Stripe or PayPal? Quick rundown.
It’s always tricky to choose the right payment gateway. Let me try to shine some light on the Stripe vs PayPal situation.
Receiving payments is one of the most important part of running your own business. So it should be as easy for your clients to make payments, as it is for you to accept them. Following a great post by Hosting Facts, I though it would be a good idea to expand on their PayPal vs. Stripe rundown.
But let me first introduce you to Stripe and PayPal, for those of you living under a rock for the last 2 decades (PayPal — 1998, Stripe — 2010).
Stripe is simple
As you can see on their pricing page, Stripe aims to be simple and transparent in their pricing. They charge you a flat rate of 2.9% + 30¢ per successful transaction. This rate varies country to country, but it’s always flat. They do offer special high volume rates, but they are not exposed on their website.
If you need to refund a customer, you don’t have to pay any fees.
Chargebacks are $15, but if the customer’s bank resolves the dispute in your favour, the fee is fully refunded.
PayPal is all over the place, but could save you money.
In good Enterprise fashion, PayPal has many different payment gateways to choose from, many plans and many different ways to get paid as well. It might be hard to figure out, but if you take the time, it might save you some real money later, when you do volume.
If you have to refund a customer, they still charge you the transaction fee.
Chargebacks are $20. But even in their User Agreement, they don’t clearly state if they refund the $20 fee if the bank resolves the dispute in your favour.
Alright, so what does that really mean in my case?
So let’s assume you run a business with recurring payments (web hosting maybe?). Let’s also assume that the average transaction is $20. Now take a look at the Volume / Month table below. I’ve mapped the fees for Stripe and Standard PayPal (no monthly fees).
You can see that, at the $5,000 volume, PayPal is slowly becoming cheaper. That’s because of their Volume Discounts. Here’s the Canadian Volume Discounts table (couldn’t find the US one).
But using the Standard PayPal plan means that your users have to leave your site to checkout, re-directing them to PayPal’s checkout process. If you want to keep your users on site, you will want to look at the Advanced and Pro plans, $10 and $35 monthly, respectively. Pro will also allow you to take credit cards by phone, fax or mail.
API, API, API… API
As a developer, you want to work with clean, well documented and easy to use APIs. The Stripe API is all of the above. PayPal recently upped their game, thanks to Stripe, with their vastly improved PayPal API. But the fact that they have so many different plans and checkout process also means you’ll have to work with many different PayPal APIs.
Simplicity or Saving Money?
For us at Nukern, we like to deal with simple things, so Stripe is our winner. But we offer both options to our clients through modules. So they can accept payments through Stripe and/or PayPal’s payment gateway.
We’re not yet at the $5,000 volume, and we’ll be revisiting these 2 options in the near future. PayPal is getting in the “full-stack” payment game too, with its Braintree acquisition in 2013. So if you’re thinking about Stripe vs Braintree, take a look at this very detailed SitePoint guide.
Who’s your winner?
Let me know who you’re using and why?
