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How to Choose Between Paypal vs Stripe Merchant Accounts


Are you confused to choose between PayPal vs stripe vs merchant accounts?
If yes, then you should choose any one account by doing full research. 5 Star Processing will give you in-depth information about each account that will make it easier for you to select a particular account.
When it comes to choosing one from these three accounts, you must be thinking things like,
  • How Stripe merchant account Is Different From Both?
  • How PayPal Is Different From Both?
  • How is Merchant Account Different From Both?
Know all answers to these questions from this blog. Before choosing which account to use in stripe and merchant account vs. PayPal. A brief understanding of each of them is needed.

How Stripe merchant account Is Different From Both?

  • Stripe merchant account, just like PayPal is also an online payment system but what sets it apart from its users.
  • Stripe is majorly for e-commerce websites like Amazon, eBay, and Alibaba.

paypal vs stripe vs merchant accounts

How PayPal Is Different From Both?

The first on the list, Paypal is a worldwide online payment system whose sole purpose is to support money transfers around the globe. Founded by tech entrepreneur, Elon Musk, and five others in 1998, PayPal is supposed to be an alternative to traditional paper methods like checks.

How Merchant Account Different From Both?

And finally, a merchant account is a type of bank account that allows private businesses to collect payments in multiple ways. The basis of establishing a merchant account is an existing agreement between the acceptor and a merchant acquiring bank, usually about the settlement of card payment transactions.

The ISO (independent payment organization) or MSP (member service provider) is brought in as a third party on some occasions. Stripe and Paypal especially are the biggest rivals in the global market and have been compared lots of times. It’s very hard to specifically pick out the best between those two.

The best way to know which one to pick is to know their strengths and also, what you want to use them for. Merchant account, on the other hand, does fewer online transactions, and more card transfers, and doesn’t have a specific competition.

Points That Could Make Your Decision Easier To Choose Between  Paypal vs Stripe vs Merchant Accounts

Fee Per Transaction:

Both Paypal and Stripe charge 2.9% + 30 cents. Merchant fees vary depending on the service provider; they charge between 0.5% to 5% per transaction plus certain fixed charges.

Setup Cost:

  • Both Stripe and Paypal have 0 setup costs.
  • To set up your Stripe or Paypal account is completely free.
  • Merchant accounts, however, could cost up to 50 to 200 dollars just to set it up.


  • Both Stripe and Paypal aren’t into refunds; in other words, funds cannot be refunded by Stripe or Paypal.
  • Merchant account, on the other hand, supports payment refund depending on the payment method used; a refund is possible with credit or debit card transactions.
  • You can choose between a full or partial refund.

Contract: A contract is a very important aspect of creating a merchant account. As stated earlier, you will need to reach an agreement with your service provider, which sometimes requires a well-structured third party. A contract is not required on both Paypal or Stripe as it’s completely unnecessary.


Lower Pricing:

  • Both Stripe and Paypal support lower pricing once you reach a certain level of monthly sales.
  • Stripe merchant account fees can reach a low monthly fee of 80,000 dollars a month while Paypal can reach 3,000 dollars per month.
  • Both offer a non-profit discount of 2.2% + 30 cents.
  • However, Merchant accounts don’t support any of this as it’s the price is fixed no matter how many sales you make.
  • It sticks to the price stated in the agreement and doesn’t go below or above.
  • Based on what we have seen above, Paypal supports individuals, small businesses, freelancers, entrepreneurs, agencies, etc.
  • Stripe however it’s advisable to use Stripe if you run a huge company or e-commerce platform as payments will be handled on your website, unlike Paypal.
  • It is better to not use a merchant account if you run an e-commerce platform because it doesn’t support online transactions.

But if you run a small business and prefer the terms, go for it.

Paypal merchant account

Contact 5 Star Processing To Take Help

If you are confused between Paypal vs Stripe vs Merchant Accounts. 5 Star Processing experts are the best payment gateway providers who helped many business owners to choose. Call Us at +1 888-253-9692.


Q 1: Is Stripe a merchant account?

Stripe is a merchant account with its own unique merchant identification number (MID). In reality, it bundles all its many users into that one MID. Entry-level business owners and smaller merchants usually start with PayPal at startup to accept credit card payments with the assistance of online shopping carts.

Q 2: Can I use PayPal as a merchant account?

Yes, you can use a PayPal merchant account. While using PayPal, you are using their merchant account as part of the deal. You can use a PayPal merchant account that is perfect for shopping cards, online invoicing as well as online payments.

Q 3: Is Stripe more secure than PayPal?

Well, both payment methods whether it is a stripe or PayPal, are robust, stable, or secure platforms. Both will allow you to accept online payments with competent peace of mind.


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