Braintree VS PayPal: How To Choose The Better Gateway & Payment Processor

It’s come to this: Braintree vs. PayPal. But wait a minute? Doesn’t PayPal own Braintree? Aren’t they running on a lot of the same infrastructure? The answer to both those questions is “yes.” Will that stop us from comparing them? No!

While Braintree is fully integrated into the PayPal ecosystem, it does still have some unique properties that distinguish it from PayPal’s flagship service. Different types of businesses are likely to benefit more from one than the other depending on exactly what they need in a payment gateway and/or payment processor.

Let’s take a closer look at Braintree vs. PayPal and see what they have to offer.

Braintree VS PayPal

Braintree is aimed at higher-volume eCommerce businesses that need a lot of custom control over their payment processes. In contrast, PayPal is designed to be simple and easy to use for merchants with modest eCommerce needs.

Thinking of the two services in terms of complexity is probably the easiest way to distinguish between the two services. (A similar distinction can be made in a Stripe vs. PayPal vs. Braintree comparison, which we touch on later in this article.)

Note that neither service is a great choice for high-risk merchants.

Braintree Payments

Braintree wasn’t always a part of PayPal. Prior to 2013, the Chicago-based company offered merchant accounts, a payment gateway, and a developer-friendly environment that allowed customers to fine-tune their payment processing and reach international markets. Like PayPal, the company primarily focused on eCommerce transactions. That said, you can accept PayPal (and Venmo, for that matter) payments through Braintree.

Braintree is one of the best services of its type, but it’s probably not going to be your first payment processor if you’re just getting started. To put it bluntly, Braintree’s complexity would probably be overkill for a business with limited online sales. On the other hand, Braintree does offer room to grow with the option to negotiate custom pricing (such as interchange-plus pricing).

Likewise, you’ll want to have a developer on your team or be comfortable doing some coding yourself if you want to get the most out of Braintree.

PayPal

PayPal is one of the biggest names in eCommerce payment processing. If you’ve ever purchased something online, there’s a decent chance the transaction used PayPal infrastructure.

PayPal’s flagship service is all about being simple, quick, and easy to use for small businesses. If you sign up for PayPal, you’ll quickly notice how streamlined and intuitive most of the interfaces and options are. Yes, there is higher-level functionality and customization you can tinker with if you have a developer, but where these features are core to Braintree, they’re more icing on the cake for PayPal.

One of the bigger differences between the two services is that, where Braintree offers individual accounts, PayPal is a third-party processor. That means that, instead of providing you with a merchant account, PayPal aggregates all of its customers into a single merchant account. PayPal deducts its fees from that account before sending your sales money to you. We’ll go into the differences in more depth below.

Additionally, PayPal doesn’t support as many payment types as Braintree. In particular, businesses that need to do recurring payments through ACH debits will find that PayPal refers them to Braintree.

Features

You can think of Braintree vs. PayPal as a battle between two different shipping companies using the same roads. Because of this, the two services have more in common than not. In fact, when Braintree can’t do something that PayPal can, that lack can be remedied by tacking on a PayPal integration (with a handful of exceptions).

Merchant Accounts

One of the biggest differentiating factors when it comes to Braintree vs. PayPal is how the services go about the question of a merchant account.

Braintree provides each customer with their own dedicated merchant account. What this means in practice is that you’ll have to jump through a few more hoops and wait longer for your account to come online. However, it also means that your account will be at far lower risk of account freezes and holds. And if one of those problems does happen to emerge, it’ll be much easier to figure out what went wrong and to correct the situation if possible.

PayPal takes a different approach. Instead of giving each merchant their own account, PayPal combines them into a large super account. This is called third-party processing or aggregation. The advantage here is that you get the benefits of a merchant account without the hassle of being vetted for your own account. The downside is that you’re more likely to run afoul of mysterious account freezes and holds. And when they do happen, they’ll be harder to resolve.

Payment Methods

If you poke around PayPal’s online resources for information about payment types beyond the ability to accept credit, debit, or PayPal transactions, there’s a pretty good chance you’ll be referred to one of the company’s other services. Among them? Braintree. However, PayPal does support some local payment types (such as Bancontact and iDEAL) within their market territories.

Braintree is far more versatile and able to accept ACH direct debit, digital wallets (including but not limited to PayPal), and local payment types. A funny quirk, however, is that you need to add PayPal to your Braintree integrations to access local payment types. Again, remember that these services are using a lot of the same infrastructure.

Developer Tools

PayPal’s developer tools have come a long way in recent times, adding a level of depth to a service primarily designed around being simple and accessible to the average merchant. In fact, PayPal’s developer resources are starting to look suspiciously similar to Braintree’s, a service often billed as developer-centric.

At this point, I’d think of it in terms of which direction you’re approaching your payment solutions from. Do you have a developer-equipped company looking to customize your payment transactions but also wanting access to PayPal’s infrastructure? Go with Braintree.

On the other hand, are you more concerned with getting an intuitive, easy-to-use interface with the option to later tinker around with and fine-tune your payment processes? In that case, go with PayPal.

Pricing

Both PayPal and Braintree use a flat-rate pricing scheme that starts at 2.9% + $0.30 per online transaction.

Braintree additionally offers ACH Direct Debit transaction processing at a fixed rate of 0.75% per transaction, capped at $5 per transaction. Businesses that process over $80K per month can negotiate custom processing on this and other fees. Nonprofits can get a discounted rate of 2.2% + $0.30 per transaction. If you want to use Braintree’s gateway independent of its payment processing, it’ll cost you $49/month and $0.10 per transaction. International charges add 1% to your processing fees.

PayPal’s services are a little more à la carte. Where the two services overlap, their fees are often identical (for example, PayPal offers the same nonprofit discount rate). There’s no additional fee for using PayPal Checkout or PayPal Payments Standard. A key pricing comparison is between Braintree vs. PayPal Pro. The PayPal Payments Pro option, which allows you to do custom transactions on your page rather than PayPal’s and offers a virtual terminal, costs $30/month. Similarly, PayPal’s standalone gateway, Payflow, costs $25/month if you want to use it with a customized checkout. It’s free if you don’t mind that the transaction jumps over to PayPal’s page for completion.

Ease Of Use

Here’s where things start to diverge a bit more.

As I mentioned above, when you’re talking about PayPal vs. Braintree, both Braintree and PayPal can be said to be “developer-friendly” at this point, but there are differences in how the services prioritize certain types of customers.

PayPal is, straight up, the benchmark for easy-to-use, no-fuss payment processing. If you want to be able to take online credit card payments without caring about minute customizations and optimizations, it doesn’t get much better than PayPal. Even better, PayPal’s ecosystem is so well-developed that it’s easy to add additional functionality to your account as you need it. You can get all of this without typing a single line of code, but the option to tinker with the package is still there.

Braintree takes the opposite approach. It’s almost more of a toolkit with which you can build your dream payment system without having to worry about all the bloat that comes with the default PayPal experience. The PayPal stuff is still there if you want it, but you have a bit more control over the experience without having to fight the well-polished rails you might run into if you’re working from the PayPal base. This, of course, comes at the cost of having to do more work to get the system up and running.

Customer Service & Support

Both Braintree and PayPal offer multiple ways to resolve your questions or problems, from email ticketing to online knowledgebases to social media. PayPal has an edge when it comes to searchable answers to problems, if for no other reason than it’s such a popular and widely-used service. Braintree does get an honorable mention here, however, for its status page, which broadcasts any problems its network is experiencing in real-time.

For purposes of making a distinction, however, I’d like to zoom in on live support, specifically phone-based support.

PayPal’s phone service appears to be unreliable at best, with customers frequently reporting service reps were unable to solve their issue. I suspect this has as much to do with PayPal being a third-party processor as it does with any given rep’s competence. The truth is third-party processors always struggle to resolve account freezes and holds to customer satisfaction. In many cases, they barely know what went wrong themselves.

Braintree, on the other hand, has a reputation for strong live customer service, particularly during normal business hours (Central Time). As you’ll have your own merchant account, reps also typically have an easier time figuring out what went wrong with your account if a problem does develop.

Reviews & Complaints

Before 2020, Braintree had an incredibly strong user review profile online. This weakened sharply in 2020, with the service’s Better Business Bureau rating dropping to a B-. It’s generally safe to assume that any sudden sharp changes that happened in 2020 had something to do with the COVID-19 pandemic. While it’s not entirely clear what happened (perhaps greater demand for online payments overburdened them?), more customers have been reporting account holds and freezes this year with Braintree. This may also have something to do with the way Braintree’s onboarding process works, wherein some customers start processing payments before their merchant account is approved. Make sure to wait until you have the green light from Braintree, and you should be able to avoid most of these issues.

Meanwhile, account freezes and holds are, and have been, a major source of complaints from PayPal customers. As I mentioned earlier, this is par for the course for third-party processors. That’s compounded by PayPal’s inconsistent customer service, which means you can have a tough time resolving any issues that arise with your account.

For both services, the flat rate is both a blessing and a curse. What it effectively means is you’ll be overpaying for some transactions and underpaying for others. For example, Visa transactions come in at a wholesale rate that tops out around 2.4% + $0.10 per transaction. The good news is, for Braintree, at least, you can negotiate an interchange-plus pricing scheme should you outgrow the flat rate.

On the positive side, customers love the consistent pricing and wealth of payment options provided by Braintree and how readily and easily it is to integrate into it. For PayPal, customers liked how quickly the service makes cash available to merchants, with transactions clearing almost immediately. They also appreciated the easy setup, robust infrastructure, and how widely accepted the service is.

Integrations

PayPal is one of the most widely-supported payment platforms in the business, so you shouldn’t have too much trouble finding your favorite integrations as long as they aren’t direct competitors.

As for Braintree? It, too, is supported by tons of integrations, the most important of which is PayPal itself.

Which Is Best For My Business Needs?

Now that we’ve covered how PayPal vs. Braintree stack up to each other, let’s sum up who each service is best for.

Choose Braintree Payments If…

• Your business needs to accept ACH payments
• You have a developer on your team, or are one yourself
• You want a dedicated, stable merchant account
• You want the option to switch to interchange-plus pricing in the future

Choose PayPal If…

• You don’t do a ton of eCommerce transactions
• You want to get your online payments up and running quickly
• You want nearly instant access to your payments
• You want an easy-to-use interface

Comparing Braintree VS PayPal: The Final Verdict

What’s your favorite soft drink: Coke or Diet Coke? Cola metaphors aside, Braintree versus PayPal represent two variations on what is essentially the same service once you get under the hood. Braintree is the full-calorie package designed for merchants who want to take full advantage of what the PayPal infrastructure can offer. PayPal is the diet-friendly option for businesses that want to use that infrastructure without thinking about it too much.

If you aren’t sold on PayPal or Braintree, you still have other eCommerce options. In particular, Stripe is on par with PayPal and Braintree in terms of pricing, products and services, ease of use, and support. Check out how the competition stacks up in our PayPal vs. Stripe vs. Braintree (and our Authorize.Net vs. PayPal) comparison articles.

• Stripe VS Braintree: Which Online Payment Processor Is The Better Fit For You?
• Authorize.Net VS PayPal: Comparing Fees, Features & More For Online Payments
• Stripe VS PayPal: How To Choose The Right Payment Processor For Your Online Business