If you have any kind of online presence that involves money changing hands you are going to need a payment processor. A processor lets people donate to blogs, buy kitten posters, or really conduct any kind of business with money. Unless you are feeling particularly adventurous you are going to use one of the two titans of payment processing: Paypal and Stripe. If you are wondering which one is best you’ve come to the right blog post. We are going to break down both of these companies and explore their pros and cons. By the time we reach the conclusion you will be so educated that you can make your decision with confidence.
Charges are going to be a big factor is your decision because it affects how much revenue you make on each transaction. On the surface it is very simple, there is no difference. Both of these services come with no monthly fee or installation fee. Both Paypal and Stripe charge 2.9% 6+ 30¢ per successful transaction in the USA.
If you are making less than $3,000 each month then there is no real difference. However, those making more than $3,000 a month will find that Paypal drops their rates the more monthly sales you have. However, recently Stripe has made their charge less if you have increased volume. If you are processing more than $80,000 per month you have the option to negotiate a better rate.
Also note, for Paypal these charges change depending on which country the customer is buying from.
That said it might seem like Paypal and Stripe are even on this count. However, Paypal sneakily adds a bunch of fees that can be added to the base fee. It costs $30 per month to customize the checkout page. There is an extra 1% charge if a transaction crosses the borders of another country. There is a 3.5% transaction fee if your customer’s bank is American express
Also there is a fixed fee of 30¢ if you refund your customer.
Stripe boasts of a single rate for each transaction even if that transaction fails, even if you want customize your checkout page, or accept payment from another country.
Throughout this post you are going to see a pattern emerge Stripe fights to always be transparent and crystal clear.
Technology expert Brian Proffitt defines APIs as “sets of requirements that govern how one application can talk to another.” They are the programming rules that let apps and websites interact with each other. They even define how networks interact with each other.
Why does that matter? Well, the payment processing system uses APIs to link between your website and their system. So if that link is hard to integrate or badly documented, you are going to run into fundamental errors when you try to set up a link between your site and the payment processor site.
This is a case in which Stripe is much stronger than Paypal. Paypal’s APIs are difficult to integrate into websites and they are not flexible. Their interfaces are cryptic and non-standard.
A large number of people have switched from Paypal to Stripe over their frustration with Paypal’s poor APIs.
Stripe’s alternative is much stronger; it integrates well with every major programming language. Embedding it into your website is just as simple as copying and pasting the code.
This is another big win for Stripe because it allows you to customize how your customer’s check out. Paypal is rigid in their checkout process and allows for little customization. Perhaps worst of all it redirects customers away from your website. That can be disconcerting to customers. It is a loss of control and the customer always wants to feel in control.
Stripe works with a widget that pops on the screen without removing your customer from your website. It is a simple interaction that works on a laptop just as well as on mobile devices.
As you can see here: https://stripe.com/docs/checkout
When dealing with money matters it’s important to be able to manage errors and problems. Paypal has a time consuming call based tech support that doesn’t guarantee you will get your issues resolved. In fact, if you Google around you will find horror stories of Paypal’s tech support driving people away from their entire company.
Stripe is the total opposite. They want to communicate with their customers as much as possible. You have the opportunity to discuss your issue through email, chat, phone and even twitter. The chat rooms link you up with the developers of Stripe so you can speak with the experts directly. They are devoted solving your problem and will not stop working with you until they have.
It might seem like I’m biased towards Paypal but I honestly just summarizing what I’ve been reading all over the web. To prove my lack of bias I will point out a major weakness in Stripe. The service is only available in 18 countries mostly in the western hemisphere. If you are in one these 18 countries then the service will accept payments from anywhere. Paypal on the other hand is available in 203 countries all over the globe.
Obviously, I recommend you go with Stripe. If worst comes to worse and you have technical problems then they will help you through them. Their rates are simpler. When it comes to integrating them into your website their APIs are simpler. Yes, their availability is limited but if you’re reading this blog the odds are you are from the Western world and will have access. If you aren’t they have a notification system for when Stripe becomes available in your country.
In the end it is your decision. The truth your business will succeed or fail on much more than your payment processor so don’t stress. Regardless of whether you use Paypal or Stripe I hope I have been able to shed a little light on the nuances of both services.