Key takeaways
Stripe is the leading brand for customized online payment platforms, making it popular with software developers. PayPal is a pioneer of easy-to-use online payment apps with a huge consumer base.
The question of using Stripe versus PayPal is a common topic of debate among online business owners, developers, and entrepreneurs regarding which one offers the best online checkout. The key difference between the two is that Stripe offers nearly unlimited scalability with its customization tools. PayPal, while also customizable, is best known for its simple and easy-to-use platform. For tech-savvy and fast-growing online business, choose Stripe. If your business needs fast setup, then PayPal is your best option.
Stripe: Best for growing businesses
Our rating
4.46/5
Pricing
4.25/5
Hardware
4/5
Payment Software
4.79/5
Support and Reliability
4.58/5
User Experience
4.69/5
User Scores
4.43/5
Pros
- Free merchant account
- Accepts cross-border payments
- Hundreds of integrations
- Advanced checkout customization tools
- High-level security features
Cons
- Limited virtual terminal functionality
- Advanced customization requires coding skills
- Add-on fees on invoicing and recurring payments
Stripe is a leading online payment services provider that, since its launch in 2010, has built an impressive suite of payment and business automation solutions. Its ability to provide highly customized features, from checkout pages to payment security, makes it a standout among growing businesses.
Stripe integrates with hundreds of third-party applications and platform extensions to create a fully customized online payment solution.
In its early years, Stripe offered limited simple checkout integrations for businesses without access to software development resources. This resulted in merchants choosing more user-friendly payment systems (like PayPal).
However, Stripe has recently made great strides to provide easy-to-use customization tools, particularly for creating checkout pages, creating invoices, and managing recurring payments. One particularly great addition to its user-friendly tools is Stripe’s pre-built mobile app (Stripe Dashboard) for managing invoices, monitoring sales, and accepting payments.
Read more: Stripe alternatives
Payment methods
Stripe supports most types of payment services, including e-wallets, cross-border payments, Level 2 and 3 data processing for B2Bs, nonprofits, cryptocurrency, and even PayPal. It also supports local payment methods in 47 countries and integrates with various peer-to-peer and buy now, pay later (BNPL) services.
Custom checkouts
Stripe’s rich resources for designing custom online checkouts are popular among online and in-person business owners. The system offers both no-code and coding-required customizations for all business types.
Payment security
Stripe is well-known for its suite of payment security features. It allows businesses to fine-tune the built-in fraud monitoring and detection tools to their acceptable risk levels. Stripe checkouts can also be embedded with additional verification features, such as biometrics, to detect unusual transactions.
Integrations
Stripe has 660 third-party integrations and 450 platform extensions, all of which allow for as much customization as a business needs to run a business efficiently. Integrations also include compatibility with various e-commerce platforms and marketplaces.
PayPal: Best for startups and freelancers
Our rating
4.21/5
Pricing
4.25/5
Hardware
4.25/5
Payment Software
4.17/5
Support and Reliability
3.33/5
User Experience
4.69/5
User Scores
4.60/5
Pros
- Free merchant account
- Can be used as additional payment method
- Integrates with most e-commerce platforms
- Widely trusted by consumers
- Fast access to funds via PayPal Balance
Cons
- Complicated pricing scheme
- Charges for access to virtual terminal
- Issues with frozen funds
PayPal is a pioneer of online peer-to-peer payments and eventually developed a merchant service for businesses. While not perfect, customers know and have come to trust PayPal over the decades for its easy-to-use platform and payment methods. So, having PayPal payment methods available on your website is a great advantage. And, PayPal’s merchant account is free.
Businesses with an e-commerce website can easily integrate PayPal’s standard or customized checkout without any coding skills. Or, simply add PayPal as an extra payment option to your existing checkout.
The PayPal business app (formerly PayPal Commerce and PayPal Here) is no slouch either. It does everything that Stripe’s Dashboard App can do and more, again, without any coding required. PayPal’s mobile business app works like a digital wallet and lets users accept micropayments from other mobile consumer apps.
But PayPal’s most exciting development is its enterprise payment solutions. It offers businesses custom interchange plus pricing and developer tools for creating tailored payment and even POS solutions, much like Stripe.
Read more: Best Retail POS Systems
Payment methods
PayPal supports all types of credit card payment services, including invoicing, cross-border, digital wallets, and virtual terminals. It also allows businesses to accept cryptocurrency payments, BNPL, and Venmo (for US merchants).
Custom checkouts
PayPal offers easy checkout customization tools and developer resources for advanced features. On top of these, PayPal also has a product called PayPal Checkout, which can be integrated into e-commerce websites to provide customers with the option to make payments using their personal PayPal account.
Payment security
PayPal uses Transport Layer Security (TLS) and machine-learning fraud detection technology to protect PayPal transactions. Advanced risk monitoring tools are also available with an enterprise plan.
Integrations
PayPal lists hundreds of third-party integrations for e-commerce, accounting, nonprofits, and other business operation tools. PayPal can also integrate with several POS software to allow customers to pay for in-person purchases with their PayPal account.
How are Stripe and PayPal different?
Software type
Payments
Payments and POS
Monthly account fee
$0-$10
$0-$30
Fee structure
Flat rate or custom interchange-plus
Flat rate, custom interchange-plus for enterprise business
Customizations
Advanced, developer-based
Limited, no coding required
Enterprise solutions
Available
Available
POS integration
Custom software/app development
Server-driven integration
Integrates w/ some POS systems
Proprietary POS
Bank funding speed
2 business days, first deposit takes up to 14 days
3 business days
(Instant access to funds in PayPal balance)
On paper, Stripe and PayPal seem to be quite similar. However, a closer look shows how each provider is uniquely positioned to cater to slightly different business types.
Here are some of the key differences:
Ease of use
If we compare how easy it is to process transactions using Stripe vs PayPal, both are fast and efficient. For customers, both have a very streamlined checkout process; no unnecessary redirects or multiple logins required. Both Stripe and PayPal also have fast checkout services: Link (for Stripe) and Fast Lane (for PayPal).
The biggest difference between the two is on the business end, especially when it comes to setting up your account and online checkouts.
Signing up for a Stripe or PayPal merchant account is fast and easy. It takes only minutes and requires no approval process. Once you have accessed your account, provided all the necessary business information, and customized the settings, you’re ready to go.
However, as you start configuring your payment solutions, you will notice how PayPal has a clear edge over Stripe in terms of ease of use. While Stripe does offer simple checkout and payment link setup, everything else will likely require some level of coding. This can easily overwhelm new users, even with Stripe’s extensive support documentation.
SEE: Quick Glossary: Payroll (TechRepublic Premium)
Customization options
Stripe’s strongest suit is its customization features that offer near-endless possibilities for growing a business from the ground up. The system offers both no-code and developer customizations to fit the needs of all business sizes. These customizations also extend to fraud monitoring, security, and chargeback management tools.
PayPal also has its own set of simple and developer-centric customizations. Although PayPal’s functionalities are not as feature-rich as Stripe’s, PayPal has the advantage of having its own set of checkout services. The PayPal checkout, with the PayPal branding, is trusted by most online consumers. It is accessible to all business sizes and can be customized to include alternative payment methods.
Compatibility with existing systems
Both Stripe and PayPal are easy to integrate with any e-commerce website. Stripe, in fact, is used widely by popular platforms, including Shopify. On the other hand, PayPal can be used as a primary payment processor or as an additional payment method.
For online businesses looking to expand, POS integrations are an important factor to consider. Stripe and PayPal differ significantly in this. PayPal has a free mobile POS app (PayPal Zettle) and also offers ready integration with a number of POS software, such as Hike and Clover. Stripe, meanwhile, requires coding to integrate with POS software or creating a custom app to work with POS hardware.
Read more: Best POS Hardware
Security & stability
Stripe is arguably the most reliable of the two, particularly in terms of security. It offers advanced risk management, including machine learning fraud management filters and a chargeback management dashboard. PayPal also provides users with risk control settings, but not as advanced as Stripe’s.
As for account stability, both Stripe and PayPal provide aggregate merchant accounts. This means there is only one merchant ID for thousands of businesses using Stripe and PayPal’s services. While this makes for faster set-up and simpler fees, it makes businesses more susceptible to withheld funds and delayed deposits. PayPal minimizes the issue of fund access better than Stripe, but Stripe does not encounter numerous user complaints about frozen accounts and funds on hold.
Funding options
Stripe deposits funds into your bank account in two business days, while PayPal takes an average of three business days. However, note that the first deposit with Stripe goes through additional validation processes, which can take up to 14 days.
Both Stripe and PayPal offer same-day funding for a 1.5% fee. However, only PayPal provides instant access to funds through the PayPal balance. The PayPal balance can be used to pay for online purchases like a digital wallet and withdrawn at ATMs if you have a PayPal debit card.
Stripe vs. PayPal: Fees and pricing
Monthly account fee
Starts at $0
Starts at $0
Account upgrade option
$10 for custom domain
$30
Online transaction fee
2.9% + $0.30 or custom interchange-plus rate
2.29% + $0.09 (QR) to 3.49% + $0.49
Cross border fee
1.5%
1.5%
ACH/E-checks
0.8%, $5 cap (ACH)
3.49% + 49 cents, $300 cap (E-check)
0.8%, $5 cap (ACH)
Invoicing/recurring billing
+ 0.4%–0.7%
+$14.99 for invoicing
+$10-$30 for recurring billing services
Discount for nonprofits
✓
✓
Available upgrades
✓
✓
Same-day funding
1.5%
1.5%
Chargeback fee
$15
$15 (PayPal checkouts)
$20 (guest checkouts)
Discounted processing rates
Custom interchange plus rates for qualified businesses (by request)
Custom interchange plus rates for large businesses
At first glance, the two seem evenly matched when comparing PayPal vs. Stripe fees. Stripe and PayPal both use a flat rate pricing model, where the base merchant account is free, but there may be additional monthly fees for optional payment services. However, it’s in the add-on costs where Stripe has some advantage over PayPal.
Stripe charges additional fees for:
- Custom domain for checkout pages: +$10 per month
- Invoicing services: + 0.4%-0.5% per invoice (Stripe invoicing)
- Recurring billing services: + 0.7% per billing volume (Stripe billing)
- Tap-to-pay on mobile: +10 cents per authorization
- Accepting international cards: +1.5%
PayPal charges additional fees for:
- Invoicing: +$14.99 per month
- Virtual terminal: +$30 per month
- Advanced payment gateway: +$25 per month (Payflow Pro)
- Customizable PayPal payment checkout: +$30 per month (Payments Pro)
- Customized embedded checkout page: +$5 per month (Payments Advanced)
- Accepting international cards: +1.5%
- Recurring billing service: +$10 per month
- Recurring payments tools: +$30 per month
One particular downside of PayPal is its complicated pricing scheme, which sometimes makes it difficult to compare with alternatives like Stripe. That said, PayPal offers discounts for charities and nonprofits, while Stripe relies on default nonprofit interchange fees. PayPal also charges significantly lower rates for in-person/mobile transactions.
Read more: Cheapest Credit Card Processing Companies
Stripe vs. PayPal: Online payment services
Payment types
Credit/Debit cards
✓
✓
Digital wallets
✓
✓
One-click
✓
✓
ACH/E-check
ACH
ACH & E-check
Invoicing/Recurring billing
✓
✓
International
✓
✓
Local payment methods
Requires coding
Requires coding
Virtual terminal
Limited
✓
Level 2 and 3 (for B2Bs)
Requires coding
Upgrade to Braintree
HIPAA compliance (healthcare)
✗
✗
Microtransactions
With integration
✓
BNPL
With integration
✓
Cryptocurrency
✓
✓
CBD
✗
✗
PayPal has a slight edge over Stripe regarding online payment services, primarily because it requires little integration to support its payment methods. Unlike Stripe, PayPal offers its own BNPL platform, Pay in 4, and peer-to-peer payment app, Venmo. Accepting micropayments with PayPal is also readily available, while this will require some coding to use on Stripe.
While Stripe may not be the easiest to set up, it does offer a lot of room for a more personalized payment solution for businesses. For instance, with developer tools, Stripe can support Level 2 and 3 data processing for B2B businesses to get better transaction rates. Using Stripe also means businesses can choose their preferred BNPL service and cryptocurrency wallet instead of just working exclusively with one.
Read more: Best payment gateways
Stripe vs. PayPal: Scalability
Stripe offers superior scalability for high-growth and enterprise businesses with its modular infrastructure, extensive global support, and advanced customization tools tailored for complex integrations. In contrast, PayPal provides reliable scalability for small to mid-sized businesses through turnkey solutions and value-added services that simplify growth without extensive technical setup.
Stripe is engineered for high-growth and enterprise businesses, offering:
- Global reach: Supports over 135 currencies and local payment methods across 47+ countries.
- Modular infrastructure: Features like Stripe Connect, Billing, and Terminal allow businesses to scale operations seamlessly.
- Advanced tools: Provides APIs and SDKs for custom integrations, enabling businesses to adapt as they grow.
Meanwhile, PayPal caters to businesses of all sizes, with:
- Global scalability: Offers payment solutions that perform reliably during high-demand periods and international expansions.
- Integrated services: Combines payment processing with value-added services to support business growth.
- Enterprise solutions: Provides tools to enhance operational agility and focus on growth.
Also see: Complete Guide to Subscription Payment Gateways
Stripe vs PayPal: Customization capabilities
Checkout options
Excellent
Great
Payment methods
Excellent
Excellent
Security
Excellent
Good
Reporting & Analytics
Excellent
Good
Native add-ons
Payments
Business tools
Payments
Options
Code-free
Developer setup
Integrations
Code-free
Developer setup
Integrations
Stripe’s customization features are hands-down better than PayPal’s. With advanced coding, Stripe can be designed to upgrade the look and feel of checkout pages with custom fields, automation, and branding. This also includes being able to detect a customer’s location, adapt the language and currency, and fine-tune fraud prevention protocols.
PayPal, on the other hand, relies very little on customizations to start accepting payments. Advanced developer tools are available to expand payment methods, add unique integrations, generate reports, handle disputes, and more. Note that most of these tools are already available on Stripe as add-on products.
Developer & API Tools
Stripe is renowned for its developer-centric approach, while PayPal provides robust developer tools.
RESTful APIs with extensive documentation for various programming languages.
REST APIs for integrating PayPal services into applications.
Offers SDKs for mobile (iOS, Android) and web platforms.
Mobile SDKs that support iOS and Android platforms.
Developer dashboard tools like Workbench and CLI for testing and monitoring integrations.
Sandbox environment that allows developers to test transactions in a simulated environment.
Stripe leads in developer AI tools with features like AI-driven fraud detection (Radar), personalized checkout experiences, and GPT-4-powered virtual assistants to streamline integration and support. PayPal, while less developer-centric, is advancing with tools like its Agentic AI Toolkit and Smart Receipts to enable personalized commerce and predictive customer engagement.
AI in payment customization
As more consumers become aware of the use of artificial intelligence (AI), it’s important to consider how AI benefits businesses in payment processing.
For instance, both Stripe and PayPal have tapped into machine-learning technology to manage payment security for their users. Reporting analytics also use some level of AI to generate relevant insights from large volumes of business data.
That said, Stripe is well ahead in embedding AI into their payment platform. It uses GPT-4 to manage its developer resources with virtual assistants and chatbots. Stripe also uses AI for facial recognition in selfie checks with its online identity verification feature.
Meanwhile, PayPal began 2024 with exciting updates centered around using AI to analyze customer data from around 400 million consumers who use its service. This includes accelerating the checkout process with biometric access (face or fingerprint) and guest checkout recognition (now used by BigCommerce).
Additionally, PayPal is using personalized AI to improve customer engagement with new tools such as Smart Receipts, which offer personalized recommendations and cashback, and the Advanced Offers platform, which uses specific merchant data instead of impressions to generate more relevant customer recommendations.
So, while Stripe currently has the upper hand in customizations, PayPal is not far behind. The role that AI will play in both Stripe’s and PayPal’s improvements this year should also factor into your decision-making.
Stripe vs. PayPal: E-commerce integrations
As big names in the online payment industry, both Stripe and PayPal are considered experts in e-commerce integrations.
Stripe’s expertise is in providing custom-branded checkout services for websites with a trove of payment methods to choose from, including PayPal. With its advanced customization tools, Stripe can be integrated with most e-commerce platforms for all business models, sizes, and types. Stripe’s marketplace lists hundreds of ready integrations with a variety of business tools, from accounting to project management platforms.
Meanwhile, PayPal has a similar marketplace for various business integrations, including e-commerce. But what’s unique about PayPal is that websites can use it alongside other payment processors at checkout. So, even if businesses already have Stripe embedded on their e-commerce website, it’s still possible to add PayPal as an additional payment method option.
While Stripe also supports independent payment links, PayPal-branded “buy now” buttons are recognizable and easy to add to social media and instant messaging platforms.
Read more: Best E-commerce Payment Processors
Stripe vs. PayPal: Security
Stripe and PayPal are both Level-1 data PCI-compliant. This means both providers are equipped with the layers of security and procedures to handle customer payment data. Both also have dispute resolution management tools.
However, Stripe has a longer list of security features to protect customers’ access to your e-commerce website and payment processing features. Aside from the standard security protocols, Stripe also comes with a number of products for risk and identity management, such as ID verification and biometric security.
However, what makes Stripe unique is its ability to allow businesses to fine-tune their fraud prevention rules according to their level of acceptable risk. This means businesses are less likely to lose out on legitimate sales.
Similarly, PayPal has its own fraud management filters that also allow companies to control the settings and choose among risk control options to implement. Although not as thorough as Stripe’s functionality, you still get to set your own list of monitored countries, place a cap on transaction amounts, address verification, security code verification, and more.
Based on the level of control over security and fraud management, Stripe’s features are clearly more suited for businesses with heavier sales activity, while PayPal provides the best security for businesses with low-volume sales.
Stripe vs. PayPal: Ease of use
I find Stripe and PayPal equal in terms of ease of use for simple payment processing. Both providers are easy to sign up for, offering instant merchant account approval and pay-as-you-go contracts.
Stripe and PayPal offer basic payment processing setups that require no special coding skills to create a checkout page, invoice templates, or reports. However, I find PayPal’s merchant dashboard cleaner, easier to navigate, and more user-friendly overall.
On the other hand, while both Stripe and PayPal also offer developer tools for advanced payment processing and customization, Stripe provides more available functionalities.
Stripe vs PayPal: Customer support quality
24/7 support: All customers have access to round-the-clock phone, email, and chat support.
Help center: Offers solutions for common issues like account access, payment holds, and disputes.
Premium plans: Options include named technical account managers and proactive engagement for businesses requiring dedicated support.
Contact options: Users can reach out via phone or message for personalized assistance.
Developer community: Access to a developer Discord server for technical queries.
Developer support: Technical support available through the PayPal Developer Portal.
Stripe and PayPal both offer robust support systems, but they differ in delivery style and responsiveness. While Stripe caters more to developers and enterprise clients with tiered support and dedicated account managers, PayPal emphasizes ease of access and fast resolution for a broader user base.
Dispute management
Stripe offers a more advanced and customizable chargeback management system, ideal for businesses with higher technical capabilities or enterprise needs. Its AI-powered tool, Stripe Radar, proactively detects fraud and allows merchants to tailor risk thresholds and fraud rules. In contrast, PayPal relies on a more standardized approach, with fewer customization options but a simpler setup better suited for smaller businesses or those with limited technical resources.
When a chargeback occurs, Stripe automatically compiles dispute evidence and allows merchants to manage responses directly from the dashboard, streamlining the resolution process. Additionally, Stripe offers optional Chargeback Protection through Stripe Checkout, which reimburses dispute costs for a small fee — something PayPal does not offer in the same form.
PayPal instead supports merchants through its Resolution Center and provides Seller Protection on eligible transactions, which helps prevent financial loss but offers less automation and fewer tools for optimization.
Both Stripe and PayPal charge fees for handling chargebacks — $15 for Stripe and $20 for PayPal (guest checkouts). While Stripe allows more control and transparency through its programmable tools and chargeback analytics, PayPal prioritizes ease of use and a guided experience for dispute management.
Also read: Best Online Payment Processors
Which is best?
After comparing PayPal vs. Stripe, my evaluation shows both products are closely matched in pricing and ease of use. However, PayPal definitely stood out in terms of payment services, while Stripe edged out PayPal in customization and security features.
As for e-commerce integrations, PayPal and Stripe differ in intent. PayPal’s focus is on creating easy website checkout and other online platform payment options, while Stripe leverages e-commerce integrations to build a personalized online checkout experience.
Read more: Stripe vs. Square
Making your choice
With intent being the key difference between these two providers, the choice between PayPal vs. Stripe depends heavily on business goals.
Stripe is a better payment service for businesses that need custom solutions, such as a fast-growing restaurant. However, the setup required to create a customized integration between Stripe and restaurant POS software will take longer to complete.
PayPal is more convenient and easier to use for businesses looking for simple checkout solutions, such as an additional payment method on their e-commerce platform or standalone “buy now” payment link to use without a website.
Frequently asked questions (FAQs)
