Which is better, Stripe or Paypal? Which one should I use?
In ecommerce, we usually find two types of payment methods when we buy online: Paypal and Card. Leaving aside Amazon Pay, Stripe and Paypal have become the two major players of online payments today.
Whether you have an website (with an ecommerce) or if you are going to set up one, you will know that the payment gateway is one of the key aspects of the business. Today there are many options available, but there are two that stand out above the rest: Paypal or Stripe.
Stripe vs Paypal
Both platforms give you almost the same benefits and serve for the same. Both serve to collect payments from your ecommerce.
Anyway, there are a number of differences that you should take into account when choosing or using one or another option.
Paypal is a payment solution with much more history than Stripe. They have been in the market for many years. They are a recognized brand, and have the confidence of both customers and merchants.
What advantages does Paypal have?
PayPal is everywhere. In one way or another, it has become the most common way to pay online. In many cases, people can choose between paying with a Card or directly with PayPal account. In fact, I am sure that many of your clients already have an account in PayPal and operate with it.
Having a PayPal account makes things much easier. When a user wants to buy a product in your store, he only has to access his PayPal account. You will automatically receive the money, as well as the shipping address.
Another advantage of Paypal is security, both in collections and payments. Paypal has a refined system of disputes thanks to years and years of experience in the sector.
On the other hand, from the business point of view, PayPal is the default method for the payment of a multitude of ecommerce solutions and plugins.
What disadvantages does Paypal have?
In many occasions, to pay with Paypal it is necessary to have an account. There will be users who will not want to have a Paypal account, but pay with a card. If your store only accepts payments through Paypal, it is possible that many customers choose to buy from another site.
Another disadvantage of working with Paypal is related to redirects. When a user ‘clicks’ on buying through Paypal, we automatically redirect them to the platform itself. Once the payment is made, Paypal returns the user to our store. The problem comes when there is a failure in that redirection. This undoubtedly negatively affects the user experience in our store.
What Commissions does Paypal ask?
The usual Paypal commission is 3.4% on the sale plus a fixed fee of 0.35 euros per transaction for amounts of less than €2,500. For amounts of more than €100,000, the commission goes to 1.9% plus the fixed rate of €0.35.
In the case that you have Paypal Pro, you pay a flat rate of €15, but the variable goes to 2.9% with the fixed rate of €0.35.
Currently, there are few payment solutions in ecommerce that can replace Paypal. The most famous is Stripe. Stripe is one of the most powerful solutions for payment gateways today.
Unlike Paypal, Stripe is not a form of payment in itself, but a solution that replaces the traditional POS. Stripe is a backend solution that allows you to make collections and payments in online stores.
What advantages does Stripe have?
Stripe is a payment solution that stands out for its simplicity and that is limited to processing card payments. Unlike Paypal, Stripe has more payment options available, including Bitcoin, Apple Pay, Android Pay, plus almost all existing debit and credit cards.
Stripe is also integrated with a multitude of tools thanks to its API. This allows you to import Stripe data to different types of software. In addition, it has official plugins for WordPress, Magento or the app for Shopify.
Currently, there are many companies that use Stripe, some very large (like Facebook for example).
What disadvantages does Stripe have?
One of the main disadvantages of Stripe is the installation. The integration process is one of the reasons why many ecommerce have backed down when using this electronic payment solution.
Stripe requires programming knowledge. If you use WordPress, there are a number of plugins that facilitate the process. Even so, it is necessary that you know or be familiar with the tool and its operation.
What commissions does Stripe ask?
Stripe’s commission policy is quite different from Paypal’s. With Stripe you have a fixed commission per transaction of 1.4% and a fixed fee of €0.25 for payment with European cards, and 2.9% plus the fixed for non-European cards.
If we compare it with Paypal, Stripe’s commissions are much lower than those of Paypal. In addition, if your online store receives mainly payments in Europe, the savings in commissions is greater even than with Paypal.
What is better, Stripe or Paypal? What do I have to use?
Really there is not problem to use both. In the end, what it is about is to offer the greatest amount of possible payment options to your clients. And then, that they choose the one that suits them best. The only drawback when using both, is that we will have to manage the charges of our ecommerce through two different platforms, which is somewhat inefficient.
In case you want a simple solution, fast and for now, it is best to use PayPal. In just a few minutes you can have a payment gateway running. In addition, PayPal is a recognized, secure and reliable payment solution.
In case you want to have a full-equipped payment gateway, you should integrate Stripe. In spite of being something more complex, it is a very complete tool that works perfectly.
Ideally if you want to launch your fast e-commerce is to start with PayPal, and gradually integrate Stripe also. With this you can offer the maximum number of payment options to your customers.
And you? With what payment solution do you stay?