stripe vs paypal_ who should you choose
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482015 Stripe vs PayPal Who should you choose
httpsmemberfulcomblogstripeshyvsshypaypal 14
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Stripe vs PayPal Who should you choose
Youve been hearing more and more about Stripe the hottest new payment processor on the block But what about PayPal They havea trusted brand and a long history of processing payments on the web
Lets do a thorough review of Stripe vs PayPal Well compare each payment processor in five key categories Transaction FeesSecurity API Data Portability Customer Service We wont declare a winner for each category but well point out some of theimportant differences which should help you make a more informed decision
Transaction Fees
Stripe takes a simple approach They charge you a flat rate of 29 + 30cent per successful charge as long as youre doing under $1million in volume per year This rate varies country to country but its always flat They dont disclose any special high volume rates
The base fee for PayPal is the same as Stripe 29 + 30cent But they offer discounts as volume goes up The discounts kick in at$3000 (25 + 30cent) $10000 (22 + 30cent) and $100000 (not published) per month This looks like a better deal but PayPal throwsin some extra service fees that make things a bit more complicated
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Lets compare Stripe and PayPals service fees
Service PayPal StripeCharge cards from your website $30 month [1] FreeChargeback $20 $15American Express 35 [2] Same flat rateRefund Transaction fee FreeInternational cards 1 [3] Free [4]Authorize card 30cent [5] Free
1 $5 month for PayPal Advanced and $30 month for PayPal Pro Compare the different features PayPal Advanced requiresyou offer PayPal as a payment option
2 American Express fee is only charged for PayPal Advanced and PayPal Pro which is required for certain features (see note 1)3 PayPal cross border fees4 International cards are free but currency conversion costs 2 Example You connect a GBP bank account to Stripe but charge
in USD Stripe will automatically convert your funds to GBP (for a 2 fee) and deposit them into your GBP bank account Ifyou instead charged in GBP (or connected a USD bank to Stripe) it would be free
5 PayPal charges 30cent for uncaptured authorizations and card verification transactions
Youll notice that PayPal fees are far more complex and require plenty of explaining For example they only charge extra forAmerican Express when youre on one of the paid plans which seems counterintuitive
So how do the transaction fees compare in a real life scenario Lets take a look at a Stripe vs PayPal transaction fee comparisonchart based on sales volume Remember if you want to charge cards on your site using PayPal and not provide PayPal as an optionyoull need a PayPal Pro plan
Stripe vs PayPal transaction fee comparison chart
Volume month Stripe PayPal Standard PayPal Pro$500 $22 $22 $52
$1000 $44 $44 $74$2500 $110 $110 $140$5000 $220 $200 $230$10000 $440 $370 $400$15000 $660 $555 $585$20000 $880 $740 $770$25000 $1100 $925 $955$50000 $2200 $1850 $1880$75000 $3300 $2775 $2805
Assumes $20 for each transaction
As you can see $5000 in monthly volume is an interesting data point Thats right around where it starts becoming cheaper to usePayPal Keep in mind were not counting any of the service fees we discussed earlier which would bring the PayPal costs up a bit
When do I get paid
PayPal usually pays out within 1 business day while Stripe takes 7 full days If fast access to your funds is important keep this inmind
Update USA Stripe customers now get faster two day transfers
Security
Both Stripe and PayPal take security seriously At the core theyre both very stable and secure platforms Lets talk about how theyredifferent and how Stripe intrinsically encourages good security
Stripes killer feature when they first launched was Stripejs When you use Stripejs on your website the credit card data entered into
482015 Stripe vs PayPal Who should you choose
httpsmemberfulcomblogstripeshyvsshypaypal 34
your payment form is never sent to your server Instead the data is sent directly to Stripe Why is this so important
Automatically PCI compliant because you dont handle any sensitive credit card data on your serversMore secure because a breach of your servers wont result in any stolen credit card dataYoure not tempted to store credit card data on your servers which you really shouldnt be doing unless youre a big businessand want to pay for PCI compliance
If you follow the normal flow with Stripe youll just automatically store your cards in their vault Youll never touch the sensitivedata This encourages good security
PayPal now has a way to store cards in a vault but it isnt quite the same as Stripejs The sensitive card data has to go through yourservers and this puts a big security burden (see PCI compliance above) on the software developer or the customer who has installedthe software
In summary Stripejs encourages good developer security practices while PayPal gives developers room to make bad decisionsTheyve recently taken steps to provide better options but these options still arent as secure as Stripejs
API
When Stripe first launched to the public the Stripe API was a difference maker Its clean well documented and extremely easy touse Payment processor APIs of the past were buggy inconsistent and poorly documented In fact PayPal was one of the worstoffenders
In a way Stripe has forced PayPal to up its game The documentation and organization of their new RESTful PayPal API is vastlyimproved and modeled after Stripe (coincidentally) This is an example of competition benefiting customers Stripe has set a newstandard for a clean and well documented API and the rest of the industry (including PayPal) is rushing to catch up
Data Portability
This is an area where PayPal falls flat on its face Imagine youve built a successful membership site over the years and you poweredit with PayPal subscriptions If you want to move to another payment processor (like Stripe) you cant transfer that credit card dataPayPal simply wont give it you All your existing customers would have to sign up again and youd probably lose some of themduring the process
Stripe on the other hand values data portability If you decide to leave Stripe theyll help you migrate your credit card data in a secureand PCIshyCompliant way This over accommodating stance on data portability is certainly worth noting Its refreshing to know youhave a choice and wont be locked in forever
Customer ServiceWe havent used PayPal in over two years so we dont have any recent experience with their customer service Back when we did usePayPal email support was slow and unreliable and it was nearly impossible to get someone on the phone At one point we had arunning joke because PayPals phone system kept hanging up on us before we could ever talk to anyone This went on for monthsThere are also countless horror stories of PayPal freezing funds for no reason
Stripe has open channels for email support and they also have an IRC channel (stripe on Freenode) where developers can chat andget live help from real engineers This is invaluable if youre working through a tough problem and need some live help Stripe doesntyet have phone support but Im sure its in the plans Theyve always been very open and pleasant to deal with
To be fair PayPal is suffering from scale age and bureaucracy Stripe is new and hustling for market share Theyre working hard todifferentiate with great customer service The real test will be over time Stripe will find it more and more challenging to provide topnotch customer service as they get larger and larger Hopefully were still raving about their customer service five years from now
Competition is good
For Memberful we chose Stripe and we couldnt be happier with that decision Its made everything we do easier from anengineering perspective and weve been thrilled with the service and support With that being said PayPal has taken steps to respondto upstarts like Stripe and has already improved their API significantly It will be interesting to see how these two companies evolveand compete over the next few years In the end well all enjoy better service because of it
Published on January 10 2014
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482015 Stripe vs PayPal Who should you choose
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Lets compare Stripe and PayPals service fees
Service PayPal StripeCharge cards from your website $30 month [1] FreeChargeback $20 $15American Express 35 [2] Same flat rateRefund Transaction fee FreeInternational cards 1 [3] Free [4]Authorize card 30cent [5] Free
1 $5 month for PayPal Advanced and $30 month for PayPal Pro Compare the different features PayPal Advanced requiresyou offer PayPal as a payment option
2 American Express fee is only charged for PayPal Advanced and PayPal Pro which is required for certain features (see note 1)3 PayPal cross border fees4 International cards are free but currency conversion costs 2 Example You connect a GBP bank account to Stripe but charge
in USD Stripe will automatically convert your funds to GBP (for a 2 fee) and deposit them into your GBP bank account Ifyou instead charged in GBP (or connected a USD bank to Stripe) it would be free
5 PayPal charges 30cent for uncaptured authorizations and card verification transactions
Youll notice that PayPal fees are far more complex and require plenty of explaining For example they only charge extra forAmerican Express when youre on one of the paid plans which seems counterintuitive
So how do the transaction fees compare in a real life scenario Lets take a look at a Stripe vs PayPal transaction fee comparisonchart based on sales volume Remember if you want to charge cards on your site using PayPal and not provide PayPal as an optionyoull need a PayPal Pro plan
Stripe vs PayPal transaction fee comparison chart
Volume month Stripe PayPal Standard PayPal Pro$500 $22 $22 $52
$1000 $44 $44 $74$2500 $110 $110 $140$5000 $220 $200 $230$10000 $440 $370 $400$15000 $660 $555 $585$20000 $880 $740 $770$25000 $1100 $925 $955$50000 $2200 $1850 $1880$75000 $3300 $2775 $2805
Assumes $20 for each transaction
As you can see $5000 in monthly volume is an interesting data point Thats right around where it starts becoming cheaper to usePayPal Keep in mind were not counting any of the service fees we discussed earlier which would bring the PayPal costs up a bit
When do I get paid
PayPal usually pays out within 1 business day while Stripe takes 7 full days If fast access to your funds is important keep this inmind
Update USA Stripe customers now get faster two day transfers
Security
Both Stripe and PayPal take security seriously At the core theyre both very stable and secure platforms Lets talk about how theyredifferent and how Stripe intrinsically encourages good security
Stripes killer feature when they first launched was Stripejs When you use Stripejs on your website the credit card data entered into
482015 Stripe vs PayPal Who should you choose
httpsmemberfulcomblogstripeshyvsshypaypal 34
your payment form is never sent to your server Instead the data is sent directly to Stripe Why is this so important
Automatically PCI compliant because you dont handle any sensitive credit card data on your serversMore secure because a breach of your servers wont result in any stolen credit card dataYoure not tempted to store credit card data on your servers which you really shouldnt be doing unless youre a big businessand want to pay for PCI compliance
If you follow the normal flow with Stripe youll just automatically store your cards in their vault Youll never touch the sensitivedata This encourages good security
PayPal now has a way to store cards in a vault but it isnt quite the same as Stripejs The sensitive card data has to go through yourservers and this puts a big security burden (see PCI compliance above) on the software developer or the customer who has installedthe software
In summary Stripejs encourages good developer security practices while PayPal gives developers room to make bad decisionsTheyve recently taken steps to provide better options but these options still arent as secure as Stripejs
API
When Stripe first launched to the public the Stripe API was a difference maker Its clean well documented and extremely easy touse Payment processor APIs of the past were buggy inconsistent and poorly documented In fact PayPal was one of the worstoffenders
In a way Stripe has forced PayPal to up its game The documentation and organization of their new RESTful PayPal API is vastlyimproved and modeled after Stripe (coincidentally) This is an example of competition benefiting customers Stripe has set a newstandard for a clean and well documented API and the rest of the industry (including PayPal) is rushing to catch up
Data Portability
This is an area where PayPal falls flat on its face Imagine youve built a successful membership site over the years and you poweredit with PayPal subscriptions If you want to move to another payment processor (like Stripe) you cant transfer that credit card dataPayPal simply wont give it you All your existing customers would have to sign up again and youd probably lose some of themduring the process
Stripe on the other hand values data portability If you decide to leave Stripe theyll help you migrate your credit card data in a secureand PCIshyCompliant way This over accommodating stance on data portability is certainly worth noting Its refreshing to know youhave a choice and wont be locked in forever
Customer ServiceWe havent used PayPal in over two years so we dont have any recent experience with their customer service Back when we did usePayPal email support was slow and unreliable and it was nearly impossible to get someone on the phone At one point we had arunning joke because PayPals phone system kept hanging up on us before we could ever talk to anyone This went on for monthsThere are also countless horror stories of PayPal freezing funds for no reason
Stripe has open channels for email support and they also have an IRC channel (stripe on Freenode) where developers can chat andget live help from real engineers This is invaluable if youre working through a tough problem and need some live help Stripe doesntyet have phone support but Im sure its in the plans Theyve always been very open and pleasant to deal with
To be fair PayPal is suffering from scale age and bureaucracy Stripe is new and hustling for market share Theyre working hard todifferentiate with great customer service The real test will be over time Stripe will find it more and more challenging to provide topnotch customer service as they get larger and larger Hopefully were still raving about their customer service five years from now
Competition is good
For Memberful we chose Stripe and we couldnt be happier with that decision Its made everything we do easier from anengineering perspective and weve been thrilled with the service and support With that being said PayPal has taken steps to respondto upstarts like Stripe and has already improved their API significantly It will be interesting to see how these two companies evolveand compete over the next few years In the end well all enjoy better service because of it
Published on January 10 2014
482015 Stripe vs PayPal Who should you choose
httpsmemberfulcomblogstripeshyvsshypaypal 44
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Copyright copy 2015 Jestro LLC All rights reserved
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482015 Stripe vs PayPal Who should you choose
httpsmemberfulcomblogstripeshyvsshypaypal 34
your payment form is never sent to your server Instead the data is sent directly to Stripe Why is this so important
Automatically PCI compliant because you dont handle any sensitive credit card data on your serversMore secure because a breach of your servers wont result in any stolen credit card dataYoure not tempted to store credit card data on your servers which you really shouldnt be doing unless youre a big businessand want to pay for PCI compliance
If you follow the normal flow with Stripe youll just automatically store your cards in their vault Youll never touch the sensitivedata This encourages good security
PayPal now has a way to store cards in a vault but it isnt quite the same as Stripejs The sensitive card data has to go through yourservers and this puts a big security burden (see PCI compliance above) on the software developer or the customer who has installedthe software
In summary Stripejs encourages good developer security practices while PayPal gives developers room to make bad decisionsTheyve recently taken steps to provide better options but these options still arent as secure as Stripejs
API
When Stripe first launched to the public the Stripe API was a difference maker Its clean well documented and extremely easy touse Payment processor APIs of the past were buggy inconsistent and poorly documented In fact PayPal was one of the worstoffenders
In a way Stripe has forced PayPal to up its game The documentation and organization of their new RESTful PayPal API is vastlyimproved and modeled after Stripe (coincidentally) This is an example of competition benefiting customers Stripe has set a newstandard for a clean and well documented API and the rest of the industry (including PayPal) is rushing to catch up
Data Portability
This is an area where PayPal falls flat on its face Imagine youve built a successful membership site over the years and you poweredit with PayPal subscriptions If you want to move to another payment processor (like Stripe) you cant transfer that credit card dataPayPal simply wont give it you All your existing customers would have to sign up again and youd probably lose some of themduring the process
Stripe on the other hand values data portability If you decide to leave Stripe theyll help you migrate your credit card data in a secureand PCIshyCompliant way This over accommodating stance on data portability is certainly worth noting Its refreshing to know youhave a choice and wont be locked in forever
Customer ServiceWe havent used PayPal in over two years so we dont have any recent experience with their customer service Back when we did usePayPal email support was slow and unreliable and it was nearly impossible to get someone on the phone At one point we had arunning joke because PayPals phone system kept hanging up on us before we could ever talk to anyone This went on for monthsThere are also countless horror stories of PayPal freezing funds for no reason
Stripe has open channels for email support and they also have an IRC channel (stripe on Freenode) where developers can chat andget live help from real engineers This is invaluable if youre working through a tough problem and need some live help Stripe doesntyet have phone support but Im sure its in the plans Theyve always been very open and pleasant to deal with
To be fair PayPal is suffering from scale age and bureaucracy Stripe is new and hustling for market share Theyre working hard todifferentiate with great customer service The real test will be over time Stripe will find it more and more challenging to provide topnotch customer service as they get larger and larger Hopefully were still raving about their customer service five years from now
Competition is good
For Memberful we chose Stripe and we couldnt be happier with that decision Its made everything we do easier from anengineering perspective and weve been thrilled with the service and support With that being said PayPal has taken steps to respondto upstarts like Stripe and has already improved their API significantly It will be interesting to see how these two companies evolveand compete over the next few years In the end well all enjoy better service because of it
Published on January 10 2014
482015 Stripe vs PayPal Who should you choose
httpsmemberfulcomblogstripeshyvsshypaypal 44
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Want more Subscribe by email to get new articles delivered to your inbox or browse all our articles on building better membershipwebsites
HomeAboutDocumentationShowcaseBlogFAQContactSecurityTerms amp Privacy
Copyright copy 2015 Jestro LLC All rights reserved
memberful
Share
482015 Stripe vs PayPal Who should you choose
httpsmemberfulcomblogstripeshyvsshypaypal 44
Tweet
Want more Subscribe by email to get new articles delivered to your inbox or browse all our articles on building better membershipwebsites
HomeAboutDocumentationShowcaseBlogFAQContactSecurityTerms amp Privacy
Copyright copy 2015 Jestro LLC All rights reserved
memberful
Share