Stripe or PayPal – Which Payment Gateway Should You Use for Your website?
If you have an online store, no matter which website platform you use, how do you know which payment gateway to use? In this article we will discuss the 2 main payment gateways and why to use either Stripe or PayPal.
We develop sites mostly in WordPress, so when we set up a store within that site, we need to decide which payment gateway is best to use for the client.
My preference is to use both Stripe and Paypal together. So let’s explain both of them so you can get an understanding of how each payment gateway works.
Contents
What is a payment gateway?
What does Stripe and PayPal do exactly?
What type of benefits does Stripe and PayPal provide?
How does PayPal deal with fraud and scammers
How does stripe deal with fraud and scammers
Transaction costs and fees
What payment methods does Stripe and PayPal accept?
Checkout experience
Website integrations
To sum up
What is a payment gateway?
A payment gateway is a platform to accept payments online. Some of them can be quite complex. Like ones that integrate with your particular bank. And those ones can be very expensive and arduous to set up.
Stripe and PayPal are one of the easiest ones to set up. Not to mention Square, which is another payment gateway worth considering.
What does Stripe and PayPal do exactly?
Paypal is an online payment system that has been around forever (1998 to be exact)!
It’s level of expertise has grown tremendously over the years and proves to be a reliable, safe platform for online payments.
Stripe is a newer platform that was founded in 2011. Another trustworthy option, that in my opinion, is a bit easier to navigate around than PayPal.
In layman’s terms, both Stripe and PayPal are like the middleman between your website and the credit card networks and banks. Accepting payments on your behalf from your customer.
What type of benefits does Stripe and PayPal provide?
One of the main benefits would be security
Huge companies like PayPal and Stripe have the expertise to put critical security procedures in place, so if something goes wrong, can help both the buyer and the seller.
Can you imagine trying to build security on your own site, if you were to store customers’ credit card details. It would be an absolute nightmare!
Seller protection
Paypal has seller protection which you can read more about below: https://www.paypal.com/us/brc/article/seller-protection
Stripe also has something similar:
https://stripe.com/au/radar/chargeback-protection
https://stripe.com/docs/disputes
How does PayPal deal with fraud and scammers
PayPal has many procedures in place to deal with fraud and scammers.
Here’s some of their security measures:
- PayPal has developed and invested in a robust security model.
- PayPal looks at every payment that occurs, monitoring signs of fraud. And if necessary alerting customers immediately.
- PP guarantees buyers and sellers never see any financial information, except their own. Your data is also encrypted for added security.
- PP has also established a buyer protection program for customers who believe they are victims of fraud.
You can find out more about Paypals safety and security below:
https://www.paypal.com/re/webapps/mpp/paypal-safety-and-security
How does stripe deal with fraud and scammers
Stripe is certified to PCI Service Provider Level 1. This is the most stringent level of certification available. They have also been audited by a PCI-certified auditor.
Stripe also uses the best security tools and practices to maintain the highest level of security.
You can find out more about Stripes safety and security below.
https://stripe.com/docs/security/stripe
Transaction Costs and Fees
There are a few different fee structures for both Stripe and PayPal.
The best way is to call them and discuss the best option for your products.
PayPal Australia – 1800 054 378
Stripe Australia – https://stripe.com/en-au/contact/sales
PayPal – Credit and Debit Card Payments
1.75% + A$0.30 for domestic cards
3.60% + A$0.30 for international cards
For more pricing options see – http://www.paypal.com/au/webapps/mpp/merchant-fees
Stripe – Credit and debit cards
1.75% + A$0.30 for domestic cards
2.9% + A$0.30 for international cards
For more pricing options see – https://stripe.com/au/pricing#pricing-details
What payment methods does Stripe and PayPal accept?
PayPal accepts all major credit cards.
Stripe accepts all major debit and credit cards as well as Alipay, Amex Express Checkout, Apple Pay, Google Pay, Microsoft Pay, Masterpass by Mastercard, Visa Checkout, and WeChat.
Checkout Experience
When purchasing a product or service from a website, the checkout process can have a huge impact on the usability of your website. Thus, it’s crucial the experience is quick and easy with minimal amount of clicks. A bad experience may discourage a customer purchasing from your website ever again.
Stripe’s checkout process is fairly straightforward. The customer simply enters their credit card number and submits their payment. After that, they can be redirected back to your website.
PayPal is more complicated.
If you purchase a product from a site, then hit the PayPal button there is usually a few more clicks to pass through before you get to the end of the sale. Including the login window or check out as a guest section, then agreeing to their terms and conditions.
You also rely on PayPal to send the user back to your website. Whereas with Stripe this is controlled by the web developer. With PayPal there are almost 5 different clicks to finalise the sale.
There’s also the load times to and from PayPal you need to consider. Sometimes they can be more than a few seconds. Which can cause frustration from the users point of view.
These are all things you need to consider when choosing your payment gateway.
Website integrations
The good thing about Stripe and PayPal is most online website software accepts both of these payment gateways. I’m talking about Shopify, Squarespace, Wix, Weebly and more.
I would also recommend you look at Square as another payment option.
Click here to view their pricing – https://squareup.com/au/en/payments
To sum up Stripe vs PayPal
Overall, I think you can’t go wrong by offering several payment gateways on your website. This gives the user options to choose the one they trust the most.
Definitely having only one payment option is not a good idea as this could possibly prevent customers from buying from your site.
Choosing a payment gateway is one of the most important decisions to make when setting up shop.
If you are a small business I would recommend you start with both PayPal and Stripe. Do your research and test thoroughly.
