eCommerce

Stripe or PayPal for your website or app: fees, payouts, disputes

10 min readBy Jaskirat Singh Talwar

A hand holding a payment card over a counter with a card reader, a phone and a paper shopping bag

Choose Stripe when you are building your own checkout, subscriptions or a marketplace and want card payments at its standard rate; add PayPal when a meaningful share of your buyers would rather pay with their PayPal (or, in the US, Venmo) account than type in a card. As of October 2026 a US domestic card costs 2.9% + 30¢ on Stripe, while a payment through the PayPal button costs 3.49% + 49¢, so PayPal is usually the dearer way to take the same sale but can win sales Stripe would not. Many of the payment systems we build offer both, and the choice changes outside the US: in India, Stripe takes new accounts by invite only and PayPal accepts only international payments.

Key takeaways

  • US fees (as of October 2026): Stripe 2.9% + 30¢ per domestic card; PayPal Checkout 3.49% + 49¢, and PayPal's own card processing from 2.89% + 29¢. Both add fees for international cards and currency conversion.
  • Disputes: Stripe charges $15 when a dispute arrives and another $15 if you contest it (refunded if you win); PayPal charges a $15 dispute fee ($30 for high-volume sellers).
  • Refunds: neither returns the original processing fee when you refund a customer.
  • Payouts: Stripe's first payout typically takes 7 to 14 days; PayPal credits your PayPal balance but may hold payments to new sellers for up to 21 days.
  • Canada and India differ: Canadian rates are in CAD with smaller international surcharges; in India, check eligibility before you plan anything.

We build Stripe and PayPal integrations for clients, often both in the same checkout. Our Stripe development services and PayPal integration services pages describe that work.

How do Stripe and PayPal fees compare in the US?

On a plain domestic card payment the two are close, but the PayPal button costs more. All figures below are standard published rates as of October 2026; both companies offer custom pricing to larger businesses.

US fee (as of October 2026) Stripe PayPal
Domestic card 2.9% + 30¢ 2.99% + 49¢ (standard card payments); 2.89% + 29¢ (advanced card payments)
Buyer pays with a PayPal or Venmo account Not applicable 3.49% + 49¢
Buy now, pay later 5.99% + 30¢ (Klarna) 4.99% + 49¢ (PayPal Pay Later)
International card or buyer + 1.5% + 1.50%
Currency conversion + 1% 3.00% to 4.00% above the base rate, depending on the transaction
Manually entered card + 0.5% Not stated separately
Bank debit ACH Direct Debit 0.8%, capped at $5 Not compared here

Sources: Stripe pricing (US page) and PayPal merchant fees, US (last updated 1 October 2026).

On a $100 domestic card sale, that is $3.20 on Stripe and $3.98 if the buyer chooses the PayPal button. The gap is the price of the PayPal option, so the real question is whether offering it brings in sales you would otherwise lose. That depends on your customers, and only your own checkout data can answer it.

What changes in Canada?

The structure is the same, in Canadian dollars, with smaller international surcharges on the Stripe side.

Canada fee (as of October 2026) Stripe PayPal
Domestic card 2.9% + C$0.30 2.70% + C$0.30 (advanced card payments)
Buyer pays with a PayPal account Not applicable 2.90% + C$0.30
International card or buyer + 0.8% Extra percentage that varies by the buyer's country (1.00% for most countries)
Currency conversion + 2% 4.00% (PayPal's Canadian dollar rate)
Pre-authorised debit 1% + C$0.40, capped at C$5 Not compared here
Dispute C$15 received, C$15 if you contest (refunded on a win) C$20 standard dispute fee
Instant payout 1%, minimum C$0.60 1.50%, minimum C$0.50

Sources: Stripe pricing, Canada and PayPal merchant fees, Canada (last updated 13 October 2026).

In Canada the PayPal account rate (2.90% + C$0.30) is much closer to Stripe's card rate than it is in the US, which makes offering both an easier decision.

What about businesses in India?

Check eligibility before comparing fees.

  • Stripe: since May 2024, businesses in India cannot sign up on Stripe's website and must request an invite. Stripe also says that from 1 January 2026 new Indian accounts need a live video KYC call under the Reserve Bank of India's revised payment aggregator rules. For invited accounts, Stripe India's published rates as of October 2026 are 2% for Visa and Mastercard cards issued in India, 3% for cards issued outside India, 3.5% for American Express and 4.3% for international cards charged in USD or another currency, plus 2% if conversion is needed. A dispute costs ₹1,000, and contesting it another ₹1,000.
  • PayPal: PayPal's India fee page says "For India users, we only support international payments". Receiving a payment from outside India costs 4.40% plus a fixed fee by currency (for example 0.30 USD), with a dispute fee of 8 USD or ₹580 for standard sellers. That page was last updated on 28 March 2024, so confirm rates in your account.

For an Indian business selling at home, neither is the obvious default; domestic gateways are usually the starting point. For an Indian business selling abroad, both can work, subject to these terms.

How fast do you get paid?

Stripe pays to your bank account on a schedule; PayPal credits your PayPal balance and you withdraw from there.

  • Stripe: the first payout typically takes 7 to 14 days after your first live payment, depending on industry, country and risk. After that, funds settle in 2 business days in the US and 3 business days by default in Canada, and in India payouts are automatic and daily (2 business days for domestic charges, 5 for international). Instant Payouts to an eligible debit card or bank account cost 1.5% (minimum 50¢) in the US.
  • PayPal: a standard withdrawal to your bank has no fee when no currency conversion is involved; an instant transfer costs 1.50% (minimum $0.50 in the US). PayPal's help pages say new sellers can see payments held for up to 21 days; adding tracking, or marking a digital or service order as completed, can release a hold sooner.

If cash flow in the first month matters, plan for these initial delays on either side.

What happens with disputes and refunds?

Both charge for disputes and neither returns your original fee on a refund.

  • Disputes (US, as of October 2026): Stripe charges a $15 dispute received fee and a $15 dispute countered fee if you respond manually, which you get back if you win. PayPal charges a dispute fee of $15 for standard sellers or $30 for high-volume sellers when a buyer files a dispute or chargeback.
  • Refunds: Stripe's help centre says the processing and currency conversion fees on the original charge are not returned. PayPal's fee page says "the fees you originally paid to receive the payment are not returned to you".

PayPal also runs its own buyer and seller protection programmes alongside card-network chargebacks, so a PayPal sale can be disputed inside PayPal as well as through a card issuer. For physical goods, shipping with tracking is the single most useful habit on either platform.

Which is easier to build with?

Stripe is built around its developer API; PayPal is strongest when you add its buttons to an existing checkout.

Stripe's real strengths: one API and dashboard for cards, wallets, bank debits and buy now, pay later; hosted Checkout if you do not want to build the payment form; Stripe Billing for subscriptions; and Connect for platforms that pay out to sellers. Its payment flows support Strong Customer Authentication, which card payments in Europe require.

PayPal's real strengths: buyers can pay with a stored PayPal balance, bank or card without typing card details; Venmo for US buyers; PayPal Pay Later; and a brand many shoppers already have an account with. Its JavaScript SDK adds these buttons to a web checkout.

For iOS and Android apps there is one more rule. Apple's App Store guidelines require purchase methods other than in-app purchase for physical goods and services used outside the app, so Stripe or PayPal is the right tool there; digital content unlocked inside the app generally has to go through Apple's own in-app purchase.

What have we learned building both?

Most of our payment work offers both, with Stripe as the card processor and PayPal as the extra option:

  • For Scuela's e-learning marketplace we built PayPal and Stripe payments with refunds and Strong Customer Authentication, monthly and yearly memberships on Stripe subscriptions with status-check jobs, and an Enterprise plan where academy owners connect their own Stripe credentials and manage their own billing.
  • For Beliri, a designer goods marketplace, we built native Stripe and PayPal checkout in the iOS app, with payment confirmation and order recording in the Node.js API.
  • For Top Tier Editing, an editing service, checkout takes Stripe and PayPal after an instant quote, with promo codes and PDF order receipts.
  • For a crowdfunding platform on WordPress, we built Stripe, Bitcoin and subscription payment options into campaign checkout.

The lesson across them: the second gateway is not a copy of the first. Each needs its own webhook handling, refund path, dispute workflow and reconciliation, so budget for both properly or start with one.

Which should you choose?

  • Stripe first if you are building a custom checkout, need subscriptions or a marketplace, or want the lower US card rate.
  • PayPal first if you sell to consumers who expect a PayPal or Venmo button, or you want to accept payments quickly on an existing store with minimal development.
  • Both if you sell to consumers internationally and can support two integrations: Stripe for cards, PayPal for buyers who prefer it.
  • In India, confirm Stripe eligibility and PayPal's international-only terms before choosing either.

FAQ

Is Stripe cheaper than PayPal?

For a US domestic card payment, Stripe's 2.9% + 30¢ is lower than PayPal Checkout's 3.49% + 49¢ as of October 2026. PayPal's own card processing (2.89% + 29¢ for advanced card payments) is close to Stripe's. International, conversion, dispute and payout fees also matter, so compare on your own sales mix.

Can I use Stripe and PayPal on the same website?

Yes. Most ecommerce platforms and custom checkouts can offer both, and many of the systems we build do. Plan for two sets of webhooks, refunds, dispute handling and reconciliation in your accounting.

Does PayPal or Stripe hold new sellers' money?

Both can delay early funds. Stripe typically schedules a new account's first payout within 7 to 14 days; PayPal says new sellers' payments may be held for up to 21 days, and tracking or order completion can release them sooner.

Do I get fees back when I refund a customer?

No, on either platform. Stripe does not return the original processing or conversion fees on refunds, and PayPal says the fees you paid to receive the payment are not returned.

Can a business in India use Stripe or PayPal?

Stripe India is invite-only for new accounts and requires video KYC for new users from January 2026. PayPal supports only international payments for Indian accounts. Both are workable for exports; for domestic sales, compare Indian gateways too.

Do these prices apply to every business?

No. They are the standard published rates as of October 2026. Both vendors offer custom or interchange-plus pricing to larger businesses, and rates change, so check the pricing pages before you decide.

Impinge Solutions builds Stripe and PayPal checkouts, subscriptions and marketplace payments for websites and apps. See our Stripe development services.

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