Published by Bastion Prime | WooCommerce Migration Specialists
When you’re setting up your own online store for the first time — whether you’re migrating from Etsy or building something completely new — payment processing is one of those decisions that feels more complicated than it needs to be.
Stripe or PayPal? Both? Neither? What are the actual fees? Which one do customers prefer? What happens when something goes wrong?
I’ve helped a lot of small business owners set up WooCommerce stores, and this question comes up every single time. So let me give you a straightforward answer based on what actually works — not what the marketing pages say.
The short version: most stores should use both. But how you prioritize them, and why, depends on your specific situation. Here’s everything you need to know.
Why Payment Processing Matters More Than You Think
Before getting into the comparison, it’s worth understanding why this decision matters.
When you were selling on Etsy or Amazon, payment processing was invisible. The platform handled it, charged you for it as part of their fee structure, and you never had to think about it. On your own store, you’re responsible for setting it up — and the processor you choose directly affects three things: how much you keep from every sale, how easy it is for customers to buy, and how quickly you access your money.
A processor that charges 0.5% more than the alternative might not sound significant. On $5,000 per month in revenue, that’s $25 per month — $300 per year. Not life-changing, but not nothing either. On $10,000 per month, it’s $600 per year. The numbers add up, and they’re worth understanding before you commit.
More importantly, the checkout experience your payment processor enables directly affects your conversion rate. Every additional step, every moment of friction, every payment method that isn’t available when a customer wants to use it — these things cost you sales. A checkout that converts at 3.5% instead of 2.5% on 500 monthly visitors at $75 average order value is the difference between $1,312 and $937 in monthly revenue. That gap is entirely in the checkout experience.
Stripe — The Developer’s Choice That Became Everyone’s Choice
Stripe launched in 2011 with a focus on making payment processing simple for developers. It succeeded so completely at that goal that it became the default payment processor for most serious e-commerce businesses — not just tech companies.
What Stripe charges:
Standard pricing in the United States:
- 2.9% plus $0.30 per successful card transaction
- No monthly fees
- No setup fees
- No cancellation fees
For international cards (cards issued outside the US), an additional 1.5% is added. For currency conversion, an additional 1% applies.
Real cost calculation — seller doing $5,000/month:
If your average order value is $65 and you process roughly 77 orders per month:
| Item | Calculation | Cost |
|---|---|---|
| Percentage fee (2.9%) | 2.9% × $5,000 | $145.00 |
| Per-transaction fee | $0.30 × 77 orders | $23.10 |
| Total monthly cost | $168.10 | |
| Effective rate | $168.10 / $5,000 | 3.36% |
That effective rate of 3.36% — higher than the headline 2.9% because of the per-transaction fee — is important to understand. The per-transaction fee has a bigger impact on sellers with lower average order values. If your average order is $20, the $0.30 fee represents 1.5% of that transaction on top of the percentage fee. If your average order is $150, it represents only 0.2%.
What Stripe does well:
Stripe’s checkout experience is excellent. It supports every major card type — Visa, Mastercard, American Express, Discover — plus Apple Pay, Google Pay, and Link (Stripe’s one-click checkout). On mobile, Apple Pay and Google Pay let customers complete a purchase with a single biometric confirmation — no card entry, no form filling. This is one of the most significant conversion improvements you can make to a mobile checkout.
Stripe’s fraud protection is sophisticated. Their machine learning system, called Stripe Radar, automatically screens transactions and blocks suspicious activity. For sellers who aren’t fraud experts — which is most small business owners — having a processor that handles this automatically is genuinely valuable.
Payouts are fast. With standard Stripe settings, funds are deposited to your bank account two business days after a transaction. You can enable next-day payouts for an additional 0.25% fee if cash flow is a concern.
Where Stripe falls short:
Stripe’s customer support is good but not exceptional. Phone support is available, but many sellers find the documentation and email support sufficient for most issues. For sellers who prefer to talk to a human when something goes wrong, this can be frustrating.
Stripe also has a relatively aggressive fraud prevention system that occasionally flags legitimate transactions. If you sell to international customers, particularly in certain high-risk countries, you may see a higher rate of declined transactions than with some competitors.
PayPal — The Trust Signal That Still Converts
PayPal has been around since 1998. It has over 400 million active accounts worldwide. And despite the emergence of newer, slicker alternatives, it remains one of the highest-converting payment methods you can offer on an e-commerce store — particularly for customers who are buying from you for the first time.
What PayPal charges:
PayPal’s standard rates for online transactions:
- 3.49% plus $0.49 per transaction (PayPal Checkout)
- 2.99% plus $0.49 per transaction (PayPal Payments Standard with card processing)
PayPal is more expensive than Stripe on a per-transaction basis. There’s no way around this — it’s just true. For sellers who are cost-focused, Stripe is the better deal.
Real cost calculation — same seller doing $5,000/month:
| Item | Calculation | Cost |
|---|---|---|
| Percentage fee (3.49%) | 3.49% × $5,000 | $174.50 |
| Per-transaction fee | $0.49 × 77 orders | $37.73 |
| Total monthly cost | $212.23 | |
| Effective rate | $212.23 / $5,000 | 4.24% |
That’s $44 more per month than Stripe on the same volume — $528 more per year. For a seller doing $10,000 per month, the difference is over $1,000 per year.
So why use PayPal at all?
Because customers trust it — and that trust converts.
Multiple studies have found that offering PayPal at checkout increases conversion rates by 2 to 6 percentage points compared to card-only checkout. The reason is simple: many online shoppers, particularly older demographics and international buyers, are more comfortable entering their PayPal password than entering their credit card details on an unfamiliar website.
For a seller who’s just launched their own store and doesn’t yet have the brand recognition that makes customers automatically trust the checkout, that PayPal button is a significant reassurance signal. Customers recognize the logo, they know the brand, and they know PayPal will protect them if something goes wrong with their order.
There’s also a practical consideration: a meaningful percentage of online shoppers specifically prefer PayPal and will abandon checkout if it’s not available. The exact number varies by product category and customer demographics, but most estimates put it at 5 to 10% of online shoppers. If you’re processing 77 orders per month, not offering PayPal might cost you four to eight sales — at $65 average order value, that’s $260 to $520 in lost revenue. More than enough to offset PayPal’s higher fees.
Where PayPal falls short:
PayPal’s checkout experience, particularly on mobile, is less smooth than Stripe. The redirect to PayPal’s site and back interrupts the flow of a native checkout in a way that Apple Pay or Google Pay through Stripe doesn’t.
PayPal’s dispute resolution process is also more seller-unfriendly than Stripe’s. PayPal’s buyer protection program is generous to buyers — which is great for customer confidence, but means sellers can sometimes lose disputes that they would win under Stripe’s more balanced process.
PayPal also has a history of holding funds for new sellers or sellers whose transaction volume suddenly increases. If you launch a successful promotion and process significantly more volume than usual, PayPal may place a temporary hold on some of those funds. This is less of an issue for established accounts but worth knowing about as a new seller.
The Practical Answer: Use Both
For most WooCommerce stores, the right answer isn’t Stripe or PayPal — it’s Stripe and PayPal.
Here’s how to think about it:
Stripe as your primary processor. Set up Stripe first, enable Apple Pay and Google Pay, and make it the default checkout experience. This gives you the best payment experience for most customers — fast, smooth, modern.
PayPal as a secondary option. Add PayPal as an alternative payment method that customers can select at checkout. This captures the buyers who specifically prefer PayPal and provides an additional trust signal for first-time customers.
WooCommerce supports both simultaneously with no technical complications. The customer sees a checkout page with card fields (powered by Stripe) and a PayPal button below. They choose whichever they prefer. Both payment sources deposit to your bank account — Stripe directly, PayPal to your PayPal account which you then transfer to your bank.
The small additional complexity of managing two payment processors is worth it for the conversion improvement. In our experience building WooCommerce stores for sellers migrating from marketplaces, stores that offer both Stripe and PayPal consistently outperform stores that offer only one.
What About Other Payment Options
Apple Pay and Google Pay — these are enabled through Stripe at no additional cost and are increasingly important as mobile commerce grows. In 2026, over 65% of e-commerce transactions happen on mobile devices. Apple Pay and Google Pay eliminate the friction of typing card details on a small screen. Enable them. It takes five minutes in your Stripe dashboard.
Buy Now Pay Later (BNPAY) — options like Klarna, Afterpay, and Affirm allow customers to split purchases into installments. These can meaningfully increase conversion on higher-priced items — if your average order value is $150 or more, it’s worth considering. Each has its own fee structure and integration requirements.
Checks and bank transfers — not worth the operational complexity for most small business e-commerce. Stick with card processing.
A Note on Taxes and Compliance
Payment processors handle transaction processing — they don’t handle sales tax compliance. If you’re selling to customers across multiple US states, you may have sales tax obligations depending on your revenue volume and whether you have economic nexus in those states.
This is a topic that deserves its own article, but the short version is: look into a tool like TaxJar or Avalara that integrates with WooCommerce and automates sales tax calculation and filing. It’s not free, but the alternative — manually tracking your tax obligations across fifty states — is not realistic for a growing small business.
Setting Up Stripe and PayPal on WooCommerce
Both Stripe and PayPal have official WooCommerce plugins that make integration straightforward. The process is:
- Install the WooCommerce Stripe Payment Gateway plugin
- Connect it to your Stripe account (takes about five minutes)
- Enable Apple Pay and Google Pay in the plugin settings
- Install the WooCommerce PayPal Payments plugin
- Connect it to your PayPal business account
- Test both payment methods with a real transaction before launching
We handle all of this as part of every store we build — every migration package includes Stripe and PayPal fully configured and tested before handover. You don’t launch with payment questions — you launch with a checkout that’s been verified to work.
The Bottom Line
Stripe is the better processor on cost and checkout experience. PayPal is the better trust signal for new stores and customers who prefer it. The right answer for most small business WooCommerce stores is both — Stripe as primary, PayPal as secondary.
The fee difference between using only Stripe versus using Stripe plus PayPal is negligible — PayPal’s higher rate only applies to transactions where the customer actually chooses PayPal. The conversion benefit of offering both outweighs the marginal cost increase.
Set it up once. Test it. Then stop thinking about payment processing and focus on what actually builds your business — your products, your content, and your customers.
If you’re in the process of building your own store and want to make sure everything is set up correctly from the start, book a free consultation and we’ll walk you through your specific situation.
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