent to over 6 billion individual transactions.

However, earlier in 2023, Stripe claimed to investors that it was on track to process $1 trillion in payments, which is roughly $475 billion short of PayPal. The gap appears to be closing given that PayPal’s year-on-year TPV change in 2022 was 5.3%, while Stripe’s was 26%.

Unsurprisingly, Stripe’s developer-focused solutions have led to being favoured by tech firms, with 75 of the 100 companies in the Forbes Cloud (2022) list using Stripe. PayPal, on the other hand, is so large that it has a broad demographic (though, intuitively, it may be preferred by less tech-savvy users). Its customers are fairly evenly spread across ages and there is no push towards merchants in specific industries.

It’s also apparent that PayPal is more comfortable with higher-risk clients given the prevalence of PayPal-accepting casinos and betting firms. Stripe, on the other hand, claims such activities are heavily restricted.

US Dependence

Stripe concedes that the US is the largest market, but that 55% of new clients in 2021 were from outside of the US, meaning it now supports businesses in over 50 countries. Outside of the US, Stripe is performing particularly well in France.

On the other hand, PayPal has just over 400 million users and claims 208 million are in the US, which is around half. Stripe is making increasing efforts for global reach, particularly with its Japanese-spoken customer support, but PayPal has had a much longer time to be less US-dependent.

UK Specific Growth

It wasn’t until 2013 that Stripe launched in the UK, though this was around the time of mass smartphone adoption and mobile ecommerce growth. Stripe claims that in 2023, over 300 businesses began using Stripe per day in the UK, which has resulted in Stripe processing around half a billion transactions per year for UK clients.

PayPal launched in the UK an entire decade earlier in 2003. At this point, there were already 31 million PayPal members globally. Active PayPal-using customers in the UK were falling until the pandemic hit (which boosted all online payment providers).

Supported Currencies & Payment Types

Stripe’s Accepted Payment Methods

• Credit and Debit Cards: Visa, Mastercard, Maestro, AMEX, Discover, Union Pay, JCB, Apple Pay, Google Pay, Diners Club, Klarna
• Business Cards: Commercial, corporate or business cards issued by Visa and Mastercard
• Buy Now, Pay Later: Swish, Scalapay, PayPo, GrabPay, LINE Pay
• Local Payment Methods: iDEAL, Bancontact, Giropay, Alipay, WeChat Pay
• In-Person Payments: Card reader (contactless and Chip & PIN), smartphone tap-to-pay
• Direct Debits: PADs, SEPA, BECS, Bacs
• Manually Keyed-In Payments
• Shareable Link & QR Code

Stripe has a very intuitive page for discovering the payment methods available, with many filters to choose from.

PayPal’s Accepted Payment Methods

• Credit, Debit, & Business Card Payments: Visa, Mastercard, AMEX, JCB, Diners Club, Discover,
• Buy Now, Pay Later: Pay in 3 and PayPal Credit
• Local Payment Methods: iDEAL, BLIK, Girepay, MyBank
• In-Person Payments: Card reader and smartphone contactless via Zettle partnership
• Direct Debits: Automatic recurring payments via bank account, PayPal balance, or bank card
• Manually Keyed-In Payments: Via PayPal Here
• Shareable Link & QR Code

PayPal does display some of its alternative payment methods, but this is on a developer page, making it less user-friendly than Stripe’s.

The key differences are that PayPal accepts fewer externally connected payment methods (i.e. local payments and third-party BNPL platforms), as well as partnering with Zettle to deliver in-person payments. But, PayPal makes Buy Now, Pay Later easier for customers due to having an in-house service.

Currencies For Sales

• Stripe supports payments in 135+ currencies
• PayPal supports payments in 24 currencies

Currencies For Settlement Payouts

• Stripe offers payouts in different currencies for a 1% fee (18 currencies)
• PayPal only supports local currency transfers, meaning there’s an expensive conversion fee

Checkout Experience

PayPal’s advantage is in having a very familiar checkout experience with customers. It takes place on PayPal’s site and whilst the required login may cause some friction, the trustworthiness of the brand name will prevent a major impact on conversion rates. It is possible to have a guest checkout option, but buyers do not always have this option (it requires PayPal cookies stored on the buyer’s computer).

If you want to integrate the checkout experience onto your own platform, have a customised layout, and more reliably offer a guest checkout with no PayPal account required, then you will need the Payments Pro service.

Stripe offers an easy-to-integrate pre-built checkout which is quick to embed on a website. This option, named ‘Checkout’, still allows you to change colours, brand logo, and fonts in a low-code way. For more UI customisation, ‘Elements’ provides some building blocks to tailor the payment experience. Both avenues are available for free.

Furthermore, Stripe-hosted link payments can also be hosted on a custom domain, giving more consistency throughout the sale.

Which Has The Best Checkout User Experience?

The best checkout experience will depend on your demographic. If customers are more tech-savvy and/or trusting of your brand, Stripe can provide a cleaner buying experience that aligns with the platform’s UI and brand. But, less experienced online users might be more confident and familiar with PayPal.

A typical Stripe checkout may look like this, but it’s not always the same because of their strong support for customisation. For Android, there may be a clear Google Pay option, bank card form, along with local payment options already visible.

PayPal’s is perhaps more iconic with its strong branding colours and logo. You have much less room to adapt this checkout (and why would you if you want to leverage PayPal’s trustworthiness?).

Fortunately, both companies are aware that most sales are made on a smartphone now, so both have very responsive and mobile-friendly designs.

Integrations

Stripe and PayPal have many third-party integrations that help extend their functionality. Stripe has a large number of apps available in their app marketplace making it very easy to integrate with many popular business software providers.

Popular integrations are WooCommerce, a dominant WordPress ecommerce framework, along with Xero (Stripe) and QuickBooks (PayPal), two significant accounting solutions.

Stripe connects to various ecommerce and CRM platforms like Shopify and Salesforce, along with ERPs such as NetSuite and Odoo. While PayPal doesn’t currently have an ERP to integrate with, it has many plug-ins and options for no-code integration.

This may make PayPal appear stronger, particularly as it’s faster to interact with the likes of WooCommerce. But, Stripe has very powerful API integration with great documentation for such bespoke solutions. Stripe does have low-code integrations, too, and also has more external tools for international transactions.

Overall, both companies perform similarly. And, both platforms can connect to Zapier, the popular workflow automation software, opening them both up to many more integrations through this tool.

Which Is Easiest To Set Up & Use?

Although Stripe is easy to set up, PayPal is one of the few companies that surpasses it for the simplicity of onboarding. Firstly, clients are more likely to be already familiar with PayPal than Stripe, which is an important first step for merchants. Secondly, it becomes apparent that PayPal is aimed at the layman and its limited customisability acts as an advantage for some.

For ongoing use, PayPal likely wins on the ease-of-use front because its reporting is stripped down and intuitive.

The instances in which Stripe is easier to use are when users are looking to make use of the more technical features. Both offer RESTful APIs and SDKs, but Stripe has unbeatable documentation and visual guides, even providing clonable sample projects.

Quality of Customer Support

Both Stripe and PayPal are very good at creating customer support pages and guides, but Stripe is the better of the two. Stripe’s user guides can be extremely visual and interactive, showing how to solve issues in various programming languages, and even offering template projects. PayPal does have good API documentation and it can sometimes appear very similar to Stripe’s.

When trying to make contact as a provider, both offer email, chat, and over-the-phone support. One difference is that PayPal’s phone support is not 24/7, while Stripe’s is. There is a knowledge base for technical help with both companies, though Stripe uniquely hosts a Discord server to build a strong technical support community.

PayPal is vague about what languages they can provide phone and email support in, while Stripe is upfront about it being only English and Japanese. Both companies have many negative reviews online regarding customer support, but Stripe appears to have more positive reviews on the likes of Trustpilot.

Final Thoughts

Usually, convenience comes at a cost, and this is what you’re weighing up between the two companies — how much is PayPal’s simplicity and strong brand worth?

While Stripe outperforms PayPal on many metrics (fees, customisation, reviews), it also suffers from a similar problem. In the eyes of many developers, Stripe is a powerful but convenient option that also comes at a high price.

Stripe will likely serve you better in the long run, but fill in our short form to compare Stripe’s fees with other payment processors.