Stripe and PayPal are the two most popular payment processors for freelancers and online sellers. Both charge a percentage plus a flat fee per transaction — but the rates differ, and the right choice depends on how much you charge and who your clients are.
Current Fee Rates (US)
| Platform | Standard Rate | International Cards |
|---|---|---|
| Stripe | 2.9% + $0.30 | +1.5% |
| PayPal | 3.49% + $0.49 | +1.5% |
Rates are for standard card transactions. Always verify with official pricing pages.
Real-World Examples
The flat fee component makes a significant difference on small transactions. Here's how the fees compare across common invoice amounts:
| Invoice | Stripe Fee | PayPal Fee | Difference |
|---|---|---|---|
| $25 | $1.03 | $1.36 | PayPal costs $0.33 more |
| $100 | $3.20 | $3.98 | PayPal costs $0.78 more |
| $500 | $14.80 | $17.94 | PayPal costs $3.14 more |
| $1,000 | $29.30 | $35.39 | PayPal costs $6.09 more |
When PayPal Wins
Despite higher standard rates, PayPal has advantages in certain situations:
- Client preference: Some clients only have PayPal and won't enter card details elsewhere. Losing a client over this costs more than the fee difference.
- Friends & Family: For personal payments (not business), PayPal F&F has no fees — though using it for business payments violates PayPal's terms.
- Existing PayPal balance: Sending money between PayPal balances is free.
- Brand recognition: PayPal's checkout button often gets higher conversion rates from consumers who trust the PayPal brand.
When Stripe Wins
- Lower fees: Stripe is consistently cheaper per transaction across all common invoice amounts.
- ACH/bank transfers: Stripe ACH charges just 0.8% (capped at $5) — dramatically cheaper for large invoices.
- Developer-friendly: Better API, more payment method support, and cleaner invoicing tools.
- No holding funds: Stripe has a better reputation for not unexpectedly freezing accounts.
The Verdict
For most freelancers billing professional clients, Stripe is the better default — lower fees, better tooling, and more reliable payouts. For larger invoices ($1,000+), Stripe ACH is worth considering and can reduce fees by 80–90% compared to card processing.
Offer PayPal as an alternative for clients who prefer it, but don't make it your primary processor if you can help it.
Try it yourself