Technology Blog


Stripe Vs. PayPal For Small Businesses (Review)

Today, customers have a wide range of options for making their payments. Unfortunately, this makes selecting the right payment processor(s) for small businesses more complicated and time-consuming.

Small businesses should consider many factors when deciding on a payment service provider, including pricing, ease of use, and customer support. 

In this article, we will compare Stripe and PayPal and introduce you to a few less-famous alternatives. 

We recommend checking out our other comparisons if you manage a nonprofit or a dropshipping business

What Is Stripe All About?

The San Francisco-based Stripe is among the fastest-growing payment service providers in the world. It offers a suite of products designed for facilitating online payment processing.

From the customer’s perspective, payment processors like Stripe and PayPal are essentially intermediaries between their banks and merchants.

This company also offers a few other services like: 

  • Terminal, which provides in-person card processing. 
  • Sigma, a business intelligence platform.
  • Atlas, a simple platform for forming a company.
  • Issuing, a virtual and physical card creation, management, and distribution service.

Stripe’s payment APIs are known for their high customizability, which can be a much-appreciated feature, especially for tech-savvy individuals.

With the wide variety of add-ons that Stripe offers for platforms like WordPress, Drupal, and WooCommerce, you can create personalized payment features for your online store.

Also check Stripe Vs PayPal For Micropayments

What Is PayPal All About?

PayPal, co-founded by a group of famous tech figures, including Elon Musk and Peter Thiel, is a household name in the online payment processing space. PayPal has more than 300 million active users and offers services to more than 28 million businesses.

As the company claims, PayPal can be a fit for you no matter how you do business. It has a very easy-to-set-up platform that everyone without any prior technical knowledge can use.

PayPal also provides other services like contactless payments and debit cards. 

As a small business owner, you can receive PayPal business loans spanning $5000 to $500,000. Based on the loan amount, you can repay it in 13 to 52 weeks. Visit this page to find more information about PayPal business loans.

To decide between these two platforms, first, you have to know your needs and priorities. Then based on those needs and preferences, you need to answer a few questions:

  • Which one is easier to set up and use? 
  • Which one is cheaper? 
  • Which one provides better customer service? 
  • What are their policies towards data portability?

So, let’s answer these questions.

Stripe or PayPal? The Better Option for Small Businesses

Online Transaction Fee2.9% + $0.30*2.9% + $0.30
In-person Transaction Fee2.7% + $0.052.7%
Pricing Modelpay-as-you-gopay-as-you-go
Fraud Protection$0.05 per screened transaction$10 per month+ $0.05 per transaction
Chargeback Fee$15$20
Dispute Fee$15$15
Recurring Billing0.5%$10 per month
Invoicing0.4% per paid invoice,The first 25 invoices free per monthFree
Early Termination Fee00
Data PortabilityYesNo

* All numbers are for standard services in the US. For more details, go to this page for Stripe or this page for PayPal.

For Canadian residents, read our guide comparing Stripe and PayPal in Canada

Is PayPal Easier Than Stripe? 

Simplicity is both companies’ mottos. Signing up for a business account on PayPal’s website and then implementing PayPal on your website is very easy.

However, with Stripe and its customizable bells and whistles, setting up can get a little complicated.

You should also consider your customers’ convenience using these platforms. But, these platforms aren’t that different in this regard. Both are very simple to use for customers.

Verdict: PayPal is the winner in this category, but if you need more customizability and have the required technical know-how, you can go with Stripe.

On the other hand, if you’ve just started a small business, you don’t need many of Stripe’s complex features.

Read Stripe Vs Revolut.

Is Stripe Cheaper Than PayPal?

The short answer is no. But, as you see in the table above, this topic is more complicated. 

Neither Stripe nor PayPal has upfront costs for online payments. But for card-present or in-person transactions, you need hardware that it’s not free.

For online transactions, both companies charge you 2.9% plus 30 cents.

For in-person transactions, PayPal has no fixed fee and thus is a little cheaper.

With regards to fraud protection, Stripe only charges you 5 cents for every screened transaction, while PayPal receives a $10 monthly fee and 5 cents per transaction.

The chargeback fee for PayPal is $5 more than Stripe.

Recurring billing, which is an optional feature, is a tricky one. PayPal asks for a $10 monthly fee, while Stripe asks for 0.5%.

While issuing invoices is free on PayPal, with Stripe, the first 25 invoices each month are free, but after that, you have to pay 0.4% per paid invoice.

Verdict: No clear winner.

Related: Wireless Printers For Shipping Labels.

Does PayPal Have Better Customer Service Than Stripe?

Regarding customer support, Stripe and PayPal provide best-in-class services.

You can receive customer support through help center, email, social media, and phone calls with both companies. So, no one has the upper hand here. 

Verdict: It’s a tie.

What Are Stripe and PayPal’s Policies Towards Data Portability?

Think about the day that, for any reason, you come to the conclusion that neither PayPal nor Stripe is your best option and want to change your payment processor.

You would want to transfer your data to another processor.

PayPal won’t allow such transfers. However, Stripe would help you securely do that.

Winner: Stripe

Consider getting a wireless printer for your small business.

Other Good Options for Small Businesses

One of the most common complaints about Stripe and PayPal is an account freeze for minor irregularities. So, after experiencing these kinds of issues, many business owners try to find a better alternative.

Here are some alternatives we recommend.

SquareShopify PaymentsPaymentCloudVeem
Online Transaction Fee2.6% + $0.102.4% – 2.9% + $0.30Not Publicly Announced$20 Flat Fee for International Payments
In-person Transaction Fee2.6% + $0.102.4% – 2.7%Not Publicly Announced
Best ForIntegrating Online and In-person TransactionsIntegrating All Elements of an Online StoreHigh-risk BusinessesAffordable Invoicing


Square is another familiar name in the payment processing field. This company offers a range of products and services that make in-person and online payments possible. Your customers can make use of Square’s in-person payments through credit cards, chip cards, and NFC-enabled smartphones.

Another notable feature is Offline Mode, with which you can accept swiped card payments when you temporarily don’t have internet access.

Another advantage of Square is that it provides all the required hardware and software for your business. The company also offers one free credit card reader known as magstripe.

Read Square vs Stripe For Small Business.

Shopify Payments

Shopify isn’t a payment processor but a multifunctional platform for building and operating online stores. 

Shopify Payments, one of Shopify services, is specially designed for online stores based on Shopify templates. So, its quick and easy implementation process has made it the first choice for many Shopify stores.

Other than transaction fees, Shopify charges you a monthly service fee. It offers three tiers of services, including Basic Shopify ($29 per month), Shopify ($79 per month), and Advanced Shopify ($299 per month).


High-risk businesses usually face lots of trouble working with Stripe or PayPal. Since the probability of having fraudulent transactions in these businesses is generally high, Stripe and PayPal reject them or terminate their accounts.

PaymentCloud is a solution for these enterprises. Unlike some payment processors who try to exploit their high-risk clients by charging very high fees, PaymentCloud offers reasonable rates and fees.

PaymentCloud also gives a free credit card terminal and provides excellent customer support. One sign of its good reputation is that Stripe refers their rejected clients to PaymentCloud.

One issue with PaymentCloud is the lack of transparency toward pricing. No publicly stated fees are available for this platform.


Veem, a blockchain-powered platform, is that low-cost solution many small businesses desire. 

With Veem, receiving local payments is free, and for international transfers, you just pay a $20 flat fee if you want to receive your money in USD. Additionally, the company won’t charge you any sign-up or monthly subscription fees.

Working with this platform is simple, too. You either invoice your customers, and they send the payment, or you send them payment links. Both methods are free of charge.

The only significant complaint about Veem is some users experiencing unreasonable delays.

Final Verdict: Which One Is Better for Small Businesses?

You should base your decision on many factors, including your needs, priorities, budget, and transaction volume. 

For example, assume you run a brick-and-mortar business, and most of your transactions are card-present. Now, you should pay more attention to in-person transaction fees and costs associated with purchasing card readers.

But, if your presence is primarily online, you may want to consider fraud protection conditions, chargeback fees, and data portability more seriously.

If you want an easy integration between your online and in-person activities, Square could be a better option for you.

If you have a high-risk business, Stripe and PayPal aren’t for you, and something like PaymentCloud would be a better choice.

And if you want a more affordable option, Veem could be your answer.