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23 Comments

Stripe vs. PayPal 🥊 (Stats from bootstrapped SaaS)

Does it make sense to implement PayPal in your SaaS when you use Stripe (or a similar solution) already?

Shuffle generated $30,000 in revenue last month, and here are stats from ~550 payments made in April!

TL;DR For us, using PayPal makes sense. It's our secondary payment method but still accounts for 41% of payments.

Note: We sell our software to SMBs.

👉 Payment method:

  • Stripe: 58.41%
  • PayPal: 41.59%

👉 Real fees (% + fixed fee included)

  • Stripe: 3.15%
  • PayPal: 6.18%

Also, we are a Polish company, so to withdraw money, we need to convert USD to PLN, and this is another "fee" (not included above).

👉 Payments by country and PayPal share:

  1. United States -- payments: 166 (PayPal: 37.35%)
  2. United Kingdom -- payments: 53 (PayPal: 37.74%)
  3. Germany -- payments: 42 (PayPal: 61.90%)
  4. France -- payments: 25 (PayPal: 52.00%)
  5. Canada -- payments: 25 (PayPal: 40.00%)
  6. Australia -- payments: 17 (PayPal: 35.29%)
  7. Netherlands -- payments: 16 (PayPal: 75.00%)
  8. India -- payments: 15 (PayPal: 20.00%)
  9. Japan -- payments: 10 (PayPal: 40.00%)
  10. Italy -- payments: 9 (PayPal: 66.67%)

What are your stats? Is it worth maintaining two payment methods?

  1. 5

    Questions:

    • I wonder if you didn't have paypal would people just use stripe anyway?

    • Even if you lost some revenue by losing PayPal, would it be more cost efficient in the long run when taking into account the cost of maintaining two systems?

    • Stripe isn't just a payment processor, it manages your subscriptions also. How do you manage a sub when someone uses paypal?

    1. 1

      Hey Mike,

      PayPal also handles subscriptions.

      If we remove PayPal, some people will buy, some would not. I don't have specific numbers right now, sorry!

      However!

      When I see that, for example, in Germany, 60% of our payments are made with PayPal (a secondary payment method), I don't think about removing it!

      I think about a test that makes PayPal a default payment option. 😎

      1. 1

        Aren't you afraid of being all of a sudden locked out of PayPal? The whole internet is full of such horrors. I mean it will not kill your business probably, since part of your revenue comes from Stripe, but still can be a huge hit

        1. 3

          If you play by the rules, PayPal is not likely to do this. A LOT of those horror stories have some info missing (PP really got better since Stripe became big). Also, if your business is starting to get traction, just pick a phone, call PayPal and ask if your account is in good standing and that you plan to move business through them, and you want to be sure everything is ok. They will not only let you know all the possible checks you might encounter (and actually let you perform them right away) but also there will be history on your account, that you are pro-active, which is huge for them.
          Also, be nice - don't start conversations with companies that let you push payments from screening and being annoyed. Those are the tips I picked from a guy at PayPal once when I was calling them and letting them know that I was moving to a different country for few months. The guy also told me rarely anyone ever calls in situations like that, even if this is what gets your account pretty bulletproof.
          A not from myself and based on other people's experience - NEVER keep a lot of money on your balance, and withdraw money regularly (weekly or bi-weekly at least).
          Just a heads up :)
          I keep using PayPal since if you remove, you WILL lose some business - this was proven many times. That's the reason the majority of the web is still using it!

          1. 1

            thanks for a detailed answer. that’s insanely useful.

            And that’s what I wanted to hear tbh, because a lot of horror stories doesn’t actually mean it is so bad(vendor for example), but often people make same mistakes. But again. - nobody says that vendor was always right too, thus the suggestion not to keep a lot of money lying there.

            Cheers

        2. 1

          Hey Kostja,

          I heard about similar cases, but personally, I never had any problem with PayPal.

          As you said, this would not kill my business anyway.

  2. 3

    All those countries accept Stripe right? What if you removed the paypal option, would payments go down?

    1. 0

      Hey Albert,

      PayPal is a different payment method than Stripe.

      For many people, it is more convenient.

      Our customers are mostly SMBs (including very tiny businesses, a.k.a. freelancers). That's why this setup works for us.

      If you target mid businesses and enterprises, that convenience (in using PayPal) matters less because, in that scenario, most customers will purchase with company cards. 🤵🏻‍♂️

  3. 2

    We are using both Stripe and PayPal on both of our SaaS projects: gglot.com and doctranslator.com and our stats seem to correlate with what you have been mentioning. So, great job!

    On the other hand, the ongoing trouble selling globally (local taxes, VAT numbers, compliance) forces us to look at somewhat unified billing systems such as Paddle or FastSpring. Has someone integrated them already? What's your advice?

    1. 1

      Hey Alex,

      For invoices, we use our local solution integrated via API ( https://infakt.pl ). It comes with a real person as an accountant, so it's very convenient for us when we have some questions, etc.

      I know that a lot of people use Paddle for this. Maybe that is a good choice :)

  4. 2

    Thanks for sharing, very interesting! I'm based in Germany and most of my members are based here as well, so I also use both Stripe and PayPal.

    A lot of people don't have debit/credit cards that work with Stripe here, as I'm sure you've experienced. EC cards don't work with Stripe.

    However, I'm planning on removing PayPal. I'm setting up SEPA direct debit payments on Stripe, so my members will be able to pay with both IBAN and credit/debit card using Stripe. People in Germany are very used to paying online with IBAN.

    It's a bit of a risk, but I really dislike PayPal. I'm going to try it out anyway and only use the Stripe payment options. If a lot of people ask me about PayPal I might turn it back on.

    1. 2

      Interesting insight :) I didn't know why PayPal is so popular in Germany.

      1. 2

        yea EC cards and SOFORT payments are big here. As a side note, I checked my records and my breakdown is:

        75% Stripe (cc/dc cards)
        25% PayPal

  5. 2

    Thanks for sharing, very interesting details.

    I personally implement Stripe on my website because I find their API much more powerfull and easy to use.

    Also building a new website were I need to charge a customer and delivery payouts to another member, so the Stripe Express connected accounts makes that much easier, I don't need to worry about any details all is handled by Stripe, include compliance.

  6. 2

    Thank you for the insight. Based by your stats, would it make sense to implement first Stripe and later on PayPal? How much is the overall effort to implement these features? I thought PayPal would be easier. I am currently developing an app.

    1. 3

      Hey Michael,

      I would argue that implementing Stripe is easier :)

      Also, it depends on who your target audience is. This setup works for us because we sell to small businesses. When you're going upmarket, the convenience of using PayPal matters less because business customers often pay with their company cards.

      1. 2

        Makes sense! Thank you for your reply!

  7. 2

    I've just integrated stripe on my website. It's infinitesimally easier than Paypal!

    1. 2

      That's true :) Stripe is a lot easier to implement than PayPal.

  8. 1

    This article is so freaking useful for those who are trying to decide between Stripe and PayPal! People are kind of bored with Stripe and PayPal, but since they are the most popular online payment solutions, people's decision to pick a payment provider always comes down to these two. As for me, I prefer PayPal, and that's because it's super easy to set up accounts, easy for my customers to use it, most customers trust PayPal, no contract is required, and the invoicing is free. By the way, if you want to find more about VCC for PayPal, get in touch with those from https://paypalvbavcc.com. They were super friendly and helped me a lot!

  9. 1

    Have you considered a different payments option? Both Paypal and Stripe are limited on their flexibility. We used to process through Fiserv and had a cost of 2.74 %, recently moved on to a new startup called Throttle that hooked us up on a flat rate of 2.6%. Could be a better solution to keep more of your revenue.

    This are them, I believe they are just launching: https://throttlepay.com

    Good luck!

    1. 1

      Hey Jose,

      We are too small to optimize for fees :) We're working on increasing our sales by 3x this year, and optimize 1-2% in fees isn't our priority right now. PayPal is used worldwide, and we prefer well know solutions.

  10. 0

    Thank you very much for the exciting statistics. It would be good to know how many sales are made with mobile devices. Do you also offer Google and Apple Pay?

    You could integrate the multi-payment provider Payrexx (https://www.payrexx.com), so you would have all means of payment and also Paypal with one integration!

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