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PayPal vs. Stripe

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PayPal (see our review) and Stripe (see our review) are tools to handle online payment processing, but they’re also so much more. With its slew of interconnected products ranging from mobile payments to financing services, I think it’s safe to say that PayPal is a household name. And Stripe, while more of a “behind the scenes” processor whose name customers don’t necessarily recognize, has a long list of very popular clients and partners. So in the PayPal vs. Stripe debate, which has the advantage?

First, allow me to explain that neither PayPal nor Stripe offers the cheapest payment processing rates around. For a basic payment processor with lower rates, you’d be better off getting a regular merchant account. You’ll get some basic eCommerce support, which might be best if you’re focused on cost and not so much on features.

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But if you’re looking for features and flexibility, you’re in the right place. PayPal and Stripe’s strengths lie in their myriad eCommerce features, including support for digital goods, subscriptions, and even mobile app payments. However, despite the fact that both these services do fundamentally the same thing, they do go about it in different ways.

If you’re not sure which of these online payment processors is right for your business, or just want a bit more context for both before you decide, read on for my comparison of both companies’ selling points: features, pricing, customer service, and more. If you have something to add or your experience differs from my conclusions, feel free to leave me a comment!

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Products and Services

Winner: Stripe

PayPal’s core offering has always been its payment processing: allowing anyone to make a payment to a merchant using their own PayPal balance or a credit or debit card.  But these days, merchants who use PayPal get access to a variety of supplemental services that allow you to go beyond selling on eBay.

There are three service plans for PayPal:

  • Express Checkout: Add PayPal as a supplemental checkout option in addition to your standard payment processor for standard PayPal rates.
  • Payments Standard: Get online payment processing and invoicing for standard rates.
  • Payments Pro: Get your standard PayPal features PLUS a Virtual Terminal and hosted checkout page for a monthly fee plus processing fee.

PayPal’s other services include:

  • PayPal Here: PayPal’s mPOS app
  • POS software integrations
  • Hosted payment page (with PayPal Pro subscription)
  • PCI compliance
  • PayFlow Payment Gateway
  • Online & in-app invoicing
  • Virtual terminal
  • Digital goods
  • Subscriptions
  • Donation collection tools
  • Buy now buttons
  • Mass payout
  • PayPal Credit: Provide no-interest financing to customers

Plus, PayPal offers SDKs and other developer tools so you can create custom integrations — and even power your own mobile payments app with support for Android Pay and Apple Pay.

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Like PayPal, Stripe’s primary function is online payments. The company offers merchants a boatload of features to complement its core offering, but unlike PayPal, they’re more of supplements than additional features beyond payment processing. Here are Stripe’s main features:

  • Payment processing
  • Hosted payment page
  • PCI compliance
  • Customizable checkout
  • Subscriptions
  • Marketplace tools
  • Platform-building tools
  • Coupons and free trials
  • Customizable reporting tools
  • Buy buttons in mobile apps

It bears mentioning that Stripe claims to have more than 100 features — and I’m inclined to believe it. It’s a very robust platform that can cater to almost any kind of internet businesses. Plus, beyond the general features, you’ll also find Stripe’s Atlas suite of tools, designed to help international entrepreneurs start a business in the US. Stripe also has a robust API for easy integration with a host of other applications. You can also integrate stripe with mPOS apps — though you’ll still be paying the same rate, which is significantly higher than most mPOS apps. However, the integrations do support Android and Apple Pay as well.

PayPal vs. Stripe: Which Features Do You Really Need?

Now that we’ve covered the basics, it’s time to consider what’s important for your business.

Sigma is Stripe’s reporting tool, and I want to call attention to it because it’s easily the most robust and unique reporting tool I’ve seen. PayPal will generate reports for you — but no one besides Stripe allows you to create your own custom SQL queries to generate reports. This isn’t just selecting from a pre-generated list of options — if you can ask it using SQL, you can get a report. If you’re after some serious business data, it’s hard to ignore this tool. PayPal’s reports are fairly advanced (and it’s a long list), but they are not customizable. At least not like Stripe’s.

I continue to be surprised by Stripe’s lack of a virtual terminal. You can manually enter transactions through the dashboard, but the company actively discourages using this feature more than occasionally. It also leaves you on the hook for PCI compliance. PayPal’s virtual terminal comes at a cost — and a higher processing rate — but depending on your business, it could be an invaluable tool. Most omnichannel platforms offer a virtual terminal these days. Then again, Stripe is mostly for online commerce.

A related note: Stripe generally handles PCI compliance for you, which means no fees or additional work. If you have the PayPal Standard plan, you’re automatically PCI compliant as well. However, on the PayPal Pro plan you aren’t. Instead, PayPal gives you transparent redirects to help, and you much complete an annual self-assessment as well as quarterly scans and more. It won’t cost you more beyond the monthly plan; you’ll just have to put more work into it.

Something that Stripe recommends to get around PCI compliance concerns for manual transactions is using an invoicing service. You’ll have to find an add-on service that integrates with Stripe — for example, Zoho Invoice. This is important because Stripe has no native invoicing support. PayPal will let you send invoices from your computer or from within the PayPal Here app.

However, there’s no doubt that Stripe has some of the most capable tools for designing checkout processes and managing subscriptions. PayPal has some solid management tools for subscriptions and recurring billing, but you have zero control over the checkout process on the Standard plan,  and the Pro Plan’s checkout tools just don’t seem to stack up against Stripe’s.

While PayPal and Stripe offer solutions to the same problem (online payments), they go about it in VERY different ways. PayPal is the entry-level solution — something that anyone (or at least, almost anyone) with even a basic understanding of eCommerce or technology could use. However, you also get a lot more tools to take your business beyond just the Internet: an mPOS, invoicing, POS integrations, and more. Unless you’re looking at something completely custom, most of PayPal’s features don’t require specialized knowledge.

To get the most out of Stripe, you’re going to need a developer, because it was not designed for the layperson. It’s meant for businesses that need a highly customizable and tech-based solution for payment processing. If you need an abundant array of features, Stripe is the clear winner and your emphasis is specifically online payments. If your priorities lie elsewhere (ease of use, or omnichannel commerce), you might be more inclined to consider PayPal.

Fees and Rates

Winner: PayPal

Both PayPal and Stripe charge merchants the same per-transaction processing fee: 2.9% + $.0.30. In addition, Stripe also supports both ACH and Bitcoin, charging 0.8% per transaction, capped at $5 maximum.

Stripe charges nothing extra for accepting international cards, for its subscription services, or its hosted payments page. This is definitely a perk. However, if you plan to use Connect, Stripe’s platform-building suite, you’ll encounter additional fees.

PayPal’s base subscription charges you nothing per month — but you don’t get a hosted payment page. To do that, you need to upgrade your plan to PayPal Payments Pro. You also get PayPal’s virtual terminal (which comes with a different pricing scheme for transactions). However, if you want recurring billing/subscriptions, there’s an additional fee.

  • PayPal Payments Pro + Virtual Terminal: $30/month
  • Virtual terminal pricing: 3.1% + $0.30
  • American Express pricing for Pro and Virtual Terminal: 3.5%
  • Recurring billing: $10/month

Forty bucks a month for hosted payment page and recurring billing seems like a lot. However, you do also get the virtual terminal — a feature Stripe doesn’t support. Plus, if you’re only after subscription management, you don’t need to have PayPal Payments Pro. A $10/month add-on is a lot more reasonable, if not ideal.

It’s also worth mentioning that PayPal is actually more cost-effective in other situations. Specifically, PayPal offers a non-profit discount for 501(c)(3) organizations, where you’ll pay 2.2% + $0.30 for transactions. And if you sell low-value digital goods (under $10 on average), PayPal actually offers a micropayments plan that could save you money over the typical rates. You’ll pay 5% + $0.05 per transaction — and because the transaction fee is lower, you wind up saving money even though the percentage fee is higher. There’s also a Mass Payout option, where you can send a bulk wave of payments for 2%, capped at $1 per transaction.

If you need an mPOS, PayPal Here is also more cost-effective than going through Stripe — 2.7% per swipe, as opposed to 2.9% + $0.30. Again, depending on your average ticket size, this could translate to substantial savings. (However, if you use Shopify Payments, which is powered by Stripe, you can get 2.7% on swiped transactions. But that means building on Shopify’s platform, not Stripe’s.)

I really dislike PayPal’s cost for its hosted payment page, virtual terminal, and recurring billing, given that other options out there — not just Stripe — with lower pricing. But I also like that you can get nonprofit pricing, that there’s a micropayments option for merchants who sell digital goods, and that you get a flat percentage rate for mPOS transactions. That makes PayPal a lot more flexible on pricing compared with Stripe.

Ease of Use

Winner: PayPal

Both Stripe and PayPal make it easy for customers to pay merchants. But as a merchant, your experience will be quite a bit different. While PayPal does offer tools for developers, it’s designed for almost anyone to be able to set up and start taking payments. If you have no experience with code, setting up Stripe is going to be a lot more complicated. You may be able to set up the basics yourself (we’ve seen user reviews affirming this). However, if you need anything more complicated than a basic eCommerce site, you probably want to just bite the bullet and hire a developer. Otherwise, you’ll be fairly limited in what you can do.

Here’s an example: You’ve probably seen PayPal’s ubiquitous “Buy it now” button, which allows you to order and pay for items on a number of sites. In order to integrate a “Buy it now” button into your site, all you need to do is copy the corresponding code from PayPal’s website and paste it into your own site. Stripe has a similar “Pay with card” option, but it requires you as the merchant/developer to create the necessary coding framework.

Now, if you are a developer, there’s no question that Stripe is the better choice. You can do a lot with PayPal these days. But you can do so much more with Stripe. Again, Stripe was designed first and foremost for developers…so this makes a lot of sense. But if you’re not tech savvy and you don’t have easy access to someone with the requisite skills, PayPal is going to be the smarter option.

Contract Length and Early Termination Fee

Winner: Tie

Neither PayPal nor Stripe requires a contract (both services are pay-as-you-go), and that means no early termination fee for either service either. Yay!

Sales and Advertising Transparency

Winner: Tie

Both PayPal and Strike are very upfront about their fees and services. Neither company employs any schemes or gimmicks that will catch you by surprise when you see your bill. As mentioned, PayPal’s fees can be a little trickier to wrap your mind around because of their complexities. Still, they are all clearly laid out on the firm’s website so you certainly couldn’t call them “hidden fees.” Both services are also pretty well known, so they don’t need to spam the internet with annoying advertising, and you’re not going to get salespeople pounding at your door (or your email inbox).

Customer Service and Technical Support

Winner: PayPal

PayPal offers several ways to reach a support rep. These include:

  • Self-Help Center
  • Community Forum
  • Email support
  • Developer Center: PayPal’s dev documentation probably isn’t as thorough as Stripe’s, but it does exist.
  • Phone support (available Mon–Fri 5 a.m.–10 p.m. PST): Word on the street (see “Negative Reviews and Complaints”) is that the quality of PayPal’s phone support is inconsistent.
  • Twitter – The @AskPayPal account fields service and support questions Mon–Fri 9 AM – 5 PM CST
  • Facebook: You can’t post to the page, but you can comment on posts and message PayPal directly if you have questions.

Stripe, on the other hand, offers more limited support:

  • Knowledgebase
  • Email support
  • Developer Docs: Stripe’s documentation is often the best place to learn more about what particular features can do, even if you aren’t a developer. This part of Stripe’s support is far more comprehensive than the knowledgebase, which…really isn’t all that surprising. Again, this is a developer-focused option, and Stripe’s invested its resources accordingly.
  • Freenode-based chat support (#stripe)
  • Facebook: No posting to the page allowed, but you can message Stripe.
  • Twitter: There’s no dedicated support account, but you can tweet @Stripe or check @StripeStatus for outage notices and updates.

Stripe’s support is decent, sure, but PayPal gives you an option to get on the phone about actual payment-related issues. Even if the quality isn’t terrific, the importance of having live phone support can’t be understated.

Negative Reviews and Complaints

Winner: Tie

Both services are generally liked, but it is not difficult to find complaints online. Here are some of the main complaints about PayPal:

  • Withheld funds, freezing of accounts, and termination of accounts
  • High transaction fees (compared to traditional payment processors)
  • Inconsistent phone support
  • Limited seller protection

You’re going to see a similar thread of complaints about Stripe. Here are the most common issues merchants encounter:

  • Terminated accounts, often with funds inside
  • Unresponsive customer service
  • Frequent chargebacks

Both PayPal and Stripe have a pretty cautious approach when it comes to accepting online payments, which could result in account freezes and chargebacks for some merchants. This is because they’re both third-party processors — they aggregate accounts into one large account. On the one hand, it’s fairly easy to create an account. On the other, the minimal underwriting means you’re at a greater risk of a sudden hold or termination. Unfortunately, that’s something you’ll have to deal with if you choose ANY third-party processor. It sounds scary, but people build successful businesses on the backs of these services all the time. If you think you might be a high-risk merchant, or you know your line of business is on either company’s list of prohibited businesses, you should probably consider going with a traditional merchant account or even a high-risk processor such as Durango Merchant Services (DMS) instead.

You can also check our guide: How to avoid merchant holds, freezes, and terminations.

Positive Reviews and Testimonials

Winner: Tie

It sounds scary, but people build successful businesses on the backs of these services all the time, even with all the associated risk. Finding positive reviews of any service tends to be more challenging than finding complaints because people are more likely to speak up if they are unhappy with something, but it is possible to find them.

Stripe’s list of high-profile users, such as Reddit, Mashable, Foursquare, Squarespace, and Shopify speaks for itself. Clearly, it is the darling of tech-savvy businesses. But dig a little deeper and you’ll find more feedback from other users. Here’s what people like about Stripe:

  • Quick and easy signup
  • No “fine print” fees
  • Nice API to work with
  • Great documentation
  • All services included in one price point

You’ll find some similar praises for PayPal, specifically about its payment processing and pricing. I’m not too surprised by the lack of praise for its API or more advanced features — though they did come up in a couple of reviews. Here are the highlights:

  • Easy setup
  • Widely accepted/trusted payment form
  • Offers multiple products/services besides payment processing
  • Transparent pricing

Final Verdict

Winner: Tie

In the end, I don’t think it’s easy to draw a clear winner in the PayPal vs. Stripe debate.

Ultimately, the choice depends on your needs. If you have developing experience (or someone on your payroll with the requisite skills) and want to build a customized online storefront or a complex platform for a SaaS subscription product, Stripe is the better choice. If you’re not a developer, don’t have the means to hire one, or don’t have very complex needs, PayPal is likely more suitable. Though you don’t get a hosted payment page without a $30/month subscription, PayPal does have a high degree of consumer trust, so it’s less of a concern if PayPal redirects your customers to its site to complete the transaction.

Keep in mind that you aren’t just looking for a way to take payments online. Just about any service out there can do that. Focus on the features you need, not just now but in the future. An mPOS, invoicing, flexible checkouts, subscriptions — whatever will help you run your business more easily.

However, either service requires you to sign a contract, which means you can try out one of these services (or both services) without having to commit. Want to see which runs better? It might take a little bit of work, but you can totally test them both out for as long as you’d like.

And that, my friend, is pretty cool.

What are your thoughts on Stripe vs. PayPal? Have you tried both services? Which did you opt for? We love to hear from readers, so please leave us your comments!

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Melissa Johnson

Melissa Johnson

Melissa Johnson has been writing about payment processing and mobile payments since 2014, and has been quoted in articles for Credit Karma and The Next Web, among others. She graduated from The University of Kansas in 2010 with bachelor's degrees in English and journalism.
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    Hi! I am planning on offering a subscription service that is very low (around $2/month — obviously I’m anticipating a big chunk is going to get taken out from transaction fees). Would you recommend a particular service over another in this instance? Thank you for your time.

      Jessica Dinsmore

      Hi Paul,

      Thanks so much for writing! I would suggest looking at PayPal‘s micropayments plan. They charge $10/month for recurring billing plus each transaction processes at 5% + $0.05, which actually saves money. Best of luck!

        Jeff Mcneill

        Since Stripe has ACH (and Paypal doesn’t, certainly not in the same way) it seems that Stripe is at least parity on the fees/processing options vs. Paypal. I really don’t see a Paypal win in this. Unless one just accepts manual ACH done by customers?

          Peter Ridge

          Hello, great article, thank you. What’s the best online processing merchant for processing one product, price point $5000?


            Tom DeSimone

            Hi Peter,

            For large-ticket transactions, we recommend Fattmerchant. If they say that the account is too risky, try Payline Data.

              raffa ello

              Hi Melissa,

              such a nice article here!
              This is maybe more a commercial aspect but still useful to take decision on which processor to choose, also I believe useful to share.

              Do you think/know credit card payment with a system such as stripe is more for luxury products? I think, but I might be wrong, that luxury target customers might not be familiar with a technology like paypal as they won’t spend their time by crating an account for that but they just use to put credit card details.

              If so this should be also considered before choosing your favourite payment processor.

              What’s your idea?

              All best!

                Melissa Johnson

                Hi, Raffa!

                I don’t necessarily think of Stripe as a “luxury” option for payments, but it’s much more modern. PayPal came into prominence at a time when lots of people were still very wary of buying online and the idea that paypal hosted the checkout process and redirected you to the paypal site to complete a transaction actually helped win over consumer trust. But PayPal hasn’t significantly changed its model two decades later, and now a lot of consumers are much more trusting of online shopping. So redirecting to the PayPal site might be more of a hassle for some consumers. That’s why Stripe and other payment processors that offer a checkout form for your own website tend to focus on how modern and customizable their options are.

                It’s also worth considering that some 200+ million people have PayPal accounts and use them on the regular, so even if the system isn’t exactly sophisticated compared to some competitors, if your customer base likes to use paypal, you should probably consider adding a paypal checkout option. and PayPal does have an “express checkout” option for precisely this purpose.

                Thanks for your questions!


                  Nice review.

                  What is the best vendor to process virtual card payments (low volume of transactions (5 per month) and each transaction might be $100-$750) USING a virtual terminal only? I sometimes get paid for my consulting services by corporations with virtual credit cards rather than checks so there is no swiping and only manual entry. For whatever reason, SQUARE could not verify my identity despite accurately inputted information so that I can do credit card payments.

                    Jessica Dinsmore

                    Hi Dave,

                    In terms of virtual terminals, offers a pay as you go plan. If that doesn’t seem like a good fit, I’d suggest looking into invoicing solutions like Zoho Invoice or possibly Quickbooks Payments. Hope that helps!


                      Hi Melissa,
                      Thanks for sharing such a comprehensive review.
                      Im a personal trainer and about to launch a fitness magazine online and I need to make it profitable via recurring payments. If its not abusing of your kindness, i would like to know your opinion. If not possible, where else could you refer me to find reliable education/information. Thanks for reading. Will

                        Melissa Johnson

                        Hi, Will!

                        I think Stripe’s subscription tools are going to be a better fit for you (so long as you have a developer with the tech experience), but you should be wary of what content you put behind a paywall. I’d double check Stripe and PayPal’s terms of services and prohibited businesses just to make sure you’re in the clear!


                          I’ve used Paypal for years but I lose a lot of sales as customers lose interest or get confused during the Paypal payment process. Is Stripe more streamlined than Paypal? This would be my deciding factor as the 2 options seem pretty equal with exception to Stripe not refunding processing fees. However, I most sales completed successfully, it would be worth losing those fees.

                            Melissa Johnson

                            Hi, Amy!

                            I assume when you say customers “get confused” that PayPal’s page redirect is what throws them off? If that is indeed the problem, I do think Stripe could be the better option for you. Stripe has a pre-built form (Checkout) that you can simply drop into your website with a few lines of code, but you can also create a custom form using Stripe Elements. That’ll take a little bit more technical knowledge, but it might be worth pursuing for you.

                            Hope that helps!


                              Great article and details! Quick question! Is the recurring billing for Paypal the same thing as recurring donations? I’m looking to switch out my church’s merchant services from Square to Paypal for ease of integration to our church website, and I want to setup a donation button. I like the idea of Paypal supporting a recurring donation, but if it costs $10/month, then this may be too costly. Thanks!

                                Melissa Johnson

                                Hi, Jimmy!

                                Quick disclaimer: I don’t have a nonprofit PayPal account myself, so I’m not 100% certain. However, when you create the donate button on your site it automatically includes an option to give on a monthly basis. Recurring billing tools are something you have to set up yourself. So I don’t think that PayPal will charge you a monthly fee for the recurring donations. PayPal is also usually pretty good about disclaimers and transparency, so I think they’d mention if that were the case. (If you wanted to create a tiered membership subscription with perks, that would be a different matter entirely.)

                                If you’re switching to PayPal, make sure that you get verified and that you’re getting PayPal’s discounted nonprofit rate (2.2% + $0.30 versus 2.9% + $0.30 for standard transactions).

                                Hope that helps!


                                  Thanks for the review, Melissa! I looked over your content and growing comments forum with interest. Can you share any insight regarding the 2 providers’ practices for helping(?) merchants deal with chargeback situations? PayPal reps state that merchants are 100% protected from buyers to resort to chargebacks if products have been described clearly and shipments are tracked and shipped to verified buyer shipping address. Wondering if anyone here can confirm this PP policy in actual practice, or weigh in on Stripe.

                                    Marilyn Fowler

                                    When using swipe …does the money get deposited in your checking or is it similar to PayPal that you would do s manual transfer of funds to your company checking?

                                      Melissa Johnson

                                      Hi, Marilyn!

                                      Stripe transfers funds to your bank account once the transactions clear. It’s not a digital wallet like PayPal is.

                                        Misty Smead

                                        Does anyone know if the stripe offers a business MasterCard debit card like PayPal Does?

                                          Melissa Johnson

                                          Hi, Misty! Stripe doesn’t offer a business card. I think that’s because by default Stripe routes funds to your bank account, whereas PayPal keeps them in a digital wallet that was previously only accessible to online purchases. The debit card makes it easier to spend the PayPal balance anywhere, negating the need to transfer funds out of PayPal and to a bank account. That’s the same reason Square doesn’t offer a debit card for merchants — but it does offer a debit card for its Cash app (which is also a digital wallet).

                                          Hope that helps!

                                            Brad May

                                            Thanks for writing this! What an excellent piece of work and research!

                                              Henry Courbis

                                              I use Stripe and so far have only found one major issue which they seem to hide. You also did not seem to know about it in your well written article.

                                              When I refund a customer Stripe DOES NOT refund the transaction fees. Any of it. See here:
                                              “You can issue either partial or full refunds. There are no fees to refund a charge, but the fees from the original charge are not returned.”
                                              It’s not mentioned at all here:

                                              Very sneaky indeed Stripe! I thought you were trying to be better than PayPal? Guess not.

                                              So users should be aware if they refund a customer they will out all of the transaction fees. Stipe will not refund ANY of the 3.9% or the $.30 charge. PayPal on the other hand will. As much as I hate PayPal this is a major reason to use them as a seller. $500 sale is $19.80 you will never see again – unlike with PayPal’s $.30. HUGE difference!


                                                I just found this out!! very sneaky indeed. I am also managing a Vacation Rental business that has cancellations as part of it’s business. Now the owners have to EAT the fees. Am looking for an alternate system.
                                                Also in my e-commerce business, I have had 5 or 6 Fraudulent transactions a year. Stripe does not have Fraud protection….I have lost alot of money by shipping out our product (a $2500 product) and then receiving a chargeback which has never got resolved in our favour.

                                                Looking for another better payment processor.


                                                  My problem with PayPal is the support. While phone support is nice, first you must convince the PayPal robot to let you talk with a person. Once you get a person, they are located overseas in countries not even subject to our laws. I don’t know about everyone else, but I don’t like handing access to my personal and financial accounts and information to someone not subject to the laws of my country.

                                                  I often have trouble simple understanding their speech as we have different languages; PayPal support is located in the Philippines and I in the U.S.A. That said, I still end up getting a rep who has no authority to do anything for me, or pretends to, and normally only offers me canned or standard responses from a book of policy. I am looking for humanity these days coupled with good sense and common decency, not corporate policy.

                                                  So, these days, I am making some changes in business. Most important in our sights is placing all of our accounts into the hands of Americans with U.S.A. based customer support. It’s not an easy task for many companies love to deceive just to land your business (get that money!), especially in Europe. At present we are moving hosting account because we were lied to by our current provider who assured us in advance that they and all servers and service were U.S. based and I find after the fact that they are in fact, operating from Germany and soon after signing on, they turned to Philippines based customer support as well.

                                                  The article seems a fair and unbiased review of the products and services but I do see a slight tendency in your article of leaning toward PayPal for personal or professional reasons. Very informative and thorough. I appreciate the info very much. Even the comments contain some handy info to know. Hopefully, someone might find my info of some value as well 😀 Thank you


                                                    I agree with your comments about PayPal asking for documents and then asking for others. When told that those documents are not issued in this country, they revert back to boilerplates replies. Even when you get a chance to speak to one of their supervisors you get the same response. They are now refusing to release nearly USD$1500 because we cannot supply the forms requested because they are not available. And they never told us any of this when they opened the account and initially took the money. Sounds like PayPal and Stripe operate on the same principle.

                                                      George Aweanung

                                                      PayPal sucks so much, I did business on eBay then out of nowhere the account was limited and all my customers were stuck with payments, I provided them with documents and they limited my account further, then I closed every business with them but they still have 300 bucks of mine laying there, now I am moving onto stripe.


                                                        PayPal chooses what the rules are after the fact. Requiring documents after they have collected monies without upfront notification is in my view fraud. This is especially true when you trying to deal with people who are making the document demands without their understanding the documents they are asking for do not exist. They should require all the documents they require BEFORE they allow the account ot be opened and used.


                                                          Shannon, you provided some great information. Thanks!
                                                          I’m just getting started on creating a marketplace and doing research. Will stripe automatically split the payment between me and the seller? Is there just one fee for the payment processing or do I pay a fee for payment processing and a fee to transfer funds to the seller?

                                                            Jessica Dinsmore

                                                            Hi Tracy,

                                                            We can’t definitively answer your questions since it will depend on how you set up your marketplace. We’d suggest you check out Stripe’s resources here, here, and here. Or contact them directly to ask your questions. Hope that helps!


                                                              Did Stripe give working capital loan,base on your sales like PayPal and Square.

                                                                Jessica Dinsmore

                                                                Hi Soji,

                                                                No, Stripe doesn’t operate that way. I think you’ll have better luck finding what you are looking for in our business loan category.


                                                                  Having just compared pricing for transactions with Paypal v Stripe, and stripe being nearly 50% less than Paypal, I’ve just deactivated Paypal! Will see what customer feedback I get as to whether this is a permanent fixture.

                                                                  e.g. £17.98 transaction – 72p fee with Paypal, 45p with Stripe
                                                                  £47.99 transaction – £1.59 with Paypal, 87p with Stripe.

                                                                    Gino nmn Fina

                                                                    Thanks Melissa,,

                                                                    Great research and terrific presentation.

                                                                    Would a company that uses internal messaging and payments such as Airbnb benefit one way or another between Stripe & Pay Pal? Because my new company is similar in structure to Airbnb and based on trust, so I’m a fan of the trusted name and the credit card verification that Pay Pal offers, but my developer likes the functionality of Stripe. I’ve asked 10 people today if they’ve ever heard of Stripe, all said no. What is your opinion about the importance of the recognized Pay Pal brand as marketing goes to the baby boomer generation?


                                                                      Melissa Johnson

                                                                      Hi, Gino —

                                                                      PayPal has more of a household name status, but that doesn’t necessarily mean that Stripe is a nobody. Thanks to its partnerships with some major industry players (Shopify, for example), Stripe is massive, and handles an enormous load of credit and debit cards for processing. A 2016 Forbes article says 27% of Americans have made a purchase through Stripe; I’ve seen reports of much higher numbers. In fact, it’s most recent valuation puts it at $9.2 billion dollars.

                                                                      And Stripe is definitely the most dev-friendly option out there. (That’s not to say PayPal and Square don’t have dev tools. They do.) I am not surprised your dev favors Stripe; the whole service is designed for developers first and foremost.

                                                                      PayPal has such easy recognition in part because it’s both a consumer service and a business service. And it’s been around for over 20 years at this point. Stripe is a lot newer and tends to operate more behind the scenes, and it’s not a consumer service, either.

                                                                      I unfortunately don’t have a lot of perspective on which one Boomers would be more likely to trust. I’m inclined to think it makes less of a difference to them so long as you can make them trust the site on the whole.


                                                                        Great info! U left off whether Stripe has an atm card with an electronic chip that will work in the rest of the world (paypal doesn’t) and that’s the one thing I wanted to know. Earlier this year I was unable to receive funds from paypal thru the atm outside of America because paypal, being CHEAP doesn’t want to send their customers, millions I’m thinking, new cards… that’s expensive. I get it but they make a lot of money and it’s the cost of doing business.

                                                                        Somehow they got yet ANOTHER extension from the EU banking systems on top of the one Prez Obama gave them the year before. I don’t know when they will finally join the rest of the world but if Apple is using Stripe, I assume they have international Mastercard/Visa.

                                                                        I’ll check it out on their site directly. Thanks for the info about Stripe vs Paypal. It’s good to know that the bottom line is 6 of 1 half a dozen of the other!

                                                                          Jessica Dinsmore

                                                                          Thanks for your feedback! Unfortunately stripe does not yet offer an EMV chip card.

                                                                            Bradford Cathey

                                                                            I’m a developer (client and server side) and have dealt a fair amount with both PayPal and Stripe support. My experience: PayPal is frustratingly slow and uninformed, not for developers; Stripe is fast, helpful, and knowledgeable. We bailed on PayPal because I couldn’t serve my clients with the lousy support I was getting. We are Stripe all the way.

                                                                            That said, you are correct: Stripe requires programming knowledge to get up an running. I’m experienced and had trouble with my first one (though Stripe support was amazing).


                                                                              Very nice article, exactly what I needed.
                                                                              One issue I had: I’m in the US and selling to companies in Europe (not individuals) is a nightmare of taxes and paperwork. Paypal and Stripe can’t help there. I found one company that does: Paddle. They charge more (5%+50c), but they take into account all taxes in Europe and Japan.


                                                                                can Strip suppport Split payment? is there supported in Portugal and brazil.?

                                                                                  Chloe Bahal

                                                                                  Hi Uzer,

                                                                                  Stripe should be able to support split payments but access in Portugal and Brazil are still in Beta testing, but you can be notified when it launches here.


                                                                                    can Sprite Support Split payment? is there supported in brazil and portugal?

                                                                                      Chloe Bahal

                                                                                      Yes, Stripe can support split payments but unfortunately at this time, access in Brazil and Portugal have not yet released and are still in beta testing.


                                                                                        This review does not cover a huge issue for EU customers – data protection…
                                                                                        In general people in the EU do not trust the poor data protection in the US and the reselling of information that happens as a result. Paypal has been forced by EU law to warn all customers that if they use Paypal, their data is being transferred to the US. This leads to cart abandonment. I have a query into Stripe at the moment because even if you turn off Paypal on Shopify, you still get that warning. Not sure if it’s a Shopify or a Stripe function as yet but I’ll let you know if I find out.


                                                                                          Hi Imogen, did you ever find out how stripe handles the EU issue?

                                                                                            Tom Rubens

                                                                                            Thank you so much for this review, Shannon! This was exactly what I was looking for, and I have no need to read another review. You nailed it!


                                                                                              Thanks Shannon for the article, great explanation! But isn’t it that most of the merchants are working on ecommerce features and simplified setup? I was thinking about these two options before, but since my business is in Europe, I have chosen Cardinity (, not so well know brand as PayPal or Stripe, but service is good and price is lower. Sometimes it’s worth trying something new, not only most popular brands.


                                                                                                Very informative Shannon. Thank you. Is it true that Stripe has the option of installment payments, while PayPal doesn’t. In other words, if I am offering my clients 2 options, pay now in full, or pay in 3 installments, then Stripe has an automated payment option for installments and PayPal cannot. That would bet an advantage for Stripe. Is that true?

                                                                                                  Andrew Walsh

                                                                                                  Hi Shannon… thanks for an informative article – great job!


                                                                                                    Can anyone tell me if Stripe will allow payments via paypal adaptive inside their system?


                                                                                                      Hello, can you tell me if Stripe allows you to manually enter credit cards in the system? It is a pain the booty with PayPal

                                                                                                        Chloe Bahal

                                                                                                        Hi Judy,

                                                                                                        Yes, you can manually enter credit card information with Stripe:


                                                                                                          Thank you for the comprehensive article. The information is very helpful for sellers who are undecided which payment method to choose between the two.

                                                                                                          Do you have any comparison of these two payment methods from the buyers’ experience? If a buyer is presented with these two payment options during checkout, which payment method would they prefer? What would the pie chart split between the two look like?

                                                                                                            Tom DeSimone

                                                                                                            Hi Allan,

                                                                                                            It depends on how the business chooses to integrate the payment service – whether the merchant chooses to use the hosted payment page option or integrate with some other shopping cart or use one of the other options offered by both PayPal and Stripe. With both services, the merchant can have a lot of control over the appearance if they want to. But in terms of the easiest most basic integration options, I think Stripe tends be a little cleaner. Although of course PayPal’s payment processing makes it easier to accept PayPal payments.


                                                                                                              Thanks Shannon !! really the best understanding I got through your precious arrangement of words.

                                                                                                                Shannon George

                                                                                                                Terrific, thanks for reading! Glad I could be of help.


                                                                                                                  Thanks Shannon – great write up!

                                                                                                                  I have a question: I’ve narrowed my options between these two processors, but was wondering about Paypal’s tolerance for Marketplace websites. I’ve heard that, in general, payment processors don’t like Marketplaces because the site owner and the providers of goods/services are not the same and it is believed that it leads to more disputes/chargebacks/etc. Stripe Connect has specifically stated that it is made for this type of business, but I haven’t seen anything like that for Paypal Payments Pro (PPP). I’m hesitant to use PPP if there is a chance that they either won’t approve me or will close my account down at some point for this. Any insight into how Paypal views this?

                                                                                                                    Tom DeSimone

                                                                                                                    Hi Jason,

                                                                                                                    You are correct. Most marketplace businesses bring more risk to the table than conventional online sales. This is true no matter which company does the processing. With higher risk comes a greater chance of having funds withheld or, worst-case, the account terminated.

                                                                                                                    It’s difficult to say whether Stripe or PayPal would be more prone to account instability for marketplaces. I’d say that PayPal (especially via PPP) is more stable overall, but I honestly haven’t heard from any marketplace-style sites using that platform. Have you considered Braintree? It’s a company owned by PayPal that offers marketplace solutions. It might be a good alternative for you.


                                                                                                                      Thanks for the response, Tom.

                                                                                                                      I actually called PayPal today and asked them flat out how they view marketplace sites and they said that their PPP product is not allowed to be used with that type of site. So, that is a no go. However, their Adaptive Payments product does allow it – unfortunately, they redirect to the PayPal domain during checkout which I don’t want.

                                                                                                                      Stripe Connect is my leading option right now as it is specifically set up for marketplace sites. Good call on Braintree as well – I stumbled upon them earlier, but haven’t really researched what they offer, but they appear to be focused on marketplace sites as well. So, that seems like another solid option.

                                                                                                                        Nathan Hanlon

                                                                                                                        Jason, I’d love to hear who you went with (Stripe Connect (standalone), Braintree or PayPal adaptive payments).

                                                                                                                        I’m looking into the same thing right now. I might be off with the following notes, please feel free (anyone) to advise on comments or your experience with these platforms.

                                                                                                                        Stripe Connect (Standalone accounts, not the managed accounts):
                                                                                                                        Pros: merchants communicate with Stripe for issues, my app is not routed anywhere for payments (seamless, great UX), split payments for my fee. I don’t have any web, cart, sales.
                                                                                                                        Cons: no credit card verification, very limited merchant support.

                                                                                                                        PayPal adaptive:
                                                                                                                        Pros: Merchant support, verified customers (using a pay pal account), split payments for my fee.
                                                                                                                        Cons: my app is routed to PalPal for verification & payments (not ideal), expensive due to monthly fees for me and my merchants.

                                                                                                                        PalPal Braintree:
                                                                                                                        Cons: I have to manage all merchants for refunds. deal killer…..



                                                                                                                          I talked to Braintree and they only support marketplaces that are focused one aspect

                                                                                                                          For example if your website is a marketplace where sellers can sell electronics then you have to make sure all sellers are selling electronics, cannot sell other categories of items.

                                                                                                                          The best choice right now for a marketplace website is to use stripe connect standalone accounts, that way sellers are responsible for any chargebacks and bot the platform. I’m sure as long as any seller follows the stripe tos correctly, they wont get shutdown for no reason

                                                                                                                          A lot of complaints you see about stripe are from shopify users who do drop shipping when drop shipping is clearly not allowed according to stripe TOS, so shopify is really misleading a lot of merchants by marketing how great drop shipping is, but also don’t tell merchants that it is a high risk business according to stripe


                                                                                                                            Very useful post!


                                                                                                                              Thanks Shannon, really usefull.


                                                                                                                                Thank you, Shannon! The clearest breakdown I’ve found.

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