PayPal vs Stripe. Which is better? who has the lower transaction fees?

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!