PayPal vs Stripe fees: which actually costs less?

Almost every PayPal vs Stripe comparison lands on the same verdict: Stripe is cheaper, by about $6 on a $1,000 payment. The arithmetic behind it is Stripe's 2.9% + $0.30 against PayPal's 3.49% + $0.49.

For some payments that's exactly right. For others it's backwards. PayPal doesn't have one rate: it charges a flat 2.99% on a direct Goods & Services payment, and on an invoice it charges whatever the client's payment method dictates — 3.49% + $0.49 with their PayPal account, 2.99% + $0.49 by card, or 1% capped at $10 by bank. Stripe has a layer of its own, too: bill through Stripe Invoicing and it adds from 0.4% per paid invoice on top of the card or bank fee.

So the honest answer to "which is cheaper?" is "it depends on your client's wallet", which is less satisfying than a verdict but has the advantage of being true.

The short version: Stripe is cheaper for website checkout — 2.9% + $0.30 against PayPal's 3.49% + $0.49, about $6 less per $1,000. PayPal is cheaper on card-paid invoices over about $62 and on direct payments under about $333, while clients paying from a PayPal balance make Stripe the cheaper one. On large bank-paid invoices, PayPal's $10 cap usually wins.

Here's every route side by side, taken from PayPal's and Stripe's own published pricing, with the arithmetic done at the invoice sizes freelancers actually send.

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The rates, side by side

Both companies publish their US rates openly. The complication is that the price depends on the route the money takes, not just on which company you picked.

• Stripe card payment (payment link or checkout) — 2.9% + $0.30.
• Stripe Invoicing — the card or bank fee, plus from 0.4% per paid invoice.
• Stripe bank debit (ACH) — 0.8%, capped at $5.
• PayPal direct Goods & Services payment — 2.99%, no fixed fee.
• PayPal invoice paid by card — 2.99% + $0.49.
• PayPal invoice paid with a PayPal account — 3.49% + $0.49.
• PayPal invoice paid by bank — 1%, capped at $10.
• PayPal Checkout on your website — 3.49% + $0.49.

If you send invoices, compare invoices with invoices

The comparison most articles run puts a PayPal invoice against bare Stripe card processing. But if you're invoicing through Stripe, you're paying for Stripe Invoicing as well, so the fair comparison is invoice against invoice:

On a card-paid invoice PayPal is the cheaper of the two on anything over about $62, and the gap grows with the invoice: $15.31 on $5,000, $37.01 on $12,000. It flips the moment the client pays from their PayPal balance instead, because that route jumps to 3.49%. The part you don't control — how the client decides to pay — is the part that decides who's cheaper.

Bank payment is the cheapest route on both, but even there the lead changes hands. Stripe Invoicing's bank option edges out PayPal's between roughly $834 and $1,251; outside that band PayPal's $10 cap wins, and by a lot on big invoices — $10 against $25 on $5,000.

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If clients pay you directly

Not every freelancer invoices. If a client sends a direct Goods & Services payment through PayPal, you pay a flat 2.99% with no fixed fee, against 2.9% + $0.30 for a Stripe payment link. That makes PayPal cheaper on anything under about $333, and Stripe cheaper above it:

On any single payment that's pocket change. It only adds up with volume, or with payment sizes large enough that the sections below matter more.

If you sell through a website checkout

This is the case the standard comparison gets right. PayPal Checkout is 3.49% + $0.49 against Stripe's 2.9% + $0.30 — $6.09 on a $1,000 sale, or about $609 across $100,000 of sales. For a store doing real volume that's worth caring about, although plenty of shops offer both, because some customers simply won't buy without a PayPal button.

International work, where it gets murkier

Both add 1.50% for cross-border transactions, so the gap between them stays roughly where it was. The part that actually varies is currency conversion, and the two charge for it in very different ways.

Stripe charges a further 1% when it converts into your settlement currency. PayPal publishes its spread too — 3% or 4%, depending on the type of transaction — but builds it into the exchange rate it applies instead of listing it as a fee, and doesn't say which base rate it starts from. On paper that's several times Stripe's 1%. In practice you only see it by comparing the rate you got with the rate elsewhere that day.

That makes headline-rate comparison useless for international work. The only reliable method is to run one real payment through each and compare what lands. For a freelancer with mostly overseas clients, conversion is routinely the largest single cost in the transaction — larger than the processing fee both companies advertise.

Large invoices change the answer entirely

On a $12,000 project, a card payment costs $348.30 through a Stripe payment link and $359.29 through a card-paid PayPal invoice. At that size the processor matters far less than whether the client pays by card at all.

Bank payment caps the cost on both sides. Stripe's ACH debit is 0.8%, capped at $5 — $5 on that invoice, or $53 if you send it through Stripe Invoicing, whose fee is a percentage with no published cap. PayPal's invoice bank option is 1%, capped at $10, so $10 flat. The useful question for anyone billing in the thousands is "can this client pay by bank?" rather than "which processor is 0.1% cheaper?"

The trade-off is speed and friction: bank debits take longer to clear than cards and need the client to set them up once. For a recurring retainer that's a one-off annoyance worth several hundred dollars a year. For a single small invoice it isn't worth asking.

The differences that aren't percentages

Once you accept the rates are close, the decision stops being about fees at all.

• Chargebacks. PayPal $20, Stripe $15, both on top of losing the payment. One dispute wipes out several months of the rate difference.
• Client familiarity. PayPal is a brand people already have an account with. Stripe is invisible infrastructure — the customer sees your checkout, not Stripe. For invoicing strangers, that recognition has real value.
• Setup. PayPal works with an email address. Stripe expects a bit more configuration and rewards it with better tooling.
• Holds and reserves. Both freeze funds under some conditions, and both are widely complained about for it. Neither publishes thresholds, so treat guaranteed access to a payout as something neither fully offers.
• Where the money sits. PayPal pays into a PayPal balance you then move to your bank; Stripe pays out to your bank on a rolling schedule. Neither is better, but they suit different habits — one puts a deliberate step between earning and spending, the other doesn't.

There's also no rule saying you must choose. Plenty of freelancers offer both, let clients pay however they prefer, and route larger invoices toward whichever is cheaper for that type. The cost is slightly messier reconciliation, since payouts land from two places on different schedules.

So which should you use?

If you invoice clients, don't choose on headline rates — choose on how your clients pay. Card-paying clients are slightly cheaper on PayPal, clients who pay from a PayPal balance are cheaper on Stripe, and anyone willing to pay by bank should be encouraged to, whichever you use. If clients pay you directly, PayPal wins on small amounts and Stripe on larger ones, by pennies either way. And if you sell through a website checkout, Stripe's advantage is real: about $6 per $1,000.

And if you mostly work internationally, ignore both headline rates and test an actual payment through each, because currency conversion will dwarf whatever the percentages are doing.

Our PayPal fee calculator and Stripe fee calculator both run the numbers for direct payments, and the tables above cover the invoice routes. For the full breakdown of either, see PayPal business account fees and how much Stripe actually takes.

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