About 11; min
Stripe charges 2.9% + 30¢. PayPal charges 3.49% + 49¢. On $100,000 in annual sales, that’s a $1,200 difference. But PayPal has 430 million active users who trust that blue button. We calculated the exact cost difference at every revenue level and identified the scenarios where paying more for PayPal actually makes you more money.
All fees verified March 2026 from stripe.com and paypal.com.
Fee Comparison
| Transaction type | Stripe | PayPal |
|---|---|---|
| Online card payment | 2.9% + 30¢ | 3.49% + 49¢ |
| In-person | 2.7% + 5¢ | 2.29% + 9¢ |
| International | 3.9% + 30¢ | 4.99% + 49¢ |
| ACH/bank transfer | 0.8% (cap $5) | 1% (min $1) |
| Invoicing | 2.9% + 30¢ | 2.99% + 49¢ |
| Chargeback fee | $15 | $20 |
| Refund policy | Full fee returned | Keeps 49¢ per refund |
| Monthly fee | $0 | $0 |
Stripe is cheaper on every online transaction. The gap: 0.59% + 19¢ per transaction. Small on one sale, massive at volume.
$3,200 vs $3,980 at $100K /year
$50K revenue: Stripe $1,600 vs PayPal $1,990 → Stripe saves $390
$100K revenue: Stripe $3,200 vs PayPal $3,980 → Stripe saves $780
$500K revenue: Stripe $16,000 vs PayPal $19,900 → Stripe saves $3,900
The gap grows with revenue. At $500K, Stripe saves almost $4,000/year.
Where Stripe Wins
- Lower fees on every online transaction — 0.59% + 19¢ less per sale. At volume, this is thousands per year.
- Developer tools — best API documentation in fintech. Custom checkout, webhooks, subscription billing, marketplace payouts (Connect). If your team writes code, Stripe bends to fit any payment flow.
- Subscription billing — Stripe Billing handles metered, tiered, and usage-based pricing natively. PayPal’s recurring billing is basic.
- Global reach — 135+ currencies, 46+ countries. PayPal operates in fewer markets with higher international fees.
- Full refunds — Stripe returns the entire processing fee on refunds. PayPal keeps 49¢ per refund. High-refund businesses (fashion, digital products) save significantly.
- Better fraud prevention — Stripe Radar uses ML trained on billions of transactions. More sophisticated than PayPal’s fraud tools.
Where PayPal Wins
- Customer trust — 430 million active users. Many online shoppers only buy from stores that offer PayPal. The blue button converts hesitant buyers. PayPal claims 28% higher checkout conversion.
- In-person payments — Zettle at 2.29% + 9¢ beats Stripe Terminal at 2.7% + 5¢ on most transaction sizes.
- Buyer protection reputation — customers feel safer buying from unknown stores through PayPal. This matters for new e-commerce brands without established trust.
- No-code setup — add a PayPal button to any website without writing code. Stripe requires integration (or a platform like Shopify).
- PayPal Credit / Pay Later — built-in financing lets customers split payments. Increases average order value. Stripe offers this through third-party integrations only.
The Smart Strategy: Use Both
This isn’t an either/or decision for most businesses. The winning strategy:
- Stripe as primary processor — handles credit/debit cards at 2.9% + 30¢
- PayPal as checkout option — captures the 10-15% of buyers who only trust PayPal
Most transactions go through Stripe at the lower rate. PayPal captures incremental sales you’d otherwise lose. Net result: lower average processing cost AND higher conversion.
Who Should Pick What
Online-only business: Stripe primary + PayPal as option. Best of both worlds — low fees on most transactions, maximum checkout conversion.
SaaS or subscription business: Stripe only. Stripe Billing handles complex subscription logic. PayPal’s recurring billing is too basic for SaaS.
New e-commerce store, no brand trust: PayPal prominently displayed. When nobody knows your brand, PayPal’s buyer protection logo builds trust. Add Stripe later as your brand grows.
In-person business: PayPal Zettle (2.29% + 9¢). Cheaper than Stripe Terminal for most in-person sales. Consider Square as well.
High-refund business (fashion, digital): Stripe. PayPal keeps 49¢ per refund. On 500 monthly refunds, that’s $250/month wasted with PayPal.
International sales: Stripe. Lower international rates (3.9% vs 4.99%) and better currency conversion (1% vs 3-4% spread).
Freelancer invoicing: Either works. PayPal is more recognized by clients. Stripe is slightly cheaper. Difference is minimal at low volume.
Frequently Asked Questions
Is Stripe always cheaper than PayPal?
For online payments: yes. For in-person payments: PayPal Zettle is cheaper. For invoicing: Stripe is slightly cheaper. Overall, Stripe saves $780-3,900/year depending on volume.
Can I offer both at checkout?
Yes. Most e-commerce platforms (Shopify, WooCommerce, Squarespace) support both simultaneously. Customers choose their preferred method at checkout.
Which is more secure?
Both are PCI DSS Level 1 compliant. Stripe’s Radar ML-based fraud detection is more advanced. PayPal’s buyer/seller protection is more consumer-facing. Both are safe for merchants and customers.
All fees verified March 2026 from stripe.com and paypal.com/us/business/fees.
