Small businesses have a lot of options when it comes to selling products, services, or subscriptions and accepting payments from their customers. In fact, there are so many out there that it can be hard to figure out which one will work best for your small business.

In this post we’ll give you an overview of two popular systems for small businesses to process payments: PayPal vs. Stripe.

Both systems offer an extended set of features that can get very robust (and confusing). We’re going to stick to comparing the basics small business owners care about most — like the kinds of payments you can accept, online sales, in-person/retail sales, ease of use, data portability, and fees.

PayPal Features, Pros, and Cons

Payment Types

With PayPal, your customers will be able to pay with any major credit or debit card (Visa, Mastercard, American Express and Discover), with a bank account, or their PayPal balance.

With PayPal, your customers will be able to pay with any major credit or debit card (Visa, Mastercard, American Express and Discover), with a bank account, or their PayPal balance.

Accepting Online Payments

PayPal’s Standard service is easy to integrate with your website to start selling online. You’ll set up an account, build payment buttons, and copy and paste some code into your website.

Accepting Retail and Offline Payments

If you want to accept payments offline, you’ll need to upgrade to a Pro account for an additional fee (see Cost section below) and either sign up for “PayPal Here” or integrate with another Point of Sale app (most have an additional monthly or annual fee).

Ease of Use

PayPal’s basic feature set is very easy to use. If you want to create a custom-branded checkout experience for your website, or access more complex features, you’ll probably want to hire a developer.

Security and Reputation

This is a major downside of PayPal. If you set up subscriptions or recurring payments through them, expect to be held hostage or risk losing sales by asking your customers to re-enter their payment information.

Cost/Fees

PayPal offers two different plans to accept payments: Standard and Pro. Pro users pay $30 a month on top of processing fees for the ability to customize your online checkout experience, and accept credit card payments via phone, fax, or in-person.

  • Monthly fee: $0 for Standard accounts, $30 for Pro accounts (needed to take payments offline)
  • Online Transactions: 2.9% + $0.30

Retail Transactions:

  • A PayPal compatible card reader will run you a fixed, one-time cost of $14.99 to $99.99 depending on the model and features
  • Swiped transactions: 2.7%
  • Keyed or scanned entry transactions: 3.5% + $0.15

The verdict

It’s worth offering PayPal as an option for payment on your website for customers who want to use it because it’s so simple to set up their basic options. For retail and offline sales, PayPal offers integrations with some powerful POS apps for specific businesses like clothing retailers and restaurants. However, the costs of these can add up quickly, and their monthly fee structure is great if you have a high and consistent sales volume, but frustrating if you just want to do an occasional offline transaction or if your volume changes a lot month-to-month.


Stripe Features

Stripe keeps things simple with a single service level for all customers, and additional features that you can turn on if you want.

Payment Types

Stripe works with all major credit/debit cards (Visa, MasterCard, American Express, JCB, Discover, and Diners Club), and customers can also pay directly via a bank account.

Accepting Online Payments

Stripe integrates with many web platforms like SquareSpace, WordPress, Wix, and Shopify to easily accept online payments. If you want a completely custom online store/checkout experience, you can also work with a developer to access a host of additional features via Stripe.

Accepting Retail and Offline Payments

Using an app like ChargeStripe makes it super simple to accept offline payments. Swipe, scan, or type in a customer’s card info and accept payments from anywhere on your smartphone.

Ease of Use

Stripe can really be as simple or as complex as you want it to be. The vast majority of small businesses will just need an account (here’s everything you’ll need to set one up) , an e-commerce shop like SquareSpace or Shopify that integrates with Stripe for online sales, and an app like ChargeStripe for offline and retail sales, and these are all very easy to set up.

Security and Reputation

Stripe has really set the bar for payment processors in terms of security. Their set up never sends customers’ credit card info to your servers, so you don’t have to worry about storing credit card information securely, even if you have a developer create a custom online shop for you.

Data Portability

If you have subscriptions or recurring payments and you ever want to move to a different system, Stripe allows you to do this without having customers re-enter information.

Cost/Fees

  • Online card transactions: 2.9% + $0.30
  • Online ACH transactions: 0.8% (capped at $5) — this is an amazing option for small businesses that provide services like graphic design or marketing to regular clients.

Retail Transactions:

  • ChargeStripe: an additional 1% per transaction, optional $99 card reader

The verdict

Stripe is a great option for small businesses with its easy-to-use basic features and a growing list of app integrations that are very small business friendly, as well as developer tools for more robust set ups. The per-transaction fee structure for both online and offline sales also makes it very flexible for businesses whose sales volume varies because you only pay when you actually make a sale and it’s much easier to build the costs into your product pricing.