Stripe vs PayPal for Online Payments: Which Should You Use?
Stripe and PayPal are the two most popular online payment processors. This comparison covers fees, features, integration options, and which is right for your business.
Stripe and PayPal dominate online payment processing, but they are built for different audiences. Stripe is developer-first, infinitely customisable, and preferred by SaaS and e-commerce builders. PayPal is consumer-facing, widely trusted, and easier to set up for quick selling.
Stripe vs PayPal: The Definitions
Stripe is a developer-focused payment infrastructure platform used by startups, SaaS companies, and large enterprises. It offers a powerful API, extensive payment method support, subscription billing, and financial tools in one unified platform.
Formula
Stripe fees (UK): 1.5% + 20p for UK cards; 2.5% + 20p for EU/EEA cards; 3.25% + 20p for other international cards. No setup or monthly fees.
Example
A £100 UK card transaction on Stripe costs £1.70 (1.5% + 20p). The same transaction on PayPal costs £3.19 (2.99% + 30p) for a UK seller.
PayPal is a global consumer and business payments platform with 400+ million active accounts. It is known for consumer trust, buyer protection, and frictionless checkout, but has higher fees than Stripe and less developer flexibility.
Formula
PayPal fees (UK): 2.99% + 30p for standard transactions; 3.49% + 49p for cross-border transactions. Currency conversion adds 3–4% on top.
Example
A £100 payment via PayPal checkout costs the seller £3.29 in fees. A cross-border transaction at £100 would cost £3.99 in processing plus additional currency conversion fees.
Key Differences
- 1Stripe fees (1.5% + 20p for UK cards) are lower than PayPal (2.99% + 30p) for standard domestic transactions
- 2Stripe requires developer implementation or a no-code tool; PayPal can be set up with a button in minutes
- 3PayPal has consumer brand trust that increases checkout conversion for some audiences; Stripe's checkout is white-labelled
- 4Stripe supports subscription billing natively; PayPal subscriptions are available but less flexible
When to Use Stripe vs PayPal
For SaaS, subscriptions, or custom e-commerce, Stripe is the stronger choice for fees, flexibility, and developer tools. Add PayPal as a secondary option to capture buyers who trust PayPal's buyer protection. For simple quick-start selling, PayPal's ease of setup wins.
Calculate It Now
Common Mistakes to Avoid
Choosing PayPal for everything because it is easier to set up, then paying significantly more in fees at scale
Not offering PayPal at checkout at all, up to 30% of online shoppers prefer PayPal and will abandon if it is not available
Ignoring the currency conversion fee on PayPal, which adds 3–4% on top of the transaction fee for international sales
Sponsored
Frequently Asked Questions
Are Stripe fees lower than PayPal fees?↓
For UK card transactions, yes. Stripe charges 1.5% + 20p per transaction. PayPal charges 2.99% + 30p. On a £1,000 monthly volume, Stripe saves approximately £15 compared to PayPal. The saving scales with volume. International transactions narrow the gap as Stripe's rates rise for non-UK/EU cards.
Is Stripe safe for businesses?↓
Yes. Stripe is PCI DSS Level 1 certified (the highest level), processes hundreds of billions in payments annually, and is used by companies including Amazon, Shopify, and Salesforce. It has strong fraud detection (Stripe Radar) built in.
Can I use both Stripe and PayPal?↓
Yes, and many businesses do. Offering both maximises checkout coverage. Stripe handles credit/debit cards and digital wallets (Apple Pay, Google Pay); PayPal captures PayPal-loyal buyers. Most e-commerce platforms (Shopify, WooCommerce) support both simultaneously.
Does Stripe work for freelancers?↓
Yes. Stripe offers Stripe Invoicing (free for basic use) and Stripe Payment Links, which require no website or coding. Freelancers can send invoice links, accept card payments, and set up recurring billing without any development work.
What is the Stripe processing fee in the UK?↓
Stripe UK processing fees: 1.5% + 20p for standard UK cards; 2.5% + 20p for EEA cards; 3.25% + 20p for other international cards. There are no monthly fees, setup fees, or minimum transaction requirements. Volume discounts are available by contacting Stripe.