For small businesses choosing their first payment processor, the decision between PayPal and Stripe often comes down to factors beyond just the fee percentage. This guide focuses specifically on small business needs.
PayPal's 435 million users mean many customers specifically trust and prefer paying through PayPal, especially for higher-value purchases. This trust factor can increase conversion rates even though PayPal's fees are higher than Stripe's.
PayPal can be integrated by non-technical business owners within minutes using simple buttons or links. Stripe typically requires either a developer or use of a platform with built-in Stripe integration (Shopify, WooCommerce, etc.) for a smooth setup.
| Monthly Sales | PayPal G&S Fees | Stripe Fees | Savings with Stripe |
|---|---|---|---|
| $1,000 | $39.80 | $32.00 | $7.80/month |
| $5,000 | $179.00 | $148.00 | $31/month |
| $10,000 | $354.90 | $293.00 | $61.90/month |
For a brand-new small business with no technical resources, starting with PayPal removes setup friction and leverages existing customer trust. Once you have $3,000+/month in consistent sales and either technical help or a platform with built-in Stripe support, switching to Stripe (or offering both) typically pays off through lower fees.
💡 Best practice: Most growing small businesses end up offering both — Stripe as the primary low-fee option, PayPal as a trusted alternative for customers who prefer it.