Stripe vs PayPal Fees: What Each One Actually Takes

The two numbers on the pricing page, and the three that are not

Every processor advertises the same shape: a percentage of the transaction plus a small fixed amount. That pair is the whole story only for a domestic card paid in your own currency, which for a purely local business is most of the volume and for anyone selling online is not. The three lines that are not on the front of the pricing page are the cross-border surcharge, charged when the card was issued outside your market; the currency conversion spread, charged when the money has to change currency to reach your account; and the dispute fee, charged per chargeback and generally not returned even when the dispute goes your way.

The conversion line is the one that separates the two providers most. In the United States, Stripe's published conversion charge has been about a third of PayPal's, which is what turns a $0.78 gap on a domestic card into $2.78 on a converted foreign one. Two structural details are worth knowing before you compare your own statements. First, Stripe's European and British pages publish a full replacement rate for non-domestic cards rather than an additive surcharge — a foreign card is charged one flat higher percentage, not the domestic rate plus a top-up — while its Canadian and Brazilian pages publish additive surcharges. Second, conversion is only charged when a conversion actually happens: if you hold a balance in the customer's currency, or settle in it, the line disappears from both providers.

Where PayPal actually wins

On very small transactions, if you qualify for the micropayment schedule. PayPal's US micropayment tier trades a higher percentage for a much smaller fixed fee — around 4.99 percent plus $0.09 at the time of writing against the standard 3.49 percent plus $0.49 — and on a $5 sale that works out at about $0.34 against $0.45 through Stripe. The crossover sits a little under $10: above it the higher percentage costs more than the smaller fixed fee saves. If your average order is a few dollars, this is not a rounding difference, it is a fifth of your fee bill. The equivalent euro tier exists but its fixed component is published inconsistently across PayPal's own European pages, so read the one for your country rather than assuming.

The other place PayPal wins is not on the fee at all. Offering it as a payment option raises completion rates for some audiences, particularly for first-time buyers on a site they do not know, because the buyer never types a card number into your checkout. A one-point improvement in checkout completion is worth more than the entire fee difference on a typical basket, which is why plenty of merchants run both: card payments through the cheaper processor and PayPal as an alternative button. The honest way to settle it is to measure completion with and without the button on your own traffic, rather than to argue about percentages.

How to read this comparison in six months

Assume the specific percentages above are out of date and the shape is not. Both providers revise their published rates periodically, both differentiate by country far more than most comparisons admit, and both have moved rates in opposite directions in different markets in the same year. Stripe's European card rate has been running at roughly half its US rate, which is not a rounding artefact but a reflection of interchange caps in the European Union; a comparison written from a US pricing page and applied to a French merchant will be wrong by a factor of two on the biggest line.

The durable method is to pull one month of your own settlement report, group the transactions by the four cases in the table — domestic card, foreign card, converted, small ticket — and apply each provider's current published rates to your actual mix. That takes twenty minutes and beats any general comparison, including this one, because the answer depends far more on where your customers' cards were issued than on which logo is on the pricing page. Redo it whenever either provider announces a change, or once a year if neither does.

Frequently asked questions

Can I pass the processing fee on to the customer?

It depends where you are. Surcharging consumer card payments is prohibited across the European Union and in several other jurisdictions, and where it is allowed the card networks impose their own disclosure and cap rules on top. Building the cost into the price is legal everywhere and is what most merchants do. Check your own regulator before adding a line item at checkout.

Which one is cheaper for subscriptions?

Add the recurring-billing layer before you compare. Stripe charges its billing product as an extra percentage of recurring volume on top of the per-transaction fee, so a subscription business pays more per charge than the pricing-page headline suggests. PayPal bundles recurring payments differently. The comparison that matters is your total monthly cost including the billing layer, the failed-payment retries and any invoicing or tax-calculation modules you switch on, not the per-transaction rate alone.

What does a chargeback cost on each?

Both charge a fixed dispute fee per case, on top of losing the transaction amount and the original processing fee. The amounts differ by country and are revised, so read the current figure for your market rather than a number from an article. The structural point is that the fee is charged when the dispute is opened, not when it is decided, and in most schedules it is not returned if you win — which makes prevention, through clear billing descriptors and prompt refunds, worth more than any fee difference between the two.