Stripe vs PayPal vs Braintree: How do these payment platforms compare?

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Stripe, Braintree, and PayPal are all esteemed payment platforms.

If you plan to add a payment platform to your web or mobile application, you’ll likely be choosing among these three options.

To make an informed decision about which is best suited to you and your customers in any given situation, it’s important that we first look at the pros and cons of each one in comparison:

How can one choose between them? Let us take a look at what online payment platforms are popular now. Uber uses Braintree, as does Airbnb. But Stripe also works with major companies - Adidas, Best Buy, and the top crowdfunding platform, Kickstarter. PayPal is well known by now, but its competitor Shopify is worth mentioning as it supports both Stripe and PayPal plus a lot of other similar software solutions to make the experience of receiving and sending payments convenient for both buyers and sellers alike to enjoy!

Stripe, Braintree, and PayPal are three payment platforms that companies use to manage the flow of money for their services or products. Each supports multiple ways of accepting payments including credit cards, debit cards, ACH bank transfers, Apple Pay, Google Wallet, Bitcoin and several others. Both Stripe and Braintree charge a percentage of each payment processed with your account while PayPal charges flat fees for each transaction.

But before we jump to any comparisons, we should first clarify the relation between Braintree and PayPal. One could say that they both work in similar fields, but they provide different products at the same time. As you may know, Braintree belongs to PayPal. But when comparing these two it is best to consider them as two separate entities.

Supported Payment Methods

While some eCommerce websites can support Visa, Mastercard, American Express, Diners Club, Discover, JCB cards, and Asian cards thanks to Stripe on the one hand. Other options like Braintree will often give you PayPal on the other hand.

Besides payments via credit card or PayPal on an eCommerce website - you might also need to support other payment methods. This is where you’ll find important differences between Stripe and Braintree including relevant pros and cons.

One of the advantages of Stripe is that it works with PayPal. If you’re focusing on expanding in China, Stripe will be an excellent choice for your site. Another feature of Stripe is its ACH payments (direct charges to bank accounts), which Braintree does not provide. To compete with Stripe, Braintree provides customers with great integration options with Shopify and Paypal, including PayPal digital wallet Venmo.

If you’re planning to accept payments on your marketplace or storefront, PayPal isn’t the best choice for you because it doesn't support alternative payment methods such as bitcoin and other forms of cryptocurrency. If that's the case, we recommend using Braintree or Stripe.

Fees, Chargebacks, and Refunds

The number of fees that a particular payment platform charges can be one of its most important features to consider when comparing it against another. Here, we are going to examine how three popular platforms - Stripe, Braintree, and PayPal - charge for various services, so you can see how each works.

Transaction Fees

Unlike Braintree, PayPal Payments Pro and Stripe, Shopify Payments doesn’t charge you monthly or yearly fees for using its system. Although there are no fees attached to using PayPal's Business/Pro account, if you want your customers to use an integrated shopping experience that will give you total control over how they pay, then ultimately you will end up paying more money. This is because this business account costs as much as $30 per month.

As we said above both PayPal and Braintree / Stripe sets their transaction fee at 2.9% + $0.30 for each transaction, but there is 1 additional factor to consider. For international transactions the fees go up to 3.9% + an additional standard fee associated with PayPal depending on what country you are in (e.g., Australia, 1.49%).

These fees are identical for most credit card payments except American Express cards, with PayPal setting their fees at 4.4% + a local currency fee depending on the country you are conducting business in (eg, Australia, 4.49%). When it comes to AMEX vs Bankcard transactions, there is no difference with either vendor - which means that both will charge 4.4%.

Disputes and Refunds

Sometimes, you have sellers that are sometimes fraudulent. The three major payment platforms - Stripe, Braintree and PayPal - will gladly assist with dispute processing at your expense. Stripe charges $15 to process an individual dispute while Braintree charges $10.

PayPal also charges $20 but also tacks on a tiny fee of $0.30 for each transaction. Thankfully if disputes are resolved in my favour, they will return the disputed amount to me with Square and Stripe along with the original fees charged.

Whenever you issue a refund, both Stripe and Braintree are responsible for returning the transaction fee they took earlier, which is very convenient. What about PayPal though? PayPal will also return the transaction fee for a refund, but will also charge you $0.30 for processing this return – it’s a new transaction, after all.

Keep in mind that if your merchant account doesn’t have enough money on hand to cover the chargeback and $15 fee, then each of these payment platforms will take the money directly from your bank account.

Other payment methods

As we mentioned in the comparison table, Stripe and Braintree work with different kinds of payments. Both services support Bitcoin transactions through Stripe or directly through Braintree.

-With Bitcoin transactions, Stripe charges 0.8 %-5 per transaction for all Bitcoin payments. Braintree is offering better rates on Bitcoin transactions – it doesn't charge anything for the transaction fees if the volume of your Bitcoin payments is under $1 million ($1M). Above this threshold, these companies will charge 1% for their Bitcoin transactions.

Stripe, Braintree, and PayPal all have different fees. Stripe charges a 2.9% processing fee plus a $0.30 transaction charge for AMEX transactions. Braintree charges 3.25% plus a $0.30 transaction fee for AMEX transactions while PayPal is the most expensive at 3.5% + $0.30 per transaction charge when customers use AMEX with them.

Stripe, Braintree, or PayPal for an Online Marketplace

Marketplaces require special methods for managing payments, as both the marketplace owner and the seller get part of what the buyer pays for an item. Stripe and Braintree introduced split payments several years ago to address this problem – dividing payments two ways. The marketplace owner receives a relatively small amount – the fee that the seller has agreed to pay for using the marketplace. The seller gets the rest.

To allow split payments, PayPal, Braintree and Stripe all have their plugins. Stripe comes with Connect, Braintree offers Marketplace and PayPal has Adaptive Payments. We must warn you right away that PayPal only offers Adaptive Payments to select partners. That's why they bought Braintree in the first place: to provide a modern solution for marketplaces. In other words, don't try to use Adaptive Payments in a new marketplace product - instead go with Braintree right from the start!

Besides splitting payments, Braintree and Stripe can also take care of creating a merchant account for marketplace sellers. This is especially useful since it saves you from having to go through the process manually.

Platforms That Support PayPal, Stripe, and Braintree

You can create a modern storefront or marketplace application using many programming languages such as C#, Java and PHP. These platforms, however, must offer payment platforms via APIs to work with your website’s backend language. Using an API, your application will be able to communicate directly with the payment platform. What’s great about the payment platforms that we review here is that they each come with several APIs for you to choose from.

Stripe, Braintree, and PayPal have developed well-integrated APIs for the top programming languages, including Ruby/Ruby on Rails, PHP, Python, and Node.js. We can attest to the detail orientation of all three of these integration modes as we’ve integrated Stripe, Braintree, and PayPal payment systems into our own Ruby on Rails-based applications. The sheer level of detail included in each platform's documentation was paramount to our integration efforts.

Here’s one more thing you have to take into consideration: You may need to develop a mobile application for your eCommerce website(such as Shopify). As the many popular operating systems for smartphones are iOS and Android, your payment platform must provide those APIs as well. Stripe, Braintree, and PayPal all have these APIs as well.

One of the things every payment platform has high standards for is security. To ensure that any transactions you make on your store are as safe as possible, each answer we gave makes it clear how they handle security issues.

In Conclusion

Deciding which payment platform to use for your company's customers may seem daunting, but you can’t go wrong if you stick with a familiar option like Stripe and Braintree – both of which are used by companies including Lyft. Your choice should be based on your business needs as well as customer preference regarding payment methods and the availability of services in markets where you'd like to do business.

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