Stripe vs Paypal

September 28, 2020 | Merchants | Josh

Knowing the differences between Stripe vs PayPal is key to choosing the best payment processor. With many credit card processing services on the market today, finding the right one can be daunting. Each company operates in different countries, offers unique services, and sells various products made to work with their own devices. There are several payment processing businesses to choose from. But for this article, we will match up two of the larger aggregate companies that do not offer high risk merchant accounts – Stripe vs PayPal.

Stripe Account vs PayPal Account

Stripe vs PayPal: Online Fees and Charges

There are so many factors to consider when choosing the best credit card processor for your online store. But in order to accept debit cards, process credit card transactions, or accept recurring monthly payments, your small business will need a reliable virtual terminal.

Company LogoStripe LogoPayPal Logo
Setup FeeFreeFree
Monthly FeeNoneNone
Transaction Fee2.9% + $0.30 per transaction2.9% + $0.30 per transaction
Currency Conversion FeeAdditional 1% fee2.5% added to the exchange rate
RefundsNo feeReturns the 2.9% fee, but not the $0.30 fee
3D Secure AuthenticationIncluded ($0.03 per 3D Secure attempt for accounts with custom pricing)Included

Stripe vs PayPal: Card Present Fees

When a customer makes a credit card payment in-person, the transaction is very secure. In comparison, online credit card payments are more susceptible to fraud or other security issues.  Because of this, the transaction fee is greater.

Card present transactions are a relatively form of payment to receive as a business. There is less risk involved in card-present transactions because the card owner is physically in attendance for the transaction, therefore eliminating inherent risks that otherwise would occur online.

Point of Sale Product ImageStripe Card ReadersPayPal Card Reader
Card Reader$59 for the BBPOS Chipper 2X BT- $24.99 for Chip and Swipe Reader
- $79.99 for Chip and Tap + Charging Stand
Card Present Transaction Fee2.7% + $0.05 per transaction2.7% per US card swipe
Terminal$299 for the Verifone P400- $129.00 for Heckler Design Windfall Stand
- $189.90 for Studio Proper Swivel Stand
Monthly FeesNoneNone
Cards and Digital Wallets AcceptedVISA, Mastercard, Maestro, American Express, Discover, JCB, Apple Pay, G PayVISA, Mastercard, Discover, American Express, JCB, Diner's Club, EnRoute
International Payments+1% per transaction+1.5% per transaction

Stripe Payment Processing

Stripe payment processing has proven to be a good choice for online merchants whose checkout experience is conducted on the internet. The company is based in Ireland but operates in over 25 different countries. Large businesses, startup companies, and private individuals can use their service to accept payments online via a digital shopping cart.

Stripe Account

As mandated by the Payment Card Industry Security Standards Council, both Stripe and PayPal are PCI compliant. Accepting payments securely by following federal regulation and adhering to PCI compliance is an essential characteristic of legitimate, established payment gateways. Overall, Stripe offers reliable payment processing for any size merchant looking to accept credit card payments online.

PayPal Merchant Account

A PayPal merchant account is a robust payment processing solution for growing startup businesses. It allows your online customers to make secure and quick transactions through your website. This gives you the freedom to sell products with a trusted payment provider. 

Their platform is designed to cover a number of business needs, but still has a few limitations you should be aware of. According to the Terms and Conditions, there are certain high risk industries they will not allow on their platform. Take this into consideration when choosing to set up your merchant account through PayPal. Otherwise, PayPal can freeze your merchant account, and you may not have the ability to process payments on your website until you find another provider. 

PayPal Account

Once you’ve determined you qualify for PayPal payment processing, then you’ll want to familiarize yourself with all of the respective fees associated with this resource. As a main competitor in the merchant account space, they try to match fees with other large scale companies. You can compare the transaction costs with a Stripe merchant account above.

Your PayPal Merchant ID

A PayPal Merchant ID is the identification number of your account for your business. Much like a social security number for an individual, this number is the personal identity of your payment processing account for your company. It’s essential for sharing fiscal growth metrics for tax statements or other financial entities. 

More than a bank, PayPal is a multi-purpose company that can help you grow your company over time. However, as your business scales, it’s important to consider your options when it comes to lowering your costs. As you start producing more sales volume, you’ll have the ability to leverage your growth to reduce rates. Be sure to seek at alternative payment providers who can lower your processing fees so you can save critical revenue in your growing business.

Stripe PayPal

High Risk Merchant Services

Many business owners pursue their dreams of owning a successful company not being aware that there are many business types classified as high risk. And as a company that is classified as high risk, you must be aware of the hurdles, processes, and stipulations related to payment processing.

If you don’t, you can get shut down by the acquiring bank. This is the last situation you want to be in as a high risk business. So how do you ensure that you keep processing payments and increase revenue?

Before covering the details of high risk credit card processing, it is important to understand what factors contribute to determining if a business is classified as one. The factors below are indicators that your company may be high risk:

  • The individual registering the business has a bad credit score
  • Products and services sold are large ticket transactions
  • There is a high amount of returns and chargebacks
  • The bank considers your company having a reputational risk
  • You use a recurring billing model for monthly and subscription-based sales
  • Processing is for card-not-present transactions
  • The merchant is in a highly-regulated industry

Do one or more of the above indicators describe your company? If so, it’s likely your business falls into the high risk category. In this case, it is essential to find a payment processor, like PayKings, who specialize in providing sustainable high risk merchant accounts.

September 28, 2020 | Merchants | Josh