Payment Processing

PayPal vs Stripe: Which Payment Gateway Should You Use?

Side-by-side comparison of fees, features, and which payment gateway fits your business.

Updated March 2026 9 min read
Quick Verdict

Stripe is better for custom online businesses that want developer flexibility and lower transaction fees. PayPal is better if your customers expect PayPal checkout — 400M+ users already have PayPal accounts, and some demographics convert better when PayPal is available.

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Fee Deep Dive

Fee TypePayPalStripe
Standard online rate2.99% + $0.492.9% + $0.30
International surcharge+1.5%+1.5%
Chargeback fee$20$15
Monthly fee$0$0
Currency conversion3-4%2%
Refund feeFixed fee kept on refundsFixed fee returned on refunds
Payout speedInstant to PayPal balance; 1-3 days to bank2 business days (instant for fee)

Pricing and fees are current as of March 2026. Check each provider's website for the latest rates.

At $50,000/month volume with $75 average transaction:

  • PayPal: 667 transactions × (2.99% + $0.49) = $1,495 + $327 = ~$1,822/month
  • Stripe: 667 transactions × (2.9% + $0.30) = $1,450 + $200 = ~$1,650/month

At $50K/month, Stripe saves you ~$172/month ($2,064/year) compared to PayPal — and that gap grows with volume.

Checkout Experience Compared

PayPal's checkout experience includes the PayPal button — which 400M+ users recognize and trust. For many e-commerce stores, adding PayPal as a checkout option can improve conversion rates, since some customers prefer not to enter their card details on unfamiliar sites.

Stripe's checkout experience is more flexible: you can build a fully custom checkout, embed a Stripe form, or use Stripe's hosted checkout page. Developers love this flexibility; non-developers should use Stripe's hosted solution or a Stripe-powered platform like Shopify.

Developer Experience

Stripe wins emphatically. Stripe's documentation, webhook system, and client libraries are considered the industry gold standard. PayPal's API is functional but dated — integration typically takes longer and PayPal's developer experience has historically been more frustrating.

Best for E-commerce

For most e-commerce businesses, our recommendation is use both: Stripe as your primary payment processor (lower fees, better developer experience) and PayPal as an additional checkout option (improves conversion for PayPal-preferring customers). Most major e-commerce platforms (Shopify, WooCommerce, BigCommerce) support both simultaneously.

Best for Subscriptions

Stripe wins for subscriptions. Stripe Billing handles complex subscription logic — free trials, usage-based billing, prorations, dunning — far better than PayPal's subscription APIs. If subscriptions are central to your business model, Stripe is the clear choice.

When to Use Both

Many online businesses run Stripe as their primary gateway and add PayPal as a checkout option. This gives you Stripe's lower fees and developer experience while capturing PayPal-preferring customers. The incremental revenue from improved PayPal conversion often exceeds the operational complexity of managing two processors.

PayPal Pros

  • ✓
    400M+ active accounts — customers already have it
  • ✓
    Highest buyer trust and brand recognition
  • ✓
    Venmo integration for younger demographics
  • ✓
    Pay Later option can increase average order value
  • ✓
    Strong buyer and seller protection policies

PayPal Cons

  • ✕
    Highest fees of the three — 2.99% + $0.49 per transaction
  • ✕
    $20 chargeback fee vs $15 for Stripe
  • ✕
    Account holds and freezes reported with higher frequency
  • ✕
    Older developer experience — integration takes longer
  • ✕
    Checkout experience can feel dated vs modern alternatives

Stripe Pros

  • ✓
    Excellent developer tools and API
  • ✓
    Transparent flat-rate pricing
  • ✓
    Superior recurring billing and subscription management
  • ✓
    135+ supported currencies
  • ✓
    Extensive marketplace and platform tools (Connect)
  • ✓
    Advanced fraud protection with Radar

Stripe Cons

  • ✕
    No built-in POS for in-person sales
  • ✕
    Steeper learning curve for non-technical users
  • ✕
    Account stability concerns for high-risk industries
  • ✕
    Phone support only on custom pricing plans
  • ✕
    Payouts take 2 business days by default
For most small online businesses, Stripe is the better primary processor due to lower fees and better developer tools. Add PayPal as a secondary checkout option if your customers expect it. If you're running a simple store without a developer, PayPal can be quicker to set up initially.
Adding PayPal as a checkout option can improve conversion rates, particularly for stores with audiences that skew older or who shop across many different sites and prefer not to enter card details repeatedly. Test it for your specific audience.
PayPal's Seller Protection covers eligible transactions against unauthorized payment claims. Stripe's Radar machine-learning system is more sophisticated for preventing fraudulent transactions before they occur. For high-risk merchants, Stripe Radar's advanced prevention may result in fewer chargebacks overall.
Yes, and many online businesses do exactly this. Most major e-commerce platforms like Shopify, WooCommerce, and BigCommerce support both processors simultaneously. You can use Stripe as your primary gateway for card payments while offering PayPal as an additional checkout option to capture customers who prefer it.
Stripe is cheaper at virtually every volume level due to lower per-transaction fees (2.9% + $0.30 vs PayPal's 2.99% + $0.49). At $100,000/month, that difference adds up to roughly $350/month or $4,200/year. Both processors offer custom volume discounts for very large merchants, but Stripe's base rates start lower.
Yes, as of recent updates Stripe now supports PayPal as a payment method through its payment method integrations. This means you can use Stripe as your sole payment infrastructure while still offering PayPal checkout to your customers, simplifying your backend while keeping the conversion benefits of PayPal.
Stripe wins decisively for subscription billing. Stripe Billing offers advanced features like free trials, usage-based metering, prorations, coupon codes, and sophisticated dunning management for failed payments. PayPal's recurring billing is more basic and lacks the flexibility needed for complex subscription models like tiered pricing or usage-based billing.

Verdict: Stripe Primary, PayPal as Option

For most online businesses, run Stripe as your primary processor and add PayPal as a checkout option. You get Stripe's lower fees and excellent developer experience while capturing PayPal-preferring customers who might abandon without it.

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Related: Stripe vs Square — compare all three processors with our calculator.