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.
Stripe vs PayPal: Comparison Summary
|Transaction Fees||3% + RM1||3.9% + RM2|
|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:
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?
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 can integrate with both PayPal and Stripe fine.
EasyStore integrates with both PayPal and Stripe as well.
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.
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.
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