Stripe vs Paypal : Which Is Better?

Stripe vs Paypal : Which Is Better?

Stripe vs. Paypal. Today we explore the differences between the two payment platforms. Which one’s right for you?

Well, the short answer is Paypal.

Paypal is used by just about everybody, it’s a long-established brand, it’s what most of your customers are carrying in their wallets. If you want the no-brainer option, go with Paypal. You’ll have a lot fewer headaches in the day to day business.

But, that’s not all there is to it, is there?

Stripe is fast catching on, and you may be wondering whether or not it’s worth the effort to be an early adopter of the service. After all, Paypal can’t maintain their pseudo-monopoly forever. Give it another five years and Paypal will be just one of the dozens of options for people looking for an easy way to manage their payments.

Stripe vs. Paypal

So the question is really:

Is Stripe ready to compete with Paypal?

So here’s the slightly longer answer: Stripe has a lot to offer the business owner that Paypal simply does not at this point.

Does Stripe Offers Lower Fees?

Switching to Stripe might just save you a few bucks in the long run. Paypal charges thirty dollars a month to use charge cards on your website, there’s a fixed fee for refunds, a one percent fee on international cards, thirty cents to authorize a card, ten dollars a month recurring billing, and ten dollars a month advanced fraud protection. All of this is free with Stripe.

Chargeback is five dollars cheaper with Stripe, at fifteen bucks. Paypal doesn’t accept Apple Pay, Stripe accepts it for free, and Stripe offers flat rates on many cards where Paypal takes an extra cut.

These fees may not sound like much, and they may not be at a small to medium-sized business. Ten dollars here, five percent there, it’s not enough to make or break a business. But over thousands, millions of transactions, it can add up to quite a bit of money. Many large businesses stick to Stripe for this reason. The money saved by switching to stripe, given a large enough company, can at least make for a larger Christmas bonus next year. For smaller companies, an extra fifty or a hundred dollars at the end of the month is nothing to sneeze at, either.

The difference in costs is admittedly marginal, but it can be a pretty wide margin given certain factors.

Paypal is faster than stripe

Paypal Is Faster

If you’ve been using Paypal, then you know that it usually transfers your money within a day. It can take longer, but that’s usually owing to various errors and malfunctions. By and large, you can expect the money to get where it’s going in twenty-four hour or less.

With Stripe, you can expect a two-day transfer in the US or Australia. Outside of these countries, Stripe operates on a weekly basis that varies from place to place, and it can take you up to seven days to get your money. This can be a major problem for a number of reasons. There are some opportunities that simply won’t wait for seven days. If you need to buy extra stock of something before the price skyrockets, seven days is a long time to wait. The extra time can really cut into your profits in some cases and wind up costing you a lot more money in the long run.

If you work in the US or Australia, and you don’t have any international dealings, the two-day transfer is usually fine. The seven-day transfer can be a serious problem if you live elsewhere and work in an industry that moves a little quicker than that.

Paypal Is Playing Catch-up With Stripe’s API

One of the reasons people have been switching to Stripe: The API. Stripe’s API Interface is top-notch and has actually forced Paypal to redesign their own interface in order to try and keep up. If your point of sale software works with Stripe, then you will find the user interface to be incredibly easy to use, and easy to customize. If you’re working with developers to customize your experience, Stripe’s API libraries can be coded in Java, PHP, Ruby, Python and other accessible programming languages. There’s also a lot of documentation available, so you won’t have any trouble getting the hang of the software no matter how computer illiterate you may be.

Paypal Is Also Playing Catch-up With Stripe’s Customer Service

This is why monopolies are a bad thing. For years, Paypal’s response to any customer’s problem was something along the lines of “That’s your problem, not ours.” Call about frozen funds or a bounced payment or something and you’d be on hold for an hour, working your way up the chain of command until you finally get to someone who doesn’t know how to help you, but who has the authority to tell you to buzz off.

This comes down to Paypal’s sheer size as a company. It’s an enormous brand with hundreds of middle management types. Their first response is going to be to not bother helping you to solve your problem because, again, it’s really your issue more than it is theirs, and figuring out who has the authority to fix it is more effort than they want to put in. Or at least that’s the way it was for years.

Paypal is still far from perfect, but they’re trying to improve their customer service relations. They wouldn’t be if it weren’t for Stripe. Stripe’s approach to customer service is surprisingly innovative just by nature of being focused on, well, customer service. A lot of big brands use customer service not to manage customer’s needs, but to manage accountability. They want a phone log they can point to and say “Hey, we tried.” should you ever get in touch with a lawyer or the Better Business Bureau.

Stripe is a smaller brand than Paypal, with a smaller team at work. This means that it takes far fewer steps to get to someone who can help you, and it means that they treat every customer as valuable. You don’t even need to pick up a phone. IRC and email will connect you to a person, not a robot, and they can get you the help you need quickly.

This is going to be the tie-breaker for a lot of people. Many users are looking to jump ship from Paypal because the company’s response to any problems a user has can range from indifferent to stubborn. Paypal has been forced to step their game up because of brands like Stripe, but they still have a tendency to treat every problem as if it’s the user’s fault, and they are generally disinterested in putting more than the minimum amount of effort into helping you.

In short, we could all learn a thing or two from Stripe when it comes to how you treat your customers. To fully address every issue Paypal has with customer service would demand major, costly restructuring, but at least they’re trying.

That said, phone support is lacking. However, you can expect a strong phone support desk to be rolled out soon, if not by the time you read this.



Most of the popular point of sale programs are Stripe-compatible. Paypal is obviously the leader of the pack right now. If you use Paypal, you’ll never have a compatibility issue. But, if you use Stripe, you probably won’t. Some POS systems won’t allow you to use Stripe, but unless you’re really attached to them, then that might just be a sign that it’s time to upgrade to another system.

Other compatibility issues come into play with Paypal. Stripe allows you to migrate to a new platform if need be. Paypal will not transfer credit card data for you under any circumstance. This means that you’re going to lose a lot of customers if you’re already with Paypal and decide to jump ship.

So Who Comes Out On Top?

So with all of these pros and cons laid out side by side, who comes out on top?

Here’s our take on it: If you can go with Stripe, go with Stripe.

Paypal may be the Coca-Cola of online transactions, but that’s really just because they got there first. They come up severely lacking in a lot of areas. They won’t transfer credit card data, their customer service is still pretty dismal, their interface is a pale imitation of Stripe’s, and they charge more for fees.

Stripe is the clear winner in a number of areas. Like that car rental slogan, “We’re number two, so we try harder.”

Stripe benefits from being a smaller brand, able to move more quickly than the lumbering dinosaur that is Paypal. They offer great customer service, fewer fees, great interface, and easy customizability. Most point of sale systems offer Stripe support, and the ones that don’t probably will soon.

There are two big reasons to choose Paypal over Stripe, however.

The first one is that seven day transfer time outside of the US and Australia. If you need your money now, then it’s better to pay a few extra fees than it is to wait around for a full week.

Second is that Paypal kinda has you cuffed to their service if you’re already connected to it. They work very hard to make it very difficult to jump ship. They won’t transfer credit card data and they make it impossible to talk to anyone about getting the issue addressed.

If you’re using Paypal already, and have been for awhile, then you may be better off sticking with them. If your customers really love you, you might be able to send them emails asking them to switch to the new service, but it’s going to be a headache. You might also be able to make a slow migration rather than an immediate jump.

Take Comfort Becuase You Have Plenty Of Options…

The good news is that even if you’re stuck with Paypal and would like to make the switch, Paypal has been slowly making improvements to their service because of the competition brought by brands like Stripe. They’re not running uncontested anymore, and in order to maintain a place in the industry, they have to do better. As they say, a rising tide lifts all boats.

Competition is good. It forces everyone to try a little harder in order to stay in the game. In fact, if your exploring other options Maverick has even lower rates & more business analytics at your companies disposal. To learn more about Maverick Bankcard you can click here or simply click on the image above.


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