Since launching in Malaysia in 2019, Stripe has grown to become one of Malaysia’s most popular payment gateways. It’s easy to integrate into e-commerce platforms like Shopify and WooCommerce, and integrates locally loved payment methods like FPX.
If you’re new to Stripe and want to know more about things like:
- How does Stripe compare with PayPal?
- What can you do with Stripe you can’t do with PayPal?
- Who can register for a Stripe account?
- How can you get a Stripe account?
… I’ve compiled the information for both and placed them side by side so you can understand the similarities and differences between Stripe and PayPal.
In this guide, we’ll be comparing Stripe’s standard account with PayPal business.
Let’s get right into it:
What is Stripe?
Stripe is a company that helps individuals and companies make and receive payments online. While it includes a payment gateway feature, Stripe is also a merchant solution. Launched in 2010 by John and Patrick Collison, Stripe is still a young company compared to PayPal which was launched in late 1998.
Nonetheless, it has been growing at record speed, with its current market share worldwide at 18.64%. Compared with PayPal’s 54.01%, Stripe is catching up and is already PayPal’s fastest growing competitor.
Most Malaysian individuals and businesses can get a Stripe account. The exception are businesses in this list.
Stripe vs PayPal: Comparison Summary
| Feature | Stripe | PayPal |
|---|---|---|
| Transaction Fees | 3% + RM1 | 3.9% + RM2 |
| Setup Fees | None | None |
| Annual Fees | None | None |
| Currency Conversion Fees | 2.0% | 4.0% |
| Payment Methods Supported | Credit card/Debit Card, FPX, AliPay, GrabPay | Credit card/Debit Card only |
| E-commerce Platform Integrations | Shopify, WooCommerce, EasyStore | Shopify, WooCommerce, EasyStore, BigCommerce |
| Recurring Payments Support | Supported natively | Not natively supported |
| Customer Service | E-mail, and phone support | E-mail, and phone support |
| Fraud Prevention | Stripe Radar | PayPal Seller Protection |
Stripe vs PayPal: Detailed Comparisons for Malaysians
Fees & Charges
Fees is one of the first considerations people make when considering a payment gateway. So let’s start off by comparing the common fees Stripe and PayPal charges for people to use their service:
Transaction Fees
Stripe charges a flat 3% + RM1 per successful transaction. On the other hand, PayPal charges 3.9% + RM2 per transaction when selling to Malaysian customers and 4.4% +US$0.3 when selling to international customers.
These rates are rather high, but is charged for monthly sales volumes of up to RM12,000. The fees can can go down to as low as 2.7% + RM2 (Malaysian customers) and 3.2% + US$0.3 per transaction (international customers) when monthly sales volume exceeds RM400,000.
For low volume sellers, Stripe would make more financial sense, whereas for very high volume sellers, it may be cheaper to use PayPal to accept payments.
Setup and Annual Fees
Both Stripe and PayPal do not charge setup and annual fees. You can get started without paying a cent.
Currency Conversion Fee
If you are accepting payments from Malaysians, this won’t apply to you. But if you are selling to customers outside Malaysia and thinking of converting your revenue back to RM at any point of your business, this will be very important.
Payment solutions such as Stripe and PayPal will charge a currency conversion fee when you convert money from a foreign currency into your local currency. For Stripe, that’s a 2.0% currency conversion fee and PayPal charges a 4.0% currency conversion fee.
Payment Methods Supported
While both Stripe and PayPal support credit and debit card payments, Stripe offers additional payment methods for the Malaysian market: FPX and e-wallets.
If you are an e-commerce business owner selling to a primarily Malaysian audience, having the option of offering FPX and e-wallet payments to your customers will help with conversions on your store.
Though, I have to highlight that the FPX fees Stripe charges users are a little on the high side in Malaysia, at 3% + RM1 per transaction. Compared to local players like iPay88 and RazerPay, it is a lot higher since neither takes an extra RM1 per transaction.
On the other hand, there’s a 2.9% + RM1 fee per transaction for AliPay and a flat 3% for GrabPay. These are also a bit higher than iPay88 and RazerPay.
Nonetheless, Stripe strips away the need for a lengthy application process, setup and annual fees, so this pricing may actually be competitive for some users.
Payment Links Support
Payment Links, launched in May 2021, is probably one of Stripe’s most exciting features. With Stripe’s Payment Links feature, you no longer need to set up an e-commerce store to start selling online. Simply create payment links inside Stripe, send the link to your customers and get paid.
While PayPal has always offered Payment Links, Stripe’s Payment Links are more useful for the Malaysian seller given the payment methods offered.
E-commerce Platform Integrations
Next, let’s take a look at how Stripe integrates with some of the most popular e-commerce platforms in Malaysia. This is important if you are currently running an e-commerce store or planning to.
Having integration with the platform you are using means you won’t likely have to pay a hefty fee for a custom solution to integrate the gateway. So, how does Stripe fare next to PayPal?
Shopify
While Shopify Payments (with zero transaction fees) is powered by Stripe, at the moment, Stripe is available as a 3rd party payment gateway in Malaysia at the moment. This might change in the future, but right now, we’ll have to wait and see.
PayPal, on the other hand, has always been supported on Shopify Malaysia. So for now, it’s fair game for both services since they are treated as 3rd party payment gateways.
WooCommerce
WooCommerce can integrate with both PayPal and Stripe fine.
EasyStore
EasyStore integrates with both PayPal and Stripe as well.
BigCommerce
BigCommerce doesn’t yet integrate with Stripe, only PayPal.
Subscription / Recurring Charges
One of the most important services Stripe offers that PayPal doesn’t is recurring payments. With Stripe, you can set up a recurring payment with Stripe Billing. Best of all, the service is essentially free for your first RM4m in recurring payments.
PayPal doesn’t offer the same or similar setup for recurring payments as Stripe. So if you are looking to simplify the collection of recurring payments, Stripe might be a better choice.
Customer Service
Both Stripe and PayPal offer 24/7 support via email, phone or chat.
Fraud Prevention
Stripe provides fraud protection through Radar and PayPal provides it using Seller Protection. Both companies have good fraud prevention protocols in place for sellers.
The Verdict
With Stripe’s arrival in Malaysia, Malaysians now have another option for making and receiving payments online. For most small volume sellers, Stripe can offer a lower transaction fee for receiving payments from customers.
On top of that, Stripe’s biggest advantage over PayPal is its FPX payment method feature, which now puts it in the same league as local players like MOLPay, iPay88, eGHL and more.
At the moment, Stripe integrates with popular e-commerce platforms in Malaysia such as Shopify, EasyStore and WooCommerce. If you are looking to charge recurring payments to your customers, you can take advantage of Stripe Recurring Billing to streamline your payments.
While both services have their pros and cons, in my opinion, it is worth testing to see which service fits your business model better.
15 Responses
Hi Lu Wee, as usual, appreciate your articles. May i ask for u to write an article to compare Shopify vs Shopline? many thanks for your consideration. Have a good day!
Hi Sarah, you’re welcome. Glad you find it useful. Thanks for the suggestion. I’ll look into it and come up with a review for you.
You have a good day too 🙂
I really like your writing. It really help me in finding my journey to study about e-commerce. In this article, can i know does stripe work well for fpx payment? Fpx is like maybank2u or cimbclick. Because in malaysia mostly they prefer to use bank in and debit card
Thanks, I’m glad you found this useful. Stripe does not support FPX payments. You will need other gateways such as iPay88, MOLPay, SenangPay or BillPlz for that.
Hope this helps!
Update (8/10/19): Good news! Stripe has introduced FPX payments in beta!
What about withdrawal fees for Stripe?
Hey, do you mean withdrawing from Stripe to your own account?
I’ve been using paypal for 4 years in my store. After using Stripe as a secondary payment option, customers seem to prefer Stripe. It will probably increase your conversion rates but the fraudulent orders I received have also spiked. You are able to see how many failed attempts they’ve made through Stripe with different cards and the rating in your dashboard, it’s pretty cool and scary at the same time.
Just to add, there’s a few disadvantages to using Stripe, “There are no fees to refund a charge, but the fees from the original charge are not returned.” quoted directly from Stripe. Also, their chargeback fee is higher than Paypal. Lastly, they have a payout waiting period. You can’t transfer out your money instantly, unlike Paypal.
Have you had any experience with other payment processors like braintree or adyen?
Yes, I think Stripe’s payment features are much simpler. So pros and cons with that. So I do what you do too – just put both there for people to choose from.
Thanks for sharing your thoughts on Stripe!
No experience with Braintree or Adyen yet, but am exploring Adyen currently. Will update a blog post on this when I do have more info.
Does stripe have any withdrawal charges?
Not that I know of. Do you mean withdrawing to your bank account?
Do you know why Stripe Processing Fees (%) differ according to Amount?
Let’s say (A) I’ve a customer purchase a product Amount of RM10.99. Stripe will charged me some fees:-
1. Stripe processing fee – RM1.33 (12.1%???)
2. Tax (6% – of the Stripe Processing Fee) – RM0.08
– so my Net would be equal to (Amount – Fees) => RM10.99 – RM1.41 = RM9.58
But, if let’s say (B) I’ve a customer purchase a product Amount of RM21.98:-
1. Stripe processing fee – RM1.66 (7.55%??)
2. Tax – RM0.10
– Net => RM21.98 – RM1.76 = RM20.22
So I confidently know that the TAX charge is 6%. But as for Stripe Processing Fee Charge % differ each time according to the amount. I don’t see where does 3.4% + RM2 that you mentioned above applied? Could you elaborate on this matter of mine?
Hi Fathi,
The charges have been updated. I’ll update this post to reflect that. Now it is 3.00% + RM1.00.
Using your examples, the fees appear consistent to this new fee.
RM10.99 * 3.00% + RM1.00 = RM1.33 & RM21.98 * 3.00% + RM1.00 = RM1.66
Hope this clarifies! You were probably confused by the fee as the 3.4% + RM2 was the fee upon launch. The new fee has now been changed to 3.00% + RM1.00.
Best,
Lu Wee
Hi, I’m a new online seller from SG. If a customer from MY is purchasing my product, meaning it would be recommendable to use Stripe instead of Paypal? I’ve checked, Paypal doesn’t support RM transactions.
Another thing, do making payment via Strip redirects the customer to Stripe’s payment site or remain in my checkout page? Paypal allows the option for credit/debit payment to be on the same checkout page.
Hi there,
Not too sure what you mean by PayPal not support RM transactions. PayPal does support RM transactions… but it may be that you’ve set up your store in a way that the checkout currency is fixed. May I know what platform you are using?
Normally for Stripe, the transaction happens on your site directly.
Hope this helps.
Best,
Lu Wee
Hello,
My customers are all from abroad, and most of them use US dollars or Hong Kong dollars to make payment. Is the transaction fee also 3% + RM1.00 if use Stripe to receive payment?
Is there any fee if the customer requests a refund? Currently,if you use PayPal to refund, and you still have to charge 4.4% + $0.30 USD fixed rate.(PayPal changed policy)
As you mentioned above for Stripe,that’s a 2.0% currency conversion fee and is there any other fee for withdrawal in a local bank account?