The question I am asking myself is why I did not know about Stripe earlier? Well, I actually have heard of Stripe, but I really did not pay much attention, as I was content to continue using PayPal for my online business transactions. I have been using PayPal for my business from 2011 to this present day. I cannot say I have ever been disappointed by their services and options.  The ability to create invoices; generate “Buy Now” and “Add to Cart” buttons; and send payment links to customers has been very simple. 

If there is one thing that has been a bit annoying about PayPal, it would be the transaction fees, which have increased over the years.  Currently, the fee per online transaction is 2.59% to 3.49% of the purchase price, plus 49 pennies.  As you can imagine, these fees add up quickly. I was always wondering if there was a cheaper option to collect payments, not including Zelle or meeting customers to accept cash.

Well, I am here to finally say that I have done some research on Stripe. I have no idea of how simple or complex their platform is, but I will say one thing. Their fees are lower! Instead of using a rate that varies, they use a FIXED rate per transaction, which is 2.9%, plus 30 pennies.

So, after finding out the transaction fees of Stripe, I logged onto my PayPal history and compared numbers.  Would I have saved money if I had been using Stripe instead of PayPal the past several months. The answer is YES!  Below, I have listed various payments received via PayPal during the past five months.  I have listed the total purchase price as well as the fee. Right next to that, I have listed what the Stripe fees would have been for the same exact transaction amounts. Have a look:

Transaction – PayPal Fee – Stripe Fee
      $40.00  --  $1.89  --  $1.46
      $69.00  --  $2.90  --  $2.30
      $119.00  --  $4.64  -- $3.75
     $159.00  --  $6.04  --  $4.91
     $195.00  --  $7.30  --  $5.96
     $225.00  --  $8.34  --  $6.82
     $259.00  --  $9.53  --  $7.81
     $279.00  --  $10.23  -- $8.39
     $339.00  --  $12.32  -- $10.13
    $465.00  --  $16.72  -- $13.79

OK, there you have it! Looks like I have been losing money by using PayPal instead of Stripe! With transactions under $100, I am losing about 50 cents per transaction. For the bigger transactions, I am losing $1 to $3 per transaction. I usually conduct at least 30 transactions each month, so it is very clear to me what I need to do! I need to set up Stripe payments ASAP!

I am not saying that people should not use PayPal, as there are other people and businesses that have different services, pricing scales, and various other factors that could cause them to stay with PayPal. I do not normally have any transactions over $500, so I’m not sure if businesses possibly save money on the higher-end transactions.  I am guessing not!

Hey Stripe! Here I come!

​When looking to purchase a service from a local business, you will occasionally come across a payment process that may not be to your liking. Some service-based businesses will require 100% upfront for a new project. As a prospective customer, what do you think of this? Is this policy going to scare you away? Or are you willing to adhere to the policy? If you know very little about this business, and they no have no customer reviews posted online, then this option is very risky. But what if the company was referred by a friend? Or what if the company has over 100 5-star reviews on their Google business listing? Are you more willing to pay 100% upfront? Even if the business has a known reputation for quality, it still may seem sketchy to you to be required to pay upfront. 

There are valid arguments for the 100% upfront payment. Consider, for example, a local résumé writing business. One local résumé writing business determined that requiring upfront payment was the most appropriate policy to implement after examining two possible scenarios:
 
Scenario #1:
The client pays 100% upfront, but is not provided a résumé and/or the résumé does not meet the client’s approval.  In this case, the client would request a refund from the résumé writer. If by chance the client is denied the refund, the client then has the options of processing a credit card chargeback (which are very simple to do) to get his or her money back. Also, the client can respond to the poor results by writing and posting negative reviews about the business all over the Internet, which can be devastating for any small business.  With this in mind, you can rest assured that the writer will do everything he/she possibly can to meet customer expectations and maintain a positive reputation online.
 
Scenario #2:
The writer creates and provides the résumé to the client before accepting any payments. After receiving the résumé, the client suddenly “disappears” and never submits payment. The résumé writer attempts to contact the client to collect payment, but never receives any type of response.  In this situation, the writer has no “convenient” method of retrieving the money from the client.  One of the few options would be taking it to small claims court, but that would likely be more trouble than it is worth.
 
Conclusion of the Business Owner:
The business owner takes more of a risk than the client if there is no upfront payment required for services. Keep this in mind next time you are shopping for specific services in your area!