Choosing The Right Payment Method For E-commerce

If you run e-commerce or dropshipping, choosing the right payment plan might be very confusing. Using a good payment processor does not only increase your sales but as well increase your business’s reputation.

PayPal and stripe are the two payment processor widely used by e-commerce websites today to receive payments. The most commonly asked question from Ecommerce newbies is;  Between PayPal and stripe which should I go for as an e-commerce starter? In this post, we will analyse the pro and cons of both payment processors.


Stripe has been around since 2010, it has helped millions of businesses to receive payments from their potential customers all over the world. Below are the advantages of stripe over PayPal.

Deposit/Withdrawal charges 

If you have used both platforms very well, you will know PayPal charges an average of 4.5% on every payment you receive. While stripe charges 2.9% plus 30cent on every successful purchase. Aside from the charges on deposit, PayPal charge a 5$ fixed charge on Withdrawals with a minimum balance of 10$. This means if you have less than 10$, your money will be stuck on PayPal unless you have a USA bank account to withdraw. 

On stripe, you can set up an automatic payout. I have seen  stripe pay cents as low as 0.05$ before. So if you are the type who does not have a US bank account and will love to withdraw with lesser charges then, the stripe is your best bet. 


Stripe makes taxation very easy. It uses powerful software that automatically tracks your tax statistics on every purchase. Having good tax records helps you to have proper records if you want to file a tax return with the IRS. Paypal on the other hand does not possess this taxing feature


Paypal is the biggest payment giant in the US it supports payment across over 200 countries. It has been widely used by many businesses around the globe today to send and receive payments. 

Below are the advantages of PayPal over stripe

Global recognition 

Paypal supports over 200 countries around the globe. And over 90% of internet users use PayPal to accept and send payments. This has made PayPal very more popular than stripe in the e-commerce space.

Flexibility in setting up a PayPal 

Setting up a PayPal account is as easy as setting up your Gmail account. No additional requirements, no credit card or backing documents. You are only asked to provide backing documents once you have sent out payment up to 3000$. On stripe, you need to add your identity, SSN and necessary backing documents to have an account that can receive payments and payouts. 

Makes payment easier 

With PayPal, it is very easy to send payment to anyone in the world without needing to type your card details each time you want to complete payment. 

On stripe, you are sent to a checkout page where you can input your card details to authorize 3D code each time you want to make payment to other users.

From the following pro and cons, it’s depictable that stripe is the best if you intend to start an eCommerce website. But in my opinion, I will advise you to set up the two; 

Over 90% of internet users trust adding their cards to PayPal then using their PayPal to checkout instead of getting to a checkout page on your website that asks them to input their credit or debit card details. 

Asim Boss

Muhammad Asim is a Professional Blogger, Writer, SEO Expert. With over 5 years of experience, he handles clients globally & also educates others with different digital marketing tactics.

Asim Boss has 3449 posts and counting. See all posts by Asim Boss

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