Stripe vs PayPal: Which Payment Method to Choose as a Dropshipper?

Stripe vs PayPal: Which Payment Method to Choose as a Dropshipper?

When you start your dropshipping business or online store, you need to set up a reliable payment method for your users. Currently, Stripe and PayPal are the leading providers of online payment portals that help you transfer money to your bank account without challenges.

However, how can you decide between Stripe vs PayPal payment provider? Which one is a better choice?

In this article, we discuss the pros and cons of both payment methods, keep exploring…

How Does Stripe Help You

Stripe is a leading online portal for payment, which allows your business to send and receive money via an internet connection. In the ecommerce world, this means that you can receive payments from your customers in the blink of an eye. As soon as the customer makes a purchase, they can clear their payment using Stripe easily.

One of the reasons Stripe is popular is that it is customizable, which means developers are able to adjust a lot of features according to the look and feel of their website.

How Does PayPal Help You

Similar to Stripe, PayPal is another payment service offered for online payments. It is widely known for simple international transactions as well. They have millions of customers, who receive and transfer money to and from their bank accounts regularly.

The benefit of using the PayPal payment portal on your website is that almost everyone has an account on PayPal. Therefore, it is easier to use PayPal to receive ecommerce or dropshipping payments.

Stripe vs PayPal: Let’s Compare

There are benefits of using both Stripe and PayPal payment portals, but which one is better for your dropshipping business? Let’s find out by comparing Stripe vs PayPal.


Stripe and PayPal both have a transparent system for a usage fee. This is also the reason why these payment portals are widely known in the industry.

To use Stripe and PayPal, you need to pay 2.9% + 30¢ for every transaction. There are plans with no monthly fees, contracts, or setup costs.

If you can cover the threshold for monthly sales, you can easily reduce your pricing by using both of these payment methods. For example, Stripe reduces your fee per transaction if you have USD 80,000 worth or more of sales every month and PayPal reduces the same at just USD 3,000 worth of monthly sales.

The only distinction you can make in Stripe vs PayPal based on cost is as per the monthly transactions total you make in your business account.

Transaction Fee

Now, the RADAR transaction fee is different. It is a type of service cost charged by Stripe on every payment or transaction from your website. This charge of .05¢ is applied even when your transaction fails.

For example, in your dropshipping store, the user has placed an order and made payment using their credit card. But, they used the wrong expiry date and the transaction was terminated. Even then, you are charged the RADAR fee.

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When you use a standard account on Stripe, this fee is waived and you no longer need to worry about the charge.

It is amazing that PayPal doesn’t have this RADAR charge, so you can reduce the overall pricing by using the PayPal payment portal.


There are cases when a customer doesn’t agree with a transaction and they report it to their bank. Based on this complaint, the bank may think that it is a fraud and inquire about the situation. To protect the rights of the customer, if the bank reverses the money, a chargeback is applied to your account. You need to pay this chargeback as well as the processing fee that was already applied to the transaction.

Stripe takes a chargeback of USD 15 and PayPal takes USD 20.

If the customer or cardholder starts over-using this facility, it can be taxing (and damaging) for your business because you need to pay the above fee every time a chargeback happens.

Customer Support

Stripe vs PayPal for customer support are both great options.

Stripe has various methods that help customers reach the support centre, such as chat support, social media, email support, or calls. You can also visit the website and check the FAQs and help centre material to resolve your problem.

Similarly, PayPal also offers a wide range of methods to reach customer support. You can check the community forum, reach out via social media, help centre, live chat, email, or phone call. All these methods are quite responsive, so select according to the urgency and type of issue.

Regardless of the ease of connecting with customer support, PayPal has a fixed timing for a response. They don’t work 24/7, but Stripe does. They have recently announced that Stripe support now has 24/7 access for customers on chat and phone.

Ease of Use

Stripe vs PayPal have no contestant when it’s about their ease of use. Both payment portals are thoroughly checked to improve user-friendliness. Therefore, every dropshipping owner can ensure a simple payment mode to customers with Stripe as well as PayPal.


Stripe and PayPal are PCI compliant, which is a Payment Card Industry Data Security Standard created for every organization accepting online payments. For customers using credit cards or other online methods to make a payment or purchase, PayPal and Stripe payment portals are the best choices. They help securely transfer money from the customer’s account to the business owner's account.


When talking about the setup of Stripe vs PayPal, Stripe has better customization options when compared to PayPal. On Stripe, you can include and integrate different features. However, this also means that Stripe requires some technical know-how to include features, such as Pay with Card. You need to know about coding and development, which can be difficult for business owners who don’t understand coding.

A solution to this problem is using WPForms, which has a pre-built setup for both Stripe and PayPal. You can use these setups and add features to your Stripe or PayPal payment portal.


Both Stripe and PayPal have an option to integrate with Shopify and WordPress. You can additionally check their integration details on their respective website for clarity.

If you are using a trusted ecommerce website platform, you may get an option to integrate both Stripe and PayPal.

Data Portability

There are situations in which dropshipping business owners decide to move their payment processors to a different provider. In that case, you need a data portability feature.

Fortunately, Stripe values your decision and helps you port your data to another company in a PCI-compliant way. However, PayPal doesn’t support data portability. If you decide to move from PayPal to another processor, it will be a nightmare because you won’t have the feature to move your data without challenges.

Which One Is Better

In this discussion of Stripe vs PayPal, which one turned out to be better for you?

The answer is simple, it depends on your ecommerce requirements. Depending on your industry, website hosting, what you are offering to customers, the frequency of transactions, monthly sales, etc. Based on all these factors, you can decide the right type of payment portal for your business.

Therefore, it is important that you create a list of things that are in the pros and cons of both PayPal and Stripe to arrive at a conclusion. This list will help you gain clarity.

Read the above discussion and identify the right payment portal for your business.

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