Business

Stripe Payments vs Paypal - Comparison for UK Businesses

Paola Faben Oliveira

16.11.23 (updated more than 1 year ago)

Read time 9 minutes

Choosing between Stripe and PayPal can directly impact your bottom line, customer checkout experience, and how easily you can access your hard-earned money.

In this guide, we've compared Stripe and PayPal from a UK perspective, breaking down their fees, features, and international payment capabilities so you can make a fully informed decision.

We've also explained how Wise Business can help you manage international payments more efficiently alongside either platform using Wise Business.

Key takeaways

Topic	Notes
Core difference	Stripe is suited to customisable checkouts, subscription models, and businesses that want more control over the payment experience. PayPal is better suited to businesses looking for quick setup, broad brand recognition, and a familiar checkout option.¹
Fees	For standard UK transactions, Stripe charges 1.5% + 20p for standard UK cards, while PayPal charges 2.9% + 30p for standard commercial transactions in the UK.^{2, 3}
FX fees	For currency conversion, Stripe charges a 2% currency conversion fee, while PayPal charges a 3% currency conversion fee on top of the wholesale exchange rate.^{2, 3}
International card fees	Stripe charges 2.5% + 20p for cards from the EEA and 3.25% + 20p for other international cards. PayPal charges its domestic fee plus a fixed cross-border fee of 1.29% for EEA payments and 1.99% for payments from all other markets.^{2, 3}
Checkout experience	Stripe enables a more integrated checkout experience on your own site, while PayPal is well known for fast checkout but may redirect customers depending on the setup.⁴
Key features	Stripe stands out for developer tools, API flexibility, and subscription billing, while PayPal offers simple integrations, invoicing, and POS tools through PayPal Point of Sale (formerly Zettle).^{5, 6, 8}
Using Wise Business	You can connect a Wise Business account to Stripe or PayPal to receive international payouts in foreign currencies and manage conversion separately, which can help avoid automatic conversion by the payment platform.

Discover Wise Business 🔍

Stripe vs PayPal: At a glance

Comparison Point	Stripe	PayPal
Best For	Customisable checkouts, subscription businesses, and tech-savvy companies.	E-commerce beginners, quick setup, and leveraging a globally recognised brand.
UK Domestic Fees	1.5% + 20p for standard UK cards.²	2.9% + 30p for standard commercial transactions.³
International Fees	2.5% + 20p for EEA cards and 3.25% + 20p for other international cards, plus a 2% currency conversion fee if required.²	Domestic fee plus a cross-border fee of 1.29% for EEA payments and 1.99% for payments from all other markets, plus a 3% currency conversion fee.³
POS Hardware	Stripe Terminal offers card readers for integrated in-person payments.⁷	PayPal Point of Sale provides card readers, POS systems, and software (formerly Zettle).^{8, 26}
Integrations	An extensive, API-first approach for deep customisation with websites and apps.⁵	Wide range of simple plug-and-play integrations and payment buttons.⁶
Payout Speed	Standard payouts take 2-3 business days. Instant Payouts are available for a fee.⁹	Standard payouts take 1-3 business days. Instant transfers are available for a fee.¹⁰

What is Stripe? An overview for UK businesses

Stripe is a powerful payment processing platform designed for businesses of all sizes, from startups to global enterprises. It's particularly well known for its developer-friendly tools and highly customisable nature.

This allows businesses to build a more seamless and branded checkout experience directly on their website or app, rather than sending customers to an external page. In practice, this can reduce checkout friction, improve conversion rates, and give businesses full control over branding, localisation, and payment flows.

It offers a comprehensive suite of products that go beyond simple payment acceptance.

Key Stripe features

Stripe Checkout: A pre-built, optimised payment page that you can integrate with just a few lines of code.¹¹ This is often used as a fast way to launch while still benefiting from Stripe’s optimisation and localisation features.
Customisable UIs: Build your own payment experience using Stripe’s developer tools.¹² This is particularly valuable for businesses that want to optimise conversion funnels or run A/B tests on checkout design.
Stripe Invoicing: Create and send customisable invoices that customers can pay online.¹³ Useful for B2B businesses or service providers managing off-platform payments.
Stripe Billing: Manage recurring revenue and subscriptions with tools for tiered pricing, metered usage, and automated dunning.⁵ This is critical for SaaS businesses where failed payments directly impact revenue.
Stripe Terminal: Accept in-person payments with card readers that integrate with your existing Stripe setup.⁷ Enables unified reporting across online and offline sales.
Stripe Connect: A solution for platforms and marketplaces to accept money and pay out to third parties.¹⁴ Essential for multi-vendor platforms or gig economy models.
Radar: Fraud detection and prevention tools powered by machine learning.¹⁵ Helps reduce chargebacks while minimising false declines that could hurt revenue.

Is Stripe safe for your business?

Stripe is a PCI Service Provider Level 1, which is the most stringent level of certification available in the payments industry.¹⁶

Stripe also encrypts sensitive data and provides fraud prevention tools to help businesses process payments securely. In practice, this reduces the operational burden on businesses, as much of the compliance and security infrastructure is handled by Stripe rather than requiring in-house expertise.

What is PayPal? An overview for UK businesses

PayPal is one of the most recognised names in online payments globally. Its brand familiarity can build consumer trust, which may help businesses at checkout.

For many customers, especially in cross-border transactions, seeing PayPal can reduce hesitation and increase the likelihood of completing a purchase—particularly if they prefer not to share card details directly with a merchant.

PayPal offers a broad suite of merchant services, especially for e-commerce stores and small businesses looking for a quick way to start accepting payments.

You do not need to be a developer to get started, and adding a PayPal button to a website can be relatively quick.

Key PayPal features

PayPal Checkout: Add payment buttons to your site, including options such as Pay Later and Venmo in the US.⁶ This can increase average order value by offering flexible payment options.
Invoicing: Send invoices from your account or the PayPal app so customers can pay online.¹⁷ Particularly useful for freelancers and small service businesses.
PayPal Point of Sale (formerly Zettle): A point-of-sale solution with card readers and software for in-person payments.^{8, 26} It enables businesses to accept card and contactless payments, manage inventory, and track sales in one system.²⁶
Seller Protection: Protection for eligible transactions involving unauthorised transactions or item-not-received claims.¹⁸ Helps mitigate financial risk, especially for online sellers.
Working Capital: Eligible businesses can apply for funding based on their PayPal sales history.¹⁹ Provides access to cash flow without traditional lending processes.
QR Code Payments: A way for customers to pay in person using the PayPal app.²⁰ Reduces reliance on physical hardware in some scenarios.

Is PayPal safe for your business?

PayPal operates as a licensed and regulated payment provider in the UK and uses encryption and fraud monitoring to help protect transactions.

For business owners, PayPal's Seller Protection programme can add another layer of protection for eligible transactions.¹⁸ However, eligibility requirements and dispute processes mean businesses still need clear fulfilment and tracking practices to minimise risk.

Stripe vs PayPal fees in the UK: What you actually pay and why it matters

For any business, payment processing costs are a critical factor. Both Stripe and PayPal have complex fee structures, and the cheapest option will depend entirely on the types of transactions you process.

Beyond headline rates, businesses should consider how fees compound at scale, especially with international sales, refunds, and currency conversion.

Domestic transaction fees

Stripe: Charges 1.5% + 20p for standard UK cards. For premium UK cards, the fee is 1.9% + 20p.²
In practice, this lower base fee can significantly improve margins for high-volume businesses or those with lower average order values.
PayPal: The standard fee for commercial transactions in the UK is 2.9% + 30p.³
While higher, some businesses offset this through improved conversion rates due to PayPal’s brand recognition and stored customer details.

International transaction fees

Stripe: Charges 2.5% + 20p for cards from the European Economic Area (EEA) and 3.25% + 20p for all other international cards.²
These fees can quickly impact profitability for cross-border e-commerce, especially when combined with FX costs.
PayPal: Charges its standard domestic rate plus a fixed cross-border fee. This fee is 1.29% for payments from the EEA and 1.99% for payments from all other markets.³
The layered fee structure can make it harder to predict total costs, particularly for businesses scaling internationally.

Currency exchange rate markups

Stripe: Charges a 2% currency conversion fee.²
This applies when payments are automatically converted, which can reduce net revenue if not managed carefully.
PayPal: Charges a 3% currency conversion fee on top of the wholesale exchange rate.³
Over time, this higher markup can materially impact margins for businesses with significant international revenue.

💡You may be able to avoid automatic conversion by the payment platform with a Wise Business account. Get local account details for 8+ currencies like USD and EUR to receive international payments like a local.

Comparing Stripe vs PayPal features: Which is better for your business model?

Point of sale (POS) and in-person payments

Stripe Terminal: Offers card readers that integrate with your online payment system.⁷
Best suited for businesses that want unified reporting and a single payments infrastructure across channels.
PayPal Point of Sale (formerly Zettle): Offers card readers, POS systems, and software.^{8, 26}
The system allows businesses to accept payments, manage inventory, and track sales in one place, with options like Tap to Pay and mobile-based checkout.²⁶ It is typically easier to deploy quickly, especially for small retailers or businesses without technical resources.

Online checkout experience and conversion impact

Stripe: Offers a more customisable checkout experience.¹¹
This allows businesses to reduce redirects, maintain brand consistency, and optimise checkout flows—often leading to higher conversion rates.
PayPal: Known for familiar checkout flow.⁴
The recognisable interface can reduce trust barriers, particularly for new or lesser-known brands, even if redirects introduce slight friction.

Subscriptions and recurring billing

Stripe Billing: Advanced subscription tools.⁵
Supports complex pricing models and automated retry logic, which can directly reduce churn and recover failed payments.
PayPal: Simpler recurring tools.⁶
Suitable for straightforward subscription models but may lack flexibility for more complex billing scenarios.

Integrations and developer flexibility

Stripe: API-first approach.⁵
Ideal for businesses that want deep control, custom workflows, or integration into proprietary systems.
PayPal: Plug-and-play integrations.⁶
Enables faster setup with platforms like Shopify or WooCommerce, reducing time to launch.

Manage international payouts more flexibly with Wise Business

Wise Business can help UK businesses receive, hold, and convert international earnings in multiple currencies with transparent fees.

With Wise Business, you can:

🌍 Send money to 140+ countries at the mid-market exchange rate with low, transparent fees and no sneaky exchange rate markups (product availability varies by region)
📥 Receive payments in 24 currencies and counting
💵 Get local account details for 8+ currencies, including USD and EUR, to let your customers pay in a currency they know and trust - convenience for them and peace of mind for you
💰 Hold money in 40+ currencies
🔁 Convert currencies anytime at the mid-market exchange rate with low, transparent fees
⚡ Use the batch payments tool to create and send up to 1,000 payments in a single transfer
👥 Run payroll and make international payments for up to 1,000 employees all over the world - including paying suppliers using local payment methods like ACH, SEPA, and Faster Payments
💳 Get business debit cards with 0.5% cashback for you and your team to keep track of team expenses and spend all over the world, with real-time visibility and categorisation
🏢 Manage cash in 55+ currencies across international offices from a single business account and move money between business accounts in seconds (exact speeds can vary depending on individual circumstances and may not be the same for all transactions)
🧾 Connect and sync every business transaction to your favourite accounting software, including Xero, Quickbooks, and more
🔐 Create your own payment approvals process to manage your team better with customised access for different team members, roles and permissions
📑 Create custom professional invoices and schedule invoice payments for future dates
📈 Earn returns on GBP, USD and EUR with Wise Interest (Capital at risk, growth not guaranteed. Your money is at risk if governments default or interest rates go negative. Visit https://wise.com/gb/interest/ to find out more)
🔗 Create payment links and QR codes to get paid easily
⚙️ Automate payouts with the Wise API (comes with 24/7 customer support, a sandbox account to test integrations, API tokens, and clear documents on how to implement and make the most of our API)

Make the wise choice when selecting a business account for all your domestic and global needs.

Be Smart, Get Wise.

Frequently Asked Questions

Is Stripe cheaper than PayPal in the UK?

It depends on the transaction.^{2, 3} In general, Stripe tends to offer lower domestic card fees, but the total cost depends on factors like international sales, currency conversion, and whether PayPal’s checkout improves your conversion rate.

Is Stripe safer than PayPal?

Both use strong security.^{16, 18} In practice, both platforms meet high compliance standards, but risk management also depends on how you configure fraud rules, handle disputes, and manage customer verification.

Can I use Stripe and PayPal together?

Yes.²¹ Many businesses offer both options at checkout to balance conversion (via PayPal) and cost efficiency/control (via Stripe).

Which is better for small business?

Depends on needs.¹ PayPal is often easier to start with, while Stripe may offer better long-term scalability and cost efficiency as your business grows.

Which is better for nonprofits?

Both are viable.²³ The best choice depends on donation flow, international reach, and whether recurring giving is a core part of your model.

How do they compare to others?

Depends on the scale of your business.²⁴ Larger businesses may also consider providers like Adyen for global payment orchestration.

How do disputes work?

Both platforms charge dispute fees^{2, 3} and require evidence submission, so having clear fulfilment, tracking, and customer communication processes is key to minimising losses.

Sources:

Sources last checked on 31 March 2026

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This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.