Last year has been a problematic and challenging year for many of us. The pandemic has brought about changes that will probably stay. Among others, the quickening of the transition to the digital world. Whether you are a traditional business owner, an entrepreneur, or have an e-commerce, you probably had to adapt your business to the new ways of selling and to “social distancing.”

Setting an online business today is relatively easy, and transitioning to the digital world is not as hard as it was a couple of years back. Still, not many know that the process doesn’t end at creating an attractive webpage with an interactive and exciting interface.

Many people tend to forget about one of the most important aspects of any business: getting paid. Once you’ve got your website, how should you accept payments?

The reality is that there are several platforms out there offering payment gateways systems, managing and accepting payments between merchants and customers. Choosing one among them might be challenging.

With this article, you’ll learn more about the two major players in the field: Stripe and PayPal. While they offer comparable features, you must understand which one is better suited to your business. If you are looking to make an informed decision for your business, you’ve landed in the right place

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What Are Gateway Systems?

Before digging into the similarities and differences, and the pros and cons of Paypal and Stripe, it is best to clarify what they do. They are referred to as “gateways systems” and handle online payment processing for e-commerce and other online businesses. While making use of these platforms isn’t the only solution to accept online payments, it is the simpler option, especially if you are new to the field. 

The Fees

Both systems charge a fee per transaction, which happens to be the same: a flat fee of 2.9% of the total cost plus $0.30 for each payment received. However, there are other differences and similarities. It is the differences that determine the benefits and drawbacks of choosing one over the other.



Stripe allows people to accept and send money online, and it is becoming a popular choice in eCommerce environments. It offers customizable development tools that are highly appreciated by tech-savvy people. Stripe allows you to embed valuable features to your website and better integrate payment in your website experience. While transaction fees are the same, Stripe lowers them as soon as the user hits $80,000 per month. Paypal, on the other hand, offers discounts starting at $3,000 per month.

Both platforms are very safe and ensure your cardholder’s data to be stored safely. A valuable difference is that Stripe will deposit your funds into your bank account automatically within two days from the payment. When using PayPal, on the contrary, you’ll have your funds immediately available. Still, if you are looking to move them to your bank account you’ll have to wait from 2 to 4 days.

Many business owners prefer Stripe because it lets customers pay you directly on your website. PayPal, on the other hand, requires people to sign in to their PayPal account to pay. Keeping your branding consistent from start to finish might be more challenging with the latter.


Almost 65 % of the market uses PayPal, making it one of the most recognizable names in the online payments industry. While the offer is similar to that of its adversary, one advantage of PayPay is its availability: it is offered in more than 200 countries (while Stripe is currently available in 30 ). Customers tend to be more familiar with PayPal, and therefore trust this platform more than others.

Another advantage of Paypal lays in its better integration into popular point of sales systems. The company also offers its users free card readers, which is always a plus. Furthermore, PayPal offers unlimited free invoicing, while its competitor starts charging for it as soon as you hit $1 million in sales.


Stripe Vs. PayPal: Who Wins?

As you might have noticed, both systems are indeed pretty similar. Assessing which one is best depends on your business needs, the industry you are in, your customers, and the product or service you are offering. If your company is not based in the US, or if you have customers worldwide, PayPal would be a better choice. However, if you are concerned about cart abandonments, Stripe offers a seamless and easy checkout that doesn’t force your customers to leave your site.

Both platforms will ensure a flexible and secure payment process on your website. However, Stripe might not be available in your country and might not be familiar among your customers.

Overall, you should choose Stripe if your business has specific and complex needs, if you are a developer (or have one in-house), or if you process Automated Clearing House payments. Indeed, this platform allows superior customization and integration, something that is not offered by its competitor. On the other hand, if you want an easy-to-use solution, you have a physical point of sale, or you want to make use of a recognizable digital wallet, PayPal is the better choice for you.

The Bottom Line

When setting up your online store and comparing Stripe versus PayPal, you’ll have several considerations to take into account. Among them, the decision about which payment gateway to use is essential. Of course, you are allowed to use several at the same time. However, with more gateways, it might be more challenging to manage your business. Furthermore, you’ll increase the potential for something going wrong.

If you are new to the world of e-commerce, or if you are a smaller or medium business owner, it is advisable to choose one to start. The battle between the two major gateway systems has been going on for some years now, and it will probably continue due to their similarities.

To make a decision, consider your product, your market, your industry, and your customers. Depending on your knowledge of tech, you might prefer one over the other.

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