ARDOTOOLS · GUIDES
Stripe vs PayPal fees: which costs less?
On a standard US sale, Stripe is cheaper than PayPal Checkout at every price, but the gap is small on big sales and large on small ones. Here is the arithmetic, on three sale sizes.
The rates, side by side
For a US business accepting a domestic payment, the published standard rates are:
- Stripe, cards and wallets2.9% + $0.30
- PayPal Checkout3.49% + $0.49
- PayPal, standard card payments2.99% + $0.49
Both add 1.5% when the customer is international. Stripe adds another 1% if currency conversion is needed and 0.5% for manually entered cards. Both also charge a fee when a customer disputes a payment. Rates differ by country, product and negotiated volume, so check your own account before you rely on these.
Three sales, worked out
The fee is the percentage of the sale plus the fixed amount. Net is what you keep.
A $10 sale
- Stripe: 2.9% × $10 + $0.30$0.59 (5.9%)
- PayPal Checkout: 3.49% × $10 + $0.49$0.84 (8.4%)
A $50 sale
- Stripe: 2.9% × $50 + $0.30$1.75 (3.5%)
- PayPal Checkout: 3.49% × $50 + $0.49$2.24 (4.5%)
A $200 sale
- Stripe: 2.9% × $200 + $0.30$6.10 (3.05%)
- PayPal Checkout: 3.49% × $200 + $0.49$7.47 (3.7%)
PayPal Checkout costs more by 0.59% of the sale plus $0.19, so the gap never closes. It is $0.25 on a $10 sale, about $0.49 on $50 and $1.37 on $200. In percentage terms it is the small sale that hurts: the fixed fee is 4.9% of a $10 sale and only 0.25% of a $200 one.
What changes when the buyer is abroad
On a $50 sale from an international card, both processors add 1.5% (so Stripe is 4.4% + $0.30 and PayPal Checkout is 4.99% + $0.49):
- Stripe$2.50
- PayPal Checkout$2.99
The difference stays about the same, but each of you now loses around 5% to 6% of the sale. If a share of your customers is overseas, price for that case rather than the cheapest one. If a currency conversion is also needed, add 1% on Stripe, and check PayPal's separate currency-conversion fee, which I have not worked into these numbers.
So should you only use Stripe?
Not necessarily. The fee is not the only reason to offer a payment option:
- Some buyers prefer to pay with PayPal and may leave if it is not offered. Whether that matters depends on your customers, so look at where yours come from.
- You only pay for what is used. Offering both costs nothing unless the buyer chooses the more expensive one.
- Small sales are where it adds up. If you sell a lot of items under $15, the fixed fees decide your margin more than the percentage does.
If you offer both, price as though the more expensive one is used. If you are happy to lose a few sales instead, you can steer buyers toward the cheaper option, for example by making it the default.
Mistakes to avoid
- Comparing only the percentages. 2.9% against 3.49% looks like a 0.6-point gap. On a $10 sale the fixed fees make it 2.5 points.
- Ignoring disputes and refunds. Both processors charge a fee when a customer disputes a payment. The amounts are on their fee pages, and they belong in your costs if you sell something that gets disputed often.
- Quoting old rates. Both companies change their pricing. Re-check the page when you reprice.
Run your own numbers
The Stripe Fee Calculator and the PayPal Fee Calculator start from the rates above. Enter a sale amount and get what lands in your account, or enter the amount you want to receive and get what to charge. If you sell on Etsy, what you keep from an Etsy sale covers that platform's fees.
These are planning estimates, not accounting or tax advice. Your own Stripe and PayPal accounts and their published fee pages are the authority: Stripe pricing, PayPal business fees.