Your shopping cart is empty!
When it comes to online transaction The Top two credit card processing companies are Stripe and PayPal. They both are king of the online industry. But who is actually better? This is what we will be talking about today. For our Custom t-shirt Business, we have used both and we will give you some insight into some of the issues that we have faced with these companies. We will also give you some insight into some of the things that we love about Stripe and PayPal.
If you are just starting your website and you are using a website platform like WordPress or Magento or Opencart on whatever other Content Management System you may be using you are probably looking for the best gateway to receive your money. If this is your first website and you know nothing about coding at all, I am going to say you may find it easier to use a PayPal Plugin. Most PayPal plugins come on your Content Management System Pre-packed in with the installation.
If your Content Management System is Shopify then you should already have Stripe Payments or should I say Shopify Payments that is a repackaged stripe processor. If you want to use PayPal on Shopify there is a plugin that you can use also. We will talk more about this later. Back to what you really came here for.
Both Stripe and Paypal has the same transaction fee unless you are using PayPal standard. If you choose PayPal standard then you only have the 2.9% fee without the transaction fee.
Stripe has better customer service at this time. Now that stripe has made it possible to receive a call from them the hold time is usually less than 6 minutes. They also have a chat module on their website so if you don't feel like talking you can instantly get responses right on their website. Sometimes you can get good customer service with PayPal if you can get through with the American based call centers. If not expect to have a headache before you get off the phone.
Did we forget to mention that Stripe has 24 hours a day 7 days a week customer support? Yes, that's right, You can have a stripe agent call you at any time. You can also just use instant chant with a stripe agent.
PayPal has faster Payouts. At one point if you wanted to receive your money to the bank it would take at least 5 business days. PayPal did, however, offer you their PayPal Debit Master card that you could receive your money on instantly. You also get 1% cash back every month when using your PayPal Debit Mastercard for transactions. PayPal now has an option that you can get your money to your bank account instantly. No more waiting. I transferred some money from my PayPal account and looked at my bank account and in less than 3 minutes I had the money in the bank account.
Stripe pays out your money fairly quickly now also compared to the 7 business days that it used to take. Now you can get your money in 2 rolling days. That means that every 2 days you get the money that you made 2 days ago. So you can receive a payment every day except on holidays and weekends if you have payments coming in every day. The 2-day payout feature may only be available for USA based Customers.
PayPal is easier to use when it comes to integration. Most shopping carts already have a plugin feature for PayPal. With Stripe you will most likely need a plugin from a 3rd party. PayPal also has a shipping feature inside its website that makes it easy to deduct the shipping cost right from your account. The only problem is that you are not able to ship to a different location other than the shipping location that is confirmed by PayPal. So if your customer made an order and wants it shipped to their hotel while they are on vacation and they decided to leave earlier you must ship the item to a hotel to be considered protected.
If you are using Stripe then you have the option to plug in a 3rd party shipping option but I find it easier to just plugin ship station with your CMS. I found out that I have been missing out this whole time.
Yes, Both Stripe and Paypal have limited protections against chargebacks for you. PayPal also has a system set up through their website that can avoid chargebacks by letting customers dispute with them. You have a better chance of winning a dispute through PayPal System then if they actually do a chargeback with their Bank or Credit Card Company. PayPal will cover you however for Fraudulent chargebacks and Item not receive complaints. They will pay you regardless of the outcome if you can show tracking information that is delivered. If PayPal does not cover your Chargeback under seller protection they will charge you an additional $20 plus the disputed amount.
Stripe charges you a $15 dollar chargeback fee and if you win the case they refund the fee back to you. Stripe just like PayPal has an area on their website where it shows you the disputed amounts. PayPal disputes will be found in the resolution center and Stripes under the Disputes.
Both PayPal and stripe are very secure. Both are PCI Compliant. To take payments on your website using stripe you should have an SSL Certificate on your website. If you are using PayPal standard then you may not need an SSL because you are not actually taking the payment on your website. Your customer is being transferred to PayPal's website where the payment is made and then the customer is then transferred back to your website.
You can accept payments over the phone if you are using stripe. PayPal does not give you this option as far as I know. Both PayPal and Stripe have the option to send you the customer an invoice via email. You can type out what you are charging and the price just like a regular invoice. PayPal's invoice system might be a little bit simpler because with stripe you need to make them as a customer on their first. Both PayPal and stripe have the ability to assign recurrent payments. Did we mention that PayPal also has an option that lets customers purchase from your website while using their credit to be approved for the sale? Customers sometimes have an option that they can choose to pay back Paypal in two weeks for an item that they are buying. This can make using PayPal irresistible when it comes down to buying stuff from your website.
If you are going to be accepting donations you might consider using stripe. Both PayPal and Stripe have the options but PayPal is also known for parting ways with you and locking down your money for 6 months.
Stripe accepts Both apple pay, Google Pay and Bitcoin. As a matter of fact, Stripe accepts a lot more payment methods than PayPal Does. So if Crypto-currency or is important then you will want to use Stripe.
To be honest both are great to have. You can actually set up most websites to accept 2 different payment forms. Set your website for Credit Card and Paypal at check out. If you are only going to choose 1. I would choose PayPal. That is only because they offer you your money instantly. I also love that they give you 1% back with their PayPal Debit Master Card and that you can send your money to your bank in less than 3 minutes.
If you do not mind waiting 2 days for your money then Stripe is great. You can accept a lot more payment methods and you also are able to take additional payment if you are on the phone with a customer that wants to add something else to their order. You will find that there are a lot of people that just simply do not want to deal with PayPal. I have had customers tell me this before we added Stripe. Because this was our only payment method at the time we lost a few sales.
You will also find that Sellers have also had problems with using PayPal and that PayPal will limit your account and hold your money for 6 months. This can be a huge problem for sellers if this happens to you. The great thing that they both offer is there are no contract fees and you can cut either off at any time without a cancellation fee.
Stripe is a fully customizable checkout solution. The only thing is that you will need a developer to create it exactly how you want it. Stripe is meant for Real Small Businesses. PayPal Standard is a great solution for ease but your customers will be taken to PayPal's website. This can be an issue for some as this makes your website seem unprofessional.
I love that Stripe has easy to use instant chat. PayPal is making it harder and harder to get in touch with customer service agents. So much that I have had to wait on hold for over an hour.
The problem with both Stripe and PayPal is that they are both 3rd party Processors. This means that they may freeze your account and hold your funds at any given time. That may mean that a traditional Payment gateway may be a better option for you. Depending on what you are doing a high-risk gateway may be an even better option. If you are looking for another payment gateway Square is a contender that is coming up in third place right behind the 2.
WWhile using PayPal they will sometimes loan their customers money based on the number of sales that they have coming through. These loans can be used for equipment or marketing or anything else that is going to help your business out. This can a huge benefit for why someone would like to use PayPal over any other processing gateway. They have an angle in every possible way. These PayPal Working Captial loans do not even run a credit check. Everything is based off your account history and the amount of money that you bring in every month. Also, PayPal Working capital is paid back in a percentage that you choose. It comes directly out of the future payments that you recieve. So if you have an order for $1000 you can have your loan set to only take 10%. There are no missed payments for you to worry about.
Between the two PayPal is more Popular and PayPal represents for more than 60% of the online payment gateways used. Stripe represents around 20%
Like always if you have any question or comments please feel free to let us know in the comment section below.