Paypal vs Stripe: Which is the Superior Payment Platform?

Paypal vs Stripe - how do the two options compare across the key criteria?

17:47 12 January 2022

If you’ve ever wagered online, the chances are that you’ve spent your money at a fully licensed and regulated PayPal casino.

 

Such casinos certainly offer players access to a raft of security features alongside trusted and instantaneous transactions, with the associated deposit and withdrawal times among the quickest in the world.

 

However, the online payment space continues to evolve at a rapid pace, with Stripe also offering a viable option in the current marketplace. But how do the two options compare across the key criteria?

 

#1. International Transactions

Some licensed casinos in the UK allow players to wager across international borders, while the same rule applies to operators based in various European nations.

 

In this respect, it's arguable that Stripe offers the superior option to players, particularly when it comes to the associated transaction charges and the cost of completing financial transactions.

 

For example, PayPal charges a noticeably higher transaction fee of 4.4% for international payments, in instances where funds originate from outside the US.

 

Conversely, Stripe only charges an additional 1% on top of its standard flat transaction fee when processing international payments, charging users 3.9% + $0.30 of the total value.

 

In practical terms, a $100 international card payment will see you lose $4.40 through PayPal, but just $4.25 when using Stripe. This may seem like a nominal amount, the difference will accumulate quickly if you make complete regular deposits or transactions online.

 

Stripe is certainly the most economical choice in this respect, so it’s one to keep in mind if you regularly wager across international borders.

 

#2. Micropayments

While Stripe holds the edge in the case of international transactions (unless you wager using a trusted crypto token, of course), PayPal is arguably the preferable option when it comes to micropayments.

 

The term micropayments is commonly used to describe low-value transactions under $10, which describes a large portion of casino deposits in markets such as Ireland, the US and the UK.

 

In the UK, for example, the average gambler spends only £2.57 a week on iGaming verticals, with this totalling £133 annually. Most minimum deposit thresholds in regions such as the US and simi;ar markets are also as low as $5 or $10, so micropayments play a pivotal role in driving the typical gambling experience online.

 

Interestingly, Stripe applies the same flat fee for micropayments (2.9% + $0.30), whereas PayPal has created a custom value for such transactions of 5% + $0.05).

 

Now, these rates may appear deceiving, as at first glance, it’s Stripe that seems to offer the best Micropayment transaction fee. However, you’ll need to factor in PayPal’s $0.05 value to calculate the most economical site, particularly when completing genuinely low value transactions.

 

For example, let’s say that you want to make a $5 online casino deposit. With Stripe, you’ll pay a transaction fee of $0.45, whereas this value declines to just $0.30 with PayPal.

 

The difference is even more stark on lower value deposits at one-dollar casinos. With a $1 deposit, you’ll pay just $0.10 to PayPal, but a relatively hefty $0.33 with Stripe.

 

As you can see, you’ll pay less per low-value transaction or deposit with PayPal, particularly when dealing with the type of values synonymous with online casinos.

 

#3. Trust and Brand Recognition

We’ll close with brand recognition, which is important when driving recall and creating a sense of trust among online gamblers.

 

It also stands to reason that more trusted and recognisable payment brands will be available at a wider range of casinos, and there’s absolutely no doubt that PayPal has a distinct edge in this respect.

 

Certainly, there’s a larger number of casinos that accept PayPal than Stripe in the US and across the globe, while most players will be familiar with the platform and have an account of some description or another.

 

This rule applies among both individual customers and merchants, with PayPal claiming an estimated 55.6% market share with regards to the latter (the corresponding share for Stripe is 17.6%).

 

While the market share for personal users is a little lower and less dominant, PayPal remains the most popular choice among casual customers and those who are most likely to use the platform to fund their iGaming accounts.

 

Make no mistake; PayPal’s high profile and familiarity creates a cycle of growth and acceptance, as more casino sites integrate the payment option into their platforms and players grow increasingly accustomed to the interface, navigability and security options. 

 

Stripe remains a fast-growing and highly popular option, of course, especially as its payments can be processed directly through iGaming sites (this isn’t the case with PayPal). 

 

However, it has some ground to make up before it can match the popularity and accessibility of PayPal, and this trend shows little sign of abating anytime soon.