October 7, 2019

Stripe has officially launched in Malaysia. For Malaysians selling online or thinking about selling online, this is great news. Now you'll have an additional option to accept payments whether locally or internationally.

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 13.41%. Compared with PayPal's 64.72%, this figure may feel tiny. However, at this size, Stripe is in fact one of PayPal's biggest contenders.

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

3.4% + RM2

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 (beta)

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 3.4% + RM2 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. In this case, it's a tie for both services.

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

One cool feature that Stripe is slated to offer is FPX payments. This is something that PayPal doesn't offer, even though it has been in Malaysia for much longer.

Though, Stripe's FPX is still in beta, so you'll need to request access to it by invite :

The fees for FPX  appear to be the same as credit/debit card - a flat 3.4% + RM2. Compared to local players like MOLPay and iPay88, it is a lot higher since neither takes an extra RM2 per transaction.

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.

To be eligible for FPX, you'll need to fulfil the following criteria:

This is a massive advantage Stripe has over PayPal for anyone considering to sell to Malaysians who much prefer FPX payments over credit card.

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.

About the author 

Lu Wee Tang

Lu Wee is the founder and writer of Entrepreneur Campfire. She started her journey in e-commerce and SEO after leaving her engineering career behind. Now, she consults small and medium businesses in Malaysia and Singapore on how to digitise and grow their business.

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  2. 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!

    1. 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 🙂

  3. 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

    1. 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!

  4. 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?

    1. 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.

  5. 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?

    1. 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

  6. 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.

    1. 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

  7. 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?

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