Stripe vs. PayPal: Differences, pros and cons in 2024 (2024)

To keep up with consumers’ demands, business owners rely on online processing providers to process digital payments, including credit card payments, swiftly and securely. With many providers to choose from, which one is right for you?

We compared the biggest names in the business, looking at factors like their fees, customer reviews and customer service. Based on our research, we were able to identify the providers that offer the best bang for your buck while still meeting essential needs, like customer service. Below, we provide a detailed analysis of two of our top contenders, Stripe and PayPal.

Stripe vs. PayPal: Quick overview

Stripe and PayPal are two of the best-known names in credit card processing. In our ranking of the best credit card processing companies, Stripe claims the number two spot, while PayPal comes in number three. Both Stripe and PayPal provide a simple and secure means of processing credit card payments—however, they do differ on essential points.

We compared the two platforms on key criteria, including customer support, software integrations and transaction fees. If you’re a business owner trying to decide between Stripe and PayPal, the below guide can help you determine which one is right for you.

Pricing and fees

Verdict: Stripe

Stripe and PayPal both offer clear payment structures, so there’s no guesswork as to what you’ll be charged. Neither provider charges a monthly fee; instead, there’s a per-transaction charge. Although there isn’t a huge difference, Stripe costs moderately less overall.

Stripe pricing and fees

Stripe charges the vendor 2.9% per online transaction, plus an additional $0.30 flat rate. For transactions that involve swiping a card or reading a chip, the fee is the same, at 2.9% plus 30 cents. Expect to pay a bit more for a keyed-in transaction — when the card information is manually entered — with a fee of 3.4% plus $0.30.

Stripe charges a flat fee of $15 per chargeback (disputed payment). However, once you’ve been with Stripe for six months, you may qualify for their chargeback protection rate of 0.4% per transaction.

Paypal pricing and fees

PayPal charges a 2.59% fee for online transactions, plus an additional fixed fee, which is determined according to the currency received. For payments in United States dollars (USD), that fixed fee is set at $0.49. For swiped or chipped transactions, the fee drops slightly to 2.29% plus $0.09. The keyed-in transaction fee is a bit pricey at 3.49% plus $0.49.

For chargebacks (disputed payments), PayPal has a flat fee of $20.

Hardware features

Verdict: Stripe

Both PayPal and Stripe offer a point-of-sale (POS) terminal, which merchants can use to collect card payments. While some providers offer free POS hardware or credit card readers, PayPal and Stripe charge for theirs.

This equipment can be linked to POS software that tracks payments, among other things.

Stripe hardware features

Stripe has various readers to choose from, including compact mobile readers, Android-based smart readers, mobile readers with a PIN pad and tap-to-pay readers. All Stripe hardware devices offer Europay, Mastercard and Visa (EMV) certification, end-to-end encryption and cloud-based ordering. Through Stripe Terminal, you can integrate the hardware with POS software.

The Stripe Reader M2 ($59) is a small mobile reader that pairs with your POS device to accept payments. Features include:

• The ability to accept EMV chip cards, contactless cards and digital wallets and Magstripe cards.
• iOS, Android and React Native (beta) integrations.
• On-receipt tipping.
• USB-C port charging.
• 28 hours of active-use battery time.

The BBPOS WisePOS ($49) smart reader is suitable for countertop or handheld use and features a touchscreen display. It also offers:

• Customized “splash screen” (the customer sees on the device). For example, you can add a business logo.
• iOS, Android, Javascript, React Native (beta) and server-driven integrations.
• On-reader tipping.
• 12 hours active-use battery time.
• PIN support.

The Stripe Reader S700 ($349) is an Android-based smart reader for handheld or countertop use. This device offers:

• Splash-screen customization.
• iOS, Android, Javascript React Native (beta) and server-driven integrations.
• On-reader tipping.
• 15 hours of active-use battery time.
• PIN support.

PayPal hardware features

PayPal has two main types of hardware to choose from, the Zettle Reader 2 and the Zettle Terminal. The Zettle Reader 2 ($79) reader can work with the PayPal Zettle app or another POS software. You download the app/software to your smartphone or tablet, and then pair the device with the PayPal Zettle card reader. It features:

• Quick set up.
• Bluetooth connection.
• Battery life of up to eight hours.
• Receipts that can be printed or sent through text.
• The option to tap or insert a card.

The Zettle Terminal ($199) has PayPal’s software built in. There’s no need to download an app or pair with a phone or tablet. With Zettle Terminal, you can:

• Collect payments.
• Check and update stock levels.
• Manage inventory on the go.
• Scan barcodes for faster checkout.
• Use a single dock for printing and charging.

Software features

Verdict: Tie

Physical card reader terminals like the ones offered by Swipe and PayPal are linked to POS software. We like PayPal’s user-friendly proprietary POS software, which eliminates the need for coding or integrations. That said, Stripe offers a greater number of integrations; if you already have a POS tool you love, you may prefer this option.

Stripe software features

The payments you collect with your Stripe equipment can be integrated into your existing POS system through a Stripe Terminal. The simplest option for newbies is a no-code POS solution that’s already integrated with Stripe Terminal, like Shopify, WooCommerce or Wix. You can then manage your products, view sales and track stats.

Stripe Terminal isn’t an “out of the box” software solution; you’ll need some programming experience to integrate it. Stripe Terminal’s developer partners — such as Ciklum, Square 1 and Happy Cog — can help.

PayPal software features

PayPal has free proprietary POS software to accompany its hardware options. Through the PayPal POS software, you can organize your product catalog, manage sales, control inventory and get detailed sales reports. PayPal likewise integrates with a number of third-party POS systems, including:

• BigCommerce.
• Intuit by QuickBooks.
• SalesVu.
• WooCommerce.
• Hike.

PayPal’s proprietary software is simple and easy to set up, especially if you opt for the Zettle Terminal with the PayPal software built in. If you already use a third-party provider like WooCommerce, you can use the given application programming interface (API) integration.

Customer service

Verdict: Stripe

As a business owner, you don’t want to be left in the lurch if something goes wrong with your payment system. Both PayPal and Stripe offer comprehensive customer service, including human customer service, sparing you the run-around of chatbots. That said, Stripe wins points for its 24/7 offering, while PayPal’s hours are more limited.

Stripe customer service

Stripe offers 24/7 customer support. Contact them through email, and you can expect a response within 24 hours. You can also speak to a human representative through chat (English or Japanese only) or request a phone call (English or Japanese only).

The average wait time when requesting a phone call is three minutes. One drawback is that Stripe doesn’t have an inbound customer support number you can call.

PayPal customer service

You can contact PayPal for support through a direct inbound customer service hotline. Customer service hours are 7 a.m. to 10 p.m. CST Monday through Friday and 8 a.m. to 8 p.m. CST on Saturday and Sunday.

Alternatively, you can message to chat with PayPal Assistant immediately or leave a message and have an agent get back to you. PayPal wins points for the fact that it has an inbound number to call. That said, the limited operating times may be a nuisance for some.

Final verdict

Winner: Stripe

PayPal has some notable assets, such as user-friendly software and hardware. That said, Stripe offers a greater diversity of payment processing hardware and POS software integrations.

Stripe also offers more diverse customer service options, plus 24/7 care — although it lacks the in-bound telephone contact offered by PayPal. Overall, we like Stripe for its versatility and the fact that it’s slightly more cost-efficient than PayPal in terms of fees.

When it comes to app store ratings, PayPal and Stripe are almost neck-in-neck. Both providers have a 4.7-star rating on the Apple App Store — although we should note that PayPal has upward of 185,500 reviews, compared to only 41,000 for Stripe.

PayPal has a slightly lower rating in the Google Play Store, with a 4.2 compared to Stripe’s 4.3. That’s based on more than 3.08 million reviews for PayPal and only 20,300 (approximately) for Stripe.

However, app store ratings paint just part of the picture. We also checked out the Stripe and PayPal reviews on respected consumer protection and review sites, like Trustpilot, G2 and Capterra. Here’s a quick side-by-side comparison of how each provider performed:

• Trustpilot: 1.3 for PayPal vs. 2.9 for Stripe.
• Capterra: 4.7 for PayPal vs. 4.7 for Stripe.
• G2: 4.4 for PayPal vs. 4.2 for Stripe.

Further, PayPal has had 33,728 BBB complaints in the last three years, compared to Stripe’s 902.

Who is Stripe best for?

Stripe is an excellent choice if you already have POS software in place and are looking for a partner with versatile integrations. Stripe’s variety of hardware options is also ideal for small businesses that prioritize flexibility. Finally, more established business owners can benefit from Stripe’s customized packages, which offer deals like volume discounts.

Who is PayPal best for?

PayPal is a great choice for new business owners who don’t have a set POS in place and want a simple, user-friendly credit card processing provider with a fast setup. PayPal’s proprietary software is easy to master, and there’s no need to hire developers to configure integrations. The PayPal Zettle Terminal even has the software built in.

Frequently asked questions (FAQs)