Stripe vs PayPal: which should you choose?
This is the closest thing on this site to a clear cost winner — Stripe is meaningfully cheaper. But "cheaper" and "better for your conversion rate" aren't always the same thing, which is why this still isn't a simple call for every store.
Quick verdict
Stripe wins clearly on fees and developer flexibility. PayPal's case isn't about price — it's about the conversion lift from a payment brand shoppers already trust, particularly for stores with less-established brand recognition of their own. If your checkout conversion rate matters more to you than shaving fee percentage points, testing PayPal alongside Stripe is a legitimate strategy, not a mistake.
Who should choose Stripe
Businesses prioritising the lowest fees and full control over checkout design, subscriptions and developer integrations.
Who should choose PayPal
Stores that benefit from instant buyer trust and recognition at checkout — particularly newer brands, or audiences less comfortable entering card details directly.
A real, sizeable gap
| Stripe at £5,000/month, £35 avg sale (1.5% + 20p) | £104.60/month |
| PayPal at £5,000/month, £35 avg sale (2.9% + £0.30) | £188.80/month |
| Difference | £84.20/month (£1,010/year) |
PayPal also adds a cross-border surcharge (+1.29% EEA, +1.99% rest of world) on top of its standard rate for international buyers — a further gap Stripe doesn't have at the same scale.
N/A for online-only use
Both are primarily online gateways with no hardware requirement for ecommerce use. If you also need in-person acceptance, Stripe Terminal readers start at £49; PayPal's card-present product is its Zettle brand, covered separately in our SumUp vs Zettle comparison.
The rolling reserve risk
Stripe
Rolling 2-business-day payouts standard; new accounts may see longer initial holds (up to ~7 days) but not an ongoing risk-based reserve in the same way as PayPal.
PayPal
Typically same-day to your PayPal balance — but PayPal reserves the right to hold 21-90 days of funds if it flags your account as higher risk. This is a genuine, underappreciated cash-flow risk worth knowing about before relying on PayPal for a large share of revenue.
What you're signing up to
Stripe
No contract, no setup fee.
PayPal
No lock-in contract — account can be closed at any time, though outstanding fees still apply up to closure.
Which fits your business?
Established or developer-led brand
Stripe — lower fees, full checkout control.
New or lesser-known brand
PayPal (or both) — buyer trust can matter more than the fee gap early on.
High cross-border sales volume
Stripe — avoids PayPal's added cross-border surcharge.
Final recommendation
On cost alone, Stripe is the clear choice — the gap is large and grows further internationally. But don't dismiss PayPal purely on price: if you're not sure how much buyer trust matters for your specific audience, offering both at checkout and measuring which drives more completed sales is a genuinely reasonable way to decide, rather than assuming the cheaper option always wins.
Frequently asked questions
Is Stripe or PayPal cheaper?
Stripe, clearly — 1.5%+20p versus PayPal's 2.9%+£0.30, a gap that widens further on cross-border sales.
What is PayPal's rolling reserve?
PayPal can hold 21-90 days of funds if it considers your account higher risk — a real cash-flow consideration Stripe doesn't apply in the same ongoing way.
Selling both online and in person?
See our Stripe vs Square comparison.
Methodology: Figures pulled directly from stripe.com/gb/pricing and paypal.com/uk/webapps/mpp/merchant-fees official pricing pages on 30 July 2026. See our Editorial Policy.