Stripe vs PayPal: Which Is the Cheaper Option?

Fight and Waive Fees Stripe vs PayPal: Which Is the Cheaper Option?

Stripe vs PayPal: Which Is the Cheaper Option?

In the 21st century, online financial facilitators are more popular than ever. Companies such as PayPal, Venmo, and Stripe make it easy for buyers and sellers to complete transactions. This convenience isn't free, however. If you buy or sell online, you'll want to know how fees stack up, especially when it comes to Stripe fees vs. PayPal fees.

What Is Stripe?

Founded in Palo Alto, California in 2009, the payment processing outfit known as Stripe Inc. boasts dual headquarters in San Francisco and Dublin, Ireland. In 2011, the company received a much-appreciated infusion of cash from investors, including PayPal co-founders Elon Musk and Peter Thiel.

In 2022, Stripe teamed up with the Ford Motor Company to process transactions. Stripe also recently partnered with streaming service Spotify to help content creators collect the benefits of a monetized account.

Other Merchant Payment Services to Know About

Stripe and PayPal are not the only games in town. In 2021, several online payment service platforms help customers and businesses connect. Among the most popular are:

  • Adyen
  • Alipay
  • Amazon Pay
  • Apple Pay
  • Atos
  • Authorize Net
  • BitPay
  • BPAY
  • Braintree
  • Creditcall
  • Digital River
  • Dwolla
  • Euronet Worldwide
  • First Data
  • Fortumo
  • Google Pay
  • Heartland Payment Systems
  • Paya
  • Payment Wall
  • Payoneer
  • PayPay
  • PayPoint
  • Skrill
  • TransferWise
  • WePay
  • Xsolla

Reduce PayPal Merchant Fees

Seller fees can take a big cut of your profits, especially if you are a freelancer. The best way to get out of paying such fees is to avoid them in the first place if you can. Virtual assistant trainer Kayla Sloan offers these seven ways freelancers can reduce PayPal fees:

  1. Invoice less often

Being paid once a week can keep your cash flow going, but the PayPal fees associated with regular invoicing can add up in a hurry. Opting for once-a-month payments can reduce the number of earnings that go straight into PayPal's pocket.

  1. Alter the way you make PayPal withdrawals

Instead of making instant transfers that can cost up to $10 each, move your money from PayPal into your bank account with a standard transfer. Alternately, use your PayPal debit card at a MoneyPass ATM. There are more than 30,000 such machines in the country, so it's pretty easy to find one.

  1. Use FreshBooks accounting software

According to Sloan, FreshBooks has an agreement with PayPal that reduces merchant fees to a flat $0.50 per invoice. Be sure to check the "PayPal Business Payments" box on each invoice you create and send through FreshBooks.

  1. Ask clients to pay you as a friend or family member

Typically, money received from clients and customers is subject to 3.49 percent of the purchase amount plus $0.49 per transaction. When you receive payment from a friend or family member, the transaction is free on both ends.

  1. Factor fees into your invoice

Slightly raising your rates to cover PayPal fees is an easy way to avoid losing profits.

  1. Use a payment platform other than PayPal

The most obvious way to avoid PayPal merchant fees is to stop using PayPal altogether. Instead, ask clients to pay you for your products or services via direct deposit or paper check.

  1. Deduct PayPal fees from your taxes

You may want to consult with your tax professional to verify, but Sloan says that PayPal fees are tax-deductible, as long as you include them on Schedule C of your IRS tax return.

Stripe Merchant Transaction Fees

Online card and wallet payments2.9% + $0.30
In-person payments through Stripe's Terminal product2.7% + $0.05
ACH Credit payments$1 per payment
ACH Direct Debit payments0.8% up to $5 maximum
Wire payments$8 per payment
Checks$5 per check
  • 1% added to fees for international cards or currency conversion

You May Not Have to Pay Every Stripe or PayPal Merchant Fee

If you think that as a merchant you are stuck with whatever fee Stripe or PayPal opts to assess, please think again. DoNotPay has helped plenty of people get such fees waived, and we may be able to help you, too.

Here's how:

  1. Search "appeal fees" on DoNotPay, choose the Fight and Waive Fees product, and select the type of fee you want to appeal. 
  2. Select the merchant you want to appeal fees for and enter the details of your transaction, including an associated account if you have one. 
  3. Submit your case! DoNotPay will generate the best argument for your case and make sure your fee waiver request gets sent to the merchant for processing. 

Within minutes, the DNP artificial intelligence robot lawyer will compose your best argument and contact the merchant on your behalf.

Other Fees DoNotPay Can Waive

We can request waiving of a variety of fees, including overdraft fees, ATM fees, credit card fees, wire transfer fees, and international transaction fees. Did an airline overcharge you for baggage? Has your bank charged you too many overdraft fees? DoNotPay may be able to get those fees waived.

In addition to waiving Stripe vs. PayPal fees, DoNotPay can submit waiver claims for:

DoNotPay Makes Life Easier

There are a lot more ways DoNotPay robo-lawyer can help you. Join us today to save time and money!

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