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PayPal or Stripe: Which is Better for E-commerce ?

The route for the first time when someone starts a new online store is often packed with many issues. As the world of e-commerce has grown by leaps and bounds over the past century or so, too many associated products and services are accessible. For example, Magento and WooCommerce are both very pop

PayPal vs Stripe

The route for the first time when someone starts a new online store is often packed with many issues. As the world of e-commerce has grown by leaps and bounds over the past century or so, too many associated products and services are accessible.

For example, Magento and WooCommerce are both very popular e-commerce CMS with both their advantages and disadvantages. After a lot of learning and understanding, once you choose between Magento and WooCommerce development, the next significant factor is the payment processor.

But just like any other thing you want for your e-commerce website, there are also several choices when it comes to gateways for payment. At present, PayPal and Stripe are two of the most famous online store’s payment processors. While PayPal has been around for a long time, in a previous couple of years Stripe has attracted a lot of attention.

If you plan to begin a fresh online store or have one already but are struggling between PayPal and Stripe, this article can assist you to make a choice. Based on several significant factors, the two renowned payment gateways will be compared to allow shop owners to select one that best fits their needs.

Let’s get a fundamental concept of what PayPal and Stripe are before the showdown :

What is PayPal?


PayPal, founded in 1998 by Peter Thiel, Elon Musk, and others, can be described as a payment method that can be used to make and receive payments online. It claims to have more than 250 million clients worldwide and more than 20 million merchants accept it in more than 200 markets.

Indeed, whoever receives or sends money online now has mostly a PayPal account. This has made it one of the most popular names in the e-commerce sector, and customers are also recommended by several e-commerce website designers.

What is Stripe?


Stripe is also an internet payment solution based in California, USA. It was established in 2010 and is now more common than many of the other famous gateways that e-commerce shops use to pay. The customizable development instruments it provides are a significant reason for Stripe’s growing popularity.

Online stores with an in-house team of programmers and code-savvy shop owners, therefore prefer to use Stripe over other payment processors. From the lowest business to world-renowned companies like Lyft and Pinterest, Stripe is now being used to collect payments.

Now that you have a fundamental concept about these two payment gateways, let’s compare them quickly to assist you to select the best for your online store.

1 – Transaction & Service fees :


One of the greatest reasons why PayPal and Stripe in the payment gateway industry were able to remain ahead of others is because of their transparent pricing. For each successful transaction, both payment processors charge a flat rate of 2.9 percent+ $0.30.

PayPal has some extra fees for service. For example, PayPal charges an international card fee of 1 percent while Stripe offers it free of charge. Similarly, PayPal is charged for repeated billing, card authorization and advanced fraud protection. All these services are offered for free by Stripe.

The following are some other cost-related elements of the two payment gateways

– MicroPayments :

PayPal costs at a flat rate of 5% + $0.05 for transactions less than $10. On the other side, Stripe also charges the same basic rate for micropayments. That makes PayPal a better micropayment option.

– Chargebacks / Refunds :

Chargebacks are when clients cancel a transaction by contacting the card supplier. PayPal charges a flat fee of $20 for each chargeback or refund, while Stripe charges a $15 fee.

– Receiving payment :

While it’s all okay, when are you going to get paid? When a client purchases on your website, after deducting the charges, the payment gateway you received from the client will pay you the same.

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2 – Currency Support & Availability :


Besides being affordable, you must also ensure that the payment processor you select is available in most countries and supports multiple currencies. You should address all possibilities for constructing a global e-commerce website with your Magento 2 development agency.

PayPal is accessible in more than 200 nations, as stated at the beginning, and it promotes around 26 currencies. On the other side, compared to PayPal, Stripe is a relatively fresh business and is presently accessible only in about 25 nations. But it is essential to remember that more than 130 currencies are supported by Stripe.

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3 – Security :


It is also very essential to be safe on the payment gateway. Even a single client who has any security threat while depositing on your website may ruin your reputation. PayPal and Stripe put a great deal of emphasis on safety and made the gateways extremely secure and stable.

Stripe.js implementation, however, offers Stripe with an edge over PayPal. Stripe.js can be installed on the website when you employ developers from Magento 2. With this, your website server will not be sent all sensitive client data such as credit card information. Stripe will obtain all the data directly so that no sensitive client information is handled by you.

Even PayPal now enables sensitive information to be stored with OAuth 2.0 in a secure vault. His work, however, is as such that your server transfers the information to the vault. If during data migration all of your servers are compromised, there is a chance that sensitive customer credit card information can be stolen.

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4 – Customer Support :

customer support

If you are running an online business, you should be able to contact your payment gateway’s support team as soon as possible. Their unreliable assistance was a significant reason why Stripe lost clients to other payment gateways. That was a thing of the past, though.

There are now several methods to get in contact with Stripe’s support team. In addition to an online help center, email support, and social media, there is 24/7 support through live chat and mobile. But despite considerably improving assistance, many clients are still suffering and their reviews range from excellent, satisfactory to poor.

Unfortunately, even support for PayPal is not really up to the mark in terms of assistance, which is surprising since it has been an established brand for several years now. It has an online community forum, assistance center, support for email, live chat, phone, and social media. However, many clients have stated that getting in contact with a PayPal support executive is often very hard.

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5 – Ease of use :

ease of us

Last but not least is user-friendliness. With Stripe, the customer checkout method is extremely easy. Simply enter your credit card number by a client and press the submit button to access your follow-up or thank you page. You are in the complete flow and design control.

While using PayPal is also easy, some extra measures can be taken depending on how you set your gateway and the kinds of payments that you accept. Some other integrations and alternatives enable you to give payment by credit card directly from your PayPal website.

What should you select?

Now that you know where these two popular payment gateways are in terms of factors that are most important to online stores, selecting one shouldn’t be hard for you. Understand your website’s and your customers ‘ needs in selecting a payment gateway that meets the demands better.

Author Bio :
Jeevan Kumar is a technology enthusiast and a strong believer in agile product

development. He is a Senior Content Strategist of Fortunesoft IT Innovations – Magento Development Company

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Daniel Jack

For Daniel, journalism is a way of life. He lives and breathes art and anything even remotely related to it. Politics, Cinema, books, music, fashion are a part of his lifestyle.