How flexible is Stripe in negotiating fees

Routes to finance

Which payment service provider deserves your business the most, PayPal or Stripe? The only way to answer this question is to analyze their respective worth in key categories and then make a decision. In this article, we are going to focus on transaction fees because they are the most obvious aspect of payment processing for current online business owners as well as those who are just starting a new blog or building an ecommerce site.

But first a short introduction to the two (2) companies ...

PayPal vs. Strip: background information

When it comes to online payment companies, PayPal is easy to think of for most online entrepreneurs, people starting new blogs, and the casual consumer. Founded in 1998 and based in San Jose, California, the Californian company operated in 203 markets (countries) and had 152 million registered accounts as of mid-2014. This makes the company the clear market leader in terms of transaction volume. It is a flexible payment option as it has twenty six (26) local currencies.

San Francisco-based Stripe can be considered an upstart in the payment processing space, but is arguably PayPal's biggest competitor. Founded in 2010 and funded by several large buyers including Sequoia Capital and three PayPal co-founders (Peter Thiel, Elon Musk, Max R Levchin), it is our goal to be "a developer-friendly way of making payments online and in mobile apps Accept. "In a relatively short time, Stripe has grown into a multi-billion dollar transaction hub for those looking for payment options other than PayPal.

PayPal vs. Stripe: transaction fees

Both companies have a base rate of 2.9% plus 30 cents per transaction, but there are a few more details to consider. Stripe offers a better price if you're making more than $ 80,000 a month ($ 1 million a year), but you need to contact them via email to begin negotiations.

There are no monthly fees, no refund costs, and no other hidden fees (e.g. setup fees, card storage fees) that come into play.

Stripe transfers your funds on a rolling two-day basis.

PayPal has a tiered transaction price level that starts at $ 3,000 per month (2.5% plus 30 cents), then $ 10,000 per month (2.2% plus 30 cents), and finally at $ 100,000 per month. (not disclosed).

A slam dunk in favor of PayPal, right? Well, only when you consider the various service fees. For example:

  1. Charge cards from websites: $ 10 per month (PayPal Advanced); $ 35 per month (Paypal Pro)
  2. Chargebacks: $ 20
  3. American Express credit card: 3.5%
  4. Refunds: Standard transaction fee
  5. International cards: 1% above the regular transaction rate
  6. Authorization card: 30 cents for unrecorded authorizations and card verification transactions.

Stripe only charges $ 15 for its chargebacks and has a 2% currency conversion fee if required. Otherwise the other services are free of charge.

Is Stripe Better Than Paypal?

All companies have clear transaction histories. However, if you're considering an average transaction of $ 20, standard PayPal transactions would be cheaper than Stripe if you are doing more than $ 5,000 or more in business per month. This requires minimal international transactions and limits customer use of American Express credit cards.

However, if your business is international and needs PayPal Pro, there's a good chance the apparent savings with PayPal are negligible. Other factors need to be considered.

If we lower the average transaction, PayPal's microtransaction pricing policy really comes into play. The micropayment rate of 0.5% + 5 ยข per transaction offers the benefit for now (Note: Stripe doesn't have a micro-policy as of now.) Make sure you get it when you sign up for PayPal.


PayPal offers prospects a well-known brand with a groundbreaking history in online payments. Because of the transaction fees alone, the small business owner with a US and North American customer base would likely save a bit of money with PayPal. As the business grows, the total cost of Stripe will be a more attractive option.

Of course, transaction fees are just one of the factors to consider when choosing an online payment solution, such as ease of use, data portability, acceptance of Apple Pay on your website, etc. Click here to read the second part. this review of PayPal against Stripe here.