 PayPal vs Stripe: Similarities And Differences When Used In E-Commerce
In the world of e-commerce, choosing a reliable and efficient payment provider plays a key role in the success of a business. Two of the most popular and widely used payment processing solutions, PayPal and Stripe, offer a variety of features and capabilities that can meet the needs of both small and large businesses. In this article, you will learn about the main differences between these two solutions. You can learn more about PayPal and Stripe cards, fees, and international transfers at Rates - all about financial sector services, available to users from all over the world.
What Is Stripe?
Stripe is a payment system for e-commerce companies that offers users a developed infrastructure for financial management. Features include accepting payments through checkout and payment links, processing returns and disputes, offline transactions through terminals, collecting data and statistics, working with taxes and reporting, recurring payments, and much more. More than 135 currencies are supported.
Companies (including big ones like Amazon or Google) use Stripe for several reasons. In addition to convenience, security, and high-quality customer support, the system is valued for its wide range of developer tools. Stripe is aimed at advanced users and offers them the ability to fine-tune the payment process according to their business needs.
Stripe Features
Stripe provides several services to clients:
- Checkout - for processing payments on the site.
- Payment links - for creating payment links for sales outside the company website.
- Invoicing - for generating invoices and sending them to clients.
- Billing - for working with recurring payments.
- Terminal - for processing transactions through terminals for offline payments.
- Financial Connections - for securely working with customer data and linking bank accounts to accounts on a business website.
- Radar - for automatically checking transactions and rejecting suspicious transactions.
- Identity - to confirm the client’s identity.
- Sigma - for working with data, statistics, and reports.
- Revenue Recognition - to automate accounting reporting.
- Tax - for working with taxes and VAT.
What Is PayPal?
PayPal is a popular international service that has more than 400 million users in 200+ countries around the world. The main functionality is focused on processing payments (via a payment button, checkout, invoice links, and POS terminals). The system supports 100+ currencies.
Although PayPal does not offer as wide a range of features as Stripe, it is widely used by both individuals and businesses. The service is easy to use even for novice entrepreneurs, is in demand among clients, and provides a high level of security and speed of payment processing. The system is easy to connect and configure.
PayPal Features
The basic functionality of PayPal is accepting payments. You can process transactions through a checkout built into the site, a payment button for quick payment, invoice links, and POS systems. One-time and recurring payments are available. PayPal Credit is available for US customers.
In addition, businesses have access to tools for risk management and dispute resolution, secure payments (both one-time and massive), and a convenient system for data analysis and reporting. You can learn more about the features of PayPal and other payment systems on Rates.fm - all about financial sector service with a lot of useful information.
Stripe And PayPal Tariffs
Both services operate on transaction processing fees and do not charge monthly fees (except for some additional features).
Stripe's standard fee is 2.9% (for transactions within the same country). For international payments, the tariff increases by 1.5%, and if currency conversion is required - by another 1%. When using other payment methods, fees may vary: for example, for ACH transfers the rate is 0.8%, and for “buy now, pay later” services - from 5.99%.
Some additional services require a separate fee: from $10/month for using the Sigma service, 0.5% per transaction for calculating taxes, etc. Customized tariffs are available for companies with large turnover or non-standard work patterns.
For PayPal, the tariff includes several components: a basic commission, which depends on the company’s country, an additional commission depending on the sender’s country, and a fixed commission depending on the currency. You can view the current tariffs on the website.
Stripe vs PayPal: Accepting Payments
Stripe Checkout works with 100+ payment methods, giving businesses the ability to serve customers around the world. Users have access to standard bank cards, ACH transfers, and popular e-wallets, as well as several local payment methods. In addition, the entrepreneur can connect payment through third-party services, allowing the buyer to offer additional payment options. In particular, Stripe supports integration with several “buy now, pay later” services.
PayPal accepts credit and debit cards, as well as Apple Pay, Google Pay, Venmo, and other payment methods. In addition, users have access to the PayPal Pay Later system for deferred payments, payment with cryptocurrency, including Bitcoin, and several additional integrations with popular systems.
Stripe vs PayPal: Payment Process
To pay Stripe for your order on the company’s website, the client can use a convenient multilingual checkout. The process is quite simple: the user selects the appropriate payment method from the proposed options, enters payment information and, if necessary, confirms the operation (for example, by entering a code from an SMS). After this, the system automatically processes the payment and confirms the order.
PayPal also allows you to use a built-in checkout but also offers a second way to resolve the issue of how to accept payments from abroad. Instead of a checkout (or in addition to it), the entrepreneur integrates a quick payment button on the website. When clicking on this button, the client is taken to the PayPal website, where he logs into his account and makes a payment. This option is suitable for companies whose target audience actively uses the PayPal e-wallet and provides additional payment security.
Final Thoughts
Both PayPal and Stripe have several advantages: popularity, functionality, security, and a wide selection of available payment methods. When choosing which service to use to accept payments, you should evaluate all the pros and cons. To learn more about working with payment systems, crypto exchanges Coinbase or Binance, as well as transfers between New York and Beijing or other cities, use Rates - all about financial sector service, which will be useful for both clients of Bank of America and blockchain systems.