In today’s competitive age it has become
an unsaid rule for businesses to maintain an online store or website. However, architecting
a business application to sell services or products digitally; is not so simple
as it sounds. The reason is, numerous aspects are to be taken care of, the most
challenging part being the selection of the apt payment gateway for online
transactions. This is because not picking the right payment channel may lead to
the rejection of your enterprise app even if you offer the best deals. Out of
the existing payment processing companies, the ones that are preferred by most successful
online businesses are Stripe and PayPal, owing to their convenience
quotient and safety standards. Now, comes the trickiest question: “Which
payment gateway outsmarts the other?” In reality, both Stripe and PayPal provide
commendable payment processing services. As such, it becomes difficult for entrepreneurs
to select the appropriate one. However, these two popular payment gateways are
different in certain ways and an entrepreneur must choose the one that best satisfies
their business requirement.
This article compares Stripe and PayPal based on certain
yardsticks, to help you understand which one befits your online business.
Role of a payment gateway
A payment gateway is a payment service that allows the eCommerce
provider to authenticate the credit card payments or direct payment
processing for online sellers, retailers, ebusinesses, etc. A payment gateway
and a merchant account for processing digital payments are provided by payment
service providers. Unlike most other providers, Stripe and PayPal are called
aggregators as they group all clients into one huge merchant account instead of
providing separate ones to each client. This speeds up payment processing
approval for clients.
Stripe
versus PayPal: A Comparative study
Let’s compare Stripe and PayPal based on
the following parameters.
Set-up procedure
Both Stripe and PayPal is easy to set up
using WPF forms. However, Stripe is more customizable as compared to PayPal.
But for embedding a functionality such as a payment card button; Stripe needs
more development skills and may turn out to be complicated for non-technical
users.
Transaction
charges
The basic transaction fee is the same
for both Stripe and PayPal - 2.9% of online sales plus $ 0.30. Also, both do not charge any monthly fee which
means that not a single penny is to be paid when a business is not able to sell
anything. However, the transaction charges involving international sales are
3.9% for Stripe, and 4.4% for PayPal. Therefore, if you are selling products
internationally Stripe turns out to be more profitable. On the other hand,
PayPal charges you lesser in case of micropayments -transactions below 10 $ in
comparison to Stripe.
Customer
Relationship Management (CRM)
Both PayPal and Stripe support most CRMs
irrespective of the platform being used. Hence, businesses can easily integrate
their website with these payment gateways with the help of their plugin or
their API. The only difference here is that Stripe supports a bit more CRMs as
compared to PayPal.
Support
for various currencies across the globe
PayPal operates across more than 200
nations and supports 25 currencies in all. But it restricts its service in
certain countries such as Sudan, Belarus, Liberia, etc. Stripe, on the
contrary, is present in 26 countries but accepts payment from any part of the
world. Moreover, Stripe supports more than 135 global currencies.
Support
extended for various payment methods
PayPal accepts payment from only a
handful of renowned credit cards like American Express, Visa, Master Card, JCB,
etc. Stripe, contrarily, accepts payment from most of the known credit and
debit cards as well as e-wallets such as Apple Pay, Google Pay, Amex Express
Checkout, Alipay, Microsoft Pay, WeChat, Visa Checkout, etc. regardless of
their popularity across the world.
Refund and
dispute management
Generally, the users can file for a
chargeback in cases when the item is not received, the item turns out to be
defective or damaged, credit card charges were not recognized, payment was not
authorized or the customer was charged more than once for one transaction. Once
a chargeback has been approved, the buyer is reimbursed with the desired amount
and the seller needs to pay chargeback fees.
PayPal imposes a charge of $20 on the
seller while Stripe levies $15 as chargeback fees. One added advantage is that
the novel Stripe Radar Functions enables online merchants to avoid card scams.
Hence, you should go ahead with Stripe if you are certain about the possibility
of chargebacks on your digital store and wouldn’t like to end up paying a lot
for the same.
Portability
of data
If you wish to switch to a different
payment processor, Stripe enables you to transfer the entire credit card data
in a PCI compliant manner whereas data portability options for PayPal is not so
user-friendly.
Support
for Customers
PayPal offers customer support via
emails, phone calls, live chats, social media, etc for the questions asked by
customers on PayPal’s online forum. Stripe, on the contrary, offers a 24/7 customer
support option using a paid premium model apart from what Paypal offers.
Customers can speak to Stripe’s agents through online chats and can utilize
their IRC channel when they require immediate technical assistance.
Final verdict
We hope that
the above article has given you a better insight into which payment gateway
should you opt for. For entry-level sellers, Paypal can be a better option
because volume discounts start at $3000 for monthly sales and they offer
reasonable fees for micropayments. Seasoned merchants with good development
team support may opt for the customization option provided by Stripe. Fees of
Stripe becomes more attractive as the business grows.
Reach out
to Biz4Solutions, a well-known mobile
app development company, and a reliable technology partner
in case of any further queries at sales.enquiry@biz4solutions.com.
For
more details please visit:
React
Native App Development Company
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