John Stevens  —

If you run an online business, you need to accept payments. But getting paid via an online portal has all kinds of challenges. You need to make sure your solution is secure, functional, and easy for customers to use.

You can have a web payment solution custom built for your site, but software solutions have already solved the biggests challenges, and you can buy their services for a reasonable price. Two of the most popular are PayPal and Stripe. Websites around the world accept payments from these two companies.

Today, we’re going to explore PayPal and Stripe. We compare the two on a number of factors– fees, security, APIs, and more, to help you discover which payment solution is best for your site.

 

What do PayPal and Stripe do?

PayPal and Stripe both accept credit card payments online and in mobile apps. Both solutions can be seamlessly integrated with an existing website. The two aren’t new to this game– they process billions of dollars every year, are two of the most trusted solutions for accepting mobile payment.

 

What’s the Deal with PayPal?

PayPal was founded in 1998 by Luke Nosek, Max Levchin, Peter Thiel and Ken Howery under the name Confinity. In 2000, Confinity merged with X.com, Elon Musk’s online banking company. Soon enough, X.com would focus exclusively on PayPal, which was generating significant interest and respect.

PayPal had its IPO and was bought by eBay for $1.5 billion in 2002, and became eBay’s default payment solution. Today, PayPal operates all over the world. It has become an independent company again, spinning off from Ebay. PayPal moved $228 Billion dollars in 2014 alone.

 

What About Stripe?

Stripe is much newer than PayPal, as it was founded in 2010. Founders Patrick Collison and John Collison created Stripe as a turn-key solutions for web developers who wanted to integrate payment processing into their websites. Stripe stands out from the competition because of how easy it is for software programmers to use.

Stripe received funding from Y Combinator in June 2010, and quickly grew. In 2014, Stripe landed a major partnership with Apple Inc. to help power Apple Pay.

 

Pros to Paypal and Stripe

  • Easy to use for non-coders
  • Extremely secure and the security isn’t on you
  • Customizable to your brand

 

Cons to PayPal and Stripe

  • Transaction fee charges
  • Not designed for brick-and-mortar locations

PayPal and Stripe Comparison Graphic

 

Other Web Payment Solutions to Check Out

PayPal and Stripe are two favoured payment solutions, but there are others that may better fit your needs. Here are a few worth checking out:

Authorize.net

Authorize.net is a comprehensive payment solution, allowing you to accept payments online, via mobile, or at a store. Authorize.net is a very high quality payment gateway, and the 24/7 support is unrivalled. Your customers can use any credit card, or even use PayPal.

Fees: 2.9% 30¢ transaction costs, $49 setup fee, plus $25 recurring charge

Square

Square is the best option for brick-and-mortar shops and in person transactions. You can accept every way your customers want to pay– chip cards, NFC payments, and MagStripe cards are all accepted. Square can instantly turn your smartphone or tablet into a cash register.

Fees: 2.75% per swipe or paid Square Invoice, 3.5% + 15¢ per manually entered transaction

Braintree

Braintree is a simple, robust way to accept payments or enable buying from almost anywhere — in your mobile app or online. On top of the full breadth of PayPal and Venmo customers, Braintree’s integrations give you access to multiple payment methods, simple pricing, security, and customer support.  

Fees: Your first $50K in standard card processing volume comes fee-free. This applies to all card and digital wallet transactions not through PayPal or Coinbase. After you reach $50K, it’s 2.9% + 30¢ per transaction, with discounted rates available for businesses who process over $80k per month.

Recurly

Recurly is a payment solution specifically for subscription-based businesses. It cates to enterprise-level business, so isn’t a great choice for the little guys. Recurly is easy to use, and doesn’t require a massive integration effort.

Fees: 1.25% of revenue + 10¢ per transaction, Core Plan monthly fee is $99, Professional Plan monthly fee is $299.

Dwolla

Dwolla isn’t a typical payment gateway. It specializes in securely connecting with U.S. banks and credit unions to enable safe, fast, bank transfers. This is great if you’re constantly using bank wires.

Fees: No transaction fees for sending and receiving one-time, recurring, or mass payments. If you want to access Dwolla’s advanced features, you’ll need to contact the sales team.