Verdict: Stripe if you’re building your own checkout, billing subscribers or paying out to sellers on a marketplace, because it costs less on UK cards and gives your developer far more to work with. PayPal if your customers ask for it by name, as a second button beside your main checkout rather than the only way to pay.
Best For Stripe: A UK software business billing 500 subscribers £29 a month, which needs upgrades charged part-way through a month and failed payments retried. A print maker selling on Shopify, Etsy and its own site who wants every payout matched in Xero. Any marketplace where the platform keeps a share of each sale.
Best For PayPal: A shop whose customers already pay with PayPal elsewhere and ask for it at checkout. A freelancer invoicing clients in the US and Europe who know and trust the brand.
Not Ideal For: Stripe, if you’re a sole trader with no developer: you can send Payment Links, but little of the rest is open to you without code. PayPal, as the only way to take subscription payments, because 2.9% + 30p on every renewal adds up fast against Stripe’s 1.5% + 20p. And neither, if a frozen account would stop you paying suppliers for three weeks.
Key Facts: Stripe charges 1.5% + 20p on UK cards online. PayPal charges 1.2% + 30p for card payments through its Advanced card service and 2.9% + 30p on a standard checkout payment (provider pricing pages, 5 October 2026). The two card rates cost the same at £33.33: below that Stripe is cheaper, above it PayPal’s card rate is (our sums on the published rates, 9 November 2026).
Stripe Payments UK Ltd is FCA-authorised as an EMI (FRN 900461, since 2 May 2018). PayPal UK Ltd took over from PayPal (Europe) S.a.r.l. et Cie on 1 November 2023, FCA EMI FRN 994790.
Which Is Better for UK Small Businesses?
For most UK small businesses we’d choose Stripe as the main way to take cards, and add PayPal only if your customers want it. Stripe costs less on every standard UK card, and the gap grows with your turnover.
Take an online shop turning over £10,000 a month at an average order of £40, with 70% of sales in the UK and 30% in the EU. On Stripe the fees come to about £230 a month. Take the same sales through PayPal’s standard checkout, with its 1.29% surcharge on EU buyers, and you pay about £405, a difference of roughly £175 a month or £2,100 a year (our sums on stripe.com/gb/pricing and paypal.com/uk/business/paypal-business-fees).
PayPal’s argument is about sales, not fees. A study by Nielsen, commissioned by PayPal and based on 95,161 UK desktop transactions between October 2019 and September 2020, found checkouts converted 24% better with PayPal on. It is PayPal’s own study, it is several years old and it measured desktop shopping, so we’d treat it as a reason to test the button on your own shop rather than a promise of extra sales.
That test is cheap to run. Add PayPal beside Stripe, watch how many customers use it over a couple of months, and compare the extra fees with any sales you think it brought in. For a subscription business the case is weaker, because a customer who has already signed up doesn’t meet the checkout again.
Two kinds of business make the choice for you. If you bill 500 subscribers £29 a month and plan to add usage-based tiers and annual plans, Stripe Billing handles the part-month charges, retries and customer portal that PayPal doesn’t list. If you run a marketplace that splits each payment between sellers and the platform, Stripe Connect is built for exactly that, while PayPal’s route joins its Payouts service, Braintree and ordinary PayPal accounts together (stripe.com/connect).
Stripe vs PayPal Fees and Charges
Card Transaction Fees
Stripe charges by where the card comes from. Online, a standard UK personal Visa or Mastercard costs 1.5% + 20p, a premium UK card 2.8% + 20p, an EEA card 2.5% + 20p and any other international card 3.15% + 20p, and Stripe adds 2% when it has to convert a currency (stripe.com/gb/pricing, 5 October 2026).
PayPal charges by product, which is why its rates look contradictory at first. Its card service for businesses, Advanced Credit and Debit Card Payments, charges 1.2% + 30p on cards and 3.5% on American Express, and the same 1.2% + 30p applies when a buyer without a PayPal account pays by card. Advanced card payments can also be priced as interchange plus: the card issuer’s own fee, which PayPal puts at roughly 0.2% to 2%, plus 1.2% + 30p. Older Website Payments Pro accounts pay more, at 3.4% + 30p on cards and £20 a month (paypal.com/uk/business/paypal-business-fees, checked 9 November 2026).
Most PayPal checkout payments, though, are made from a PayPal account, and those cost 2.9% + 30p. You can’t steer a customer away from paying that way once the button is on your page.
Since 1 October 2026 PayPal has offered an optional tiered plan that lowers that 2.9%, but only if you ask PayPal to enrol you and accept its updated terms. Once you’re in, each month’s rate depends on how much you took at the standard rate in the previous calendar month:
| Previous month’s eligible volume | PayPal rate this month |
|---|---|
| Up to £4,000 | 2.9% + 30p |
| Over £4,000, up to £8,000 | 2.4% + 30p |
| Over £8,000 | 2.1% + 30p |
So a busy December lowers January’s fees rather than December’s, and until PayPal confirms your enrolment the standard rate applies. Even at 2.1% + 30p, a £40 sale costs £1.14, against 80p on Stripe (paypal.com/uk/business/paypal-business-fees, checked 9 November 2026).
Sales abroad cost more on top. PayPal adds 1.29% when the buyer is in the EEA and 1.99% elsewhere, so a German customer paying from their PayPal balance costs you 4.19% + 30p before any currency conversion (paypal.com/uk/business/paypal-business-fees).
PayPal’s currency conversion is built into the exchange rate it gives you, at roughly 3% above the wholesale rate, rather than shown as a separate charge. Stripe’s 2% appears as its own line, which makes a £5,000 invoice to a US client much easier to reconcile on Stripe.
In person, the rates are simpler. Stripe Terminal charges 1.4% + 10p on EEA cards and 2.9% + 10p on others, and Tap to Pay on iPhone adds 10p a payment. PayPal Point of Sale, formerly Zettle, charges a flat 1.75% on every card, Amex included (stripe.com/gb/terminal and zettle.com/gb, 6 October 2026).
Monthly, Setup and Contract Costs
Neither provider charges a monthly fee on its standard service, and neither charges for setup, PCI compliance or a minimum volume. That makes both cheaper to start with than a traditional acquirer such as Worldpay or Elavon, where a contract can add £25 to £80 a month in PCI and gateway fees on top of the rate.
Stripe’s costs build up in its extras. Stripe Billing, for subscriptions, costs 0.7% of the amount billed on pay-as-you-go, or £450 a month flat for up to £70,000 of monthly recurring revenue, with 0.67% above that. Radar fraud screening costs from 4p a screened payment, or from £8 a month on a subscription, and Chargeback Protection is an optional 0.4%. None of these is compulsory, but a subscription business will almost certainly end up paying for Billing (stripe.com/gb/pricing, 5 October 2026).
PayPal charges no monthly or setup fee for recurring payments in the UK. Subscriptions are built into its checkout, and you pay only the transaction fee when a payment goes through (paypal.com/uk/business/accept-payments/recurring-payments, checked 6 October 2026). The exception is the older Website Payments Pro, at £20 a month, with its optional Recurring Payment Tool another £20 a month on top (paypal.com/uk/business/paypal-business-fees, checked 9 November 2026).
Other Fees to Watch
Disputes cost more than their size suggests. Stripe charges £20 for each one and refunds it if you win, so five disputed sales in a quiet month cost you £100 before you’ve argued a single case (stripe.com/gb/pricing, 5 October 2026).
PayPal’s standard dispute fee is £12.00, rising to £24.00 on accounts with a high number of disputes, and a card chargeback costs £14.00 (paypal.com/uk/business/paypal-business-fees). PayPal also tends to side with the buyer in borderline cases, so you can win a card chargeback and still lose the PayPal claim on the same sale.
If your cash flow is tight, how quickly you’re paid can matter more than the rate. Stripe Instant Payouts cost 1%, with a 40p minimum, and reach your bank in about 30 minutes over Faster Payments, at any hour and on bank holidays. That’s useful if you sell at the weekend and your supplier wants paying on Monday. PayPal’s standard withdrawal to a UK bank is free when no currency is converted, but it takes a few working days (stripe.com/gb/pricing and paypal.com/uk/business/paypal-business-fees).
Stripe also lets customers pay straight from their bank account. Its Pay by Bank costs 0.5% + 20p, capped at £5, about a third of its card rate, and PayPal’s UK fee page lists nothing comparable. If many of your customers would happily pay by bank transfer, that is a saving only Stripe offers (stripe.com/gb/pricing/local-payment-methods and paypal.com/uk/business/paypal-business-fees, 6 October 2026).
Fee Verdict: Who Costs Less
Against PayPal’s standard 2.9% + 30p, Stripe is cheaper at every sale size. At £10,000 a month in 250 orders of £40, a UK-only shop pays £200 on Stripe against £365 on PayPal.
Add 30% EU traffic and the gap widens to about £175 a month, because of PayPal’s 1.29% surcharge on EU buyers. A subscription business billing 500 customers £29 a month pays about £419 on Stripe with Billing, against £570.50 at PayPal’s standard rate (our sums on the published rates, 9 November 2026).
PayPal’s 1.2% + 30p card rate changes the answer on bigger sales. Its fixed fee is 10p higher than Stripe’s and its percentage 0.3 points lower, so the two cost the same at £33.33:
| Sale | Stripe, 1.5% + 20p | PayPal standard, 2.9% + 30p | PayPal card, 1.2% + 30p |
|---|---|---|---|
| £10 | 35p | 59p | 42p |
| £40 | 80p | £1.46 | 78p |
| £100 | £1.70 | £3.20 | £1.50 |
That cheaper rate covers card payments only, through Advanced Credit and Debit Card Payments, which PayPal approves on application, or from a buyer paying by card without a PayPal account. Every customer who logs in and pays from their PayPal account still costs you 2.9% + 30p.
On £40 orders, the PayPal card rate saves you 2p a sale over Stripe, while each payment from a PayPal account costs 66p more. About one account payment in 34 is enough to wipe out the saving. Nobody publishes a UK figure for how customers split between the two, so your own checkout figures are the only reliable guide.
Stripe vs PayPal Payment Methods and Checkout Options
Cards, Wallets and Alternative Payment Methods
Both take Visa, Mastercard, Amex, Apple Pay and Google Pay. Stripe goes further on the ways Europeans like to pay: iDEAL in the Netherlands, Bancontact in Belgium, SEPA Direct Debit, EPS and Przelewy24. It adds 1.5% when those bank-based methods are used from abroad, which matters if, say, a third of your customers are Dutch (stripe.com/gb/pricing/local-payment-methods, 6 October 2026).
For buy now, pay later, Stripe offers Klarna Pay Later and Pay in 3 at 4.99% + 35p, and its UK rate card also lists Clearpay, Billie and Scalapay.
PayPal’s options centre on its own account. iDEAL, SEPA Direct Debit and Bancontact aren’t listed for UK merchants on its standard checkout, so if you sell into the Netherlands or Belgium and want those local methods, Stripe covers more of them.
PayPal Pay in 3 lets UK buyers split purchases between £20 and £3,000 into three interest-free payments. Since 15 July 2026 the FCA has regulated this kind of credit, so a buyer unhappy with the terms can now take a complaint to the Financial Ombudsman Service (paypal.com/uk/webapps/mpp/paypal-payin3 and PayPal’s UK BNPL regulation FAQs, 6 October 2026).
Stripe Link, with more than 250 million registered users worldwide, lets a returning Stripe customer pay in one click. PayPal’s button does the same job with a name far more UK shoppers will recognise, while Link gives you more control over how the checkout looks.
Checkout Experience
Stripe Checkout is a hosted payment page that handles the form fields, checks, 3D Secure and strong customer authentication (SCA), payment-method choice and the redirect afterwards. If you use it, or Stripe Elements, your PCI compliance paperwork drops to SAQ A, the shortest self-assessment, which saves a real amount of audit work each year (stripe.com/gb/payments/checkout).
Without a developer, Stripe Payment Links are the way in. They need no code, handle subscriptions and your own branding, and you can paste the link into an invoice email or an Instagram bio. Stripe Elements gives you deeper control over the design if you have someone to build it.
PayPal Checkout works as a button and a pop-up: the buyer clicks, logs in to PayPal in a small window, and the window closes once they’ve paid. You get less say over how it looks, and in return your customer sees a payment screen they already know.
PayPal Complete Payments, reported to have launched in the UK in early 2024, puts card and PayPal account payments in one form. Both providers handle SCA and 3D Secure 2 automatically.
Methods Verdict
Stripe covers more ways to pay: European bank methods, UK open banking, Link, and real control over how the checkout behaves. If your customers are spread across Europe or you want them paying by bank, that range is the reason to choose it.
PayPal’s strength is familiarity. The button, Pay in 3 and PayPal’s own study of a 24% uplift on UK desktop checkouts all point the same way, but none of it tells you how your customers will behave. We’d add PayPal as a second button beside Stripe and keep it only if enough of your customers use it to cover the extra fees, accepting one more payout feed to reconcile in your accounts.
Stripe vs PayPal Hardware, POS and In-Person Payments
Card Readers and Terminals
Stripe Terminal’s cheapest reader is the BBPOS WisePad 3 at £49 excluding VAT, a Bluetooth reader with a PIN pad, and its Reader S700 and S710 cost £229 each. Tap to Pay on iPhone needs no hardware but adds 10p a payment to the standard in-person rate (stripe.com/gb/terminal, 5 October 2026). Those in-person rates sit below Stripe’s online ones: 1.4% + 10p on EEA cards and 2.9% + 10p on others (stripe.com/gb/terminal, 6 October 2026).
PayPal Point of Sale sells its standard reader at around £69 excluding VAT, with the first reader at about £29 for eligible new businesses, and charges a flat 1.75% on every card (zettle.com/gb, 5 October 2026). If you already sell online with PayPal, your in-person sales appear in the same PayPal Business dashboard, so a trader doing weekend markets and weekday Shopify orders sees all the money in one place.
POS Software and Hardware Add-ons
Stripe Terminal needs a developer. You bring your own till software and Stripe handles the payments behind it; there’s no Stripe till app to download. That suits a kiosk, a delivery app or a platform you’re building yourself, and it doesn’t suit a market trader who just wants to take cards on Saturday (stripe.com/docs/terminal).
The PayPal Point of Sale app is free on iOS and Android. It handles products and stock, gift cards, live sales reports and staff, and connects directly to Xero, QuickBooks and Shopify, so a florist or a small shop can be selling within an hour of unboxing the reader (zettle.com/gb).
In-Person Verdict
For selling face to face without a developer, PayPal Point of Sale is the easier choice: a reader that works out of the box, 1.75% on every card, a free till app and the same dashboard as your online PayPal sales. Stripe Terminal makes sense when taking cards in person is one part of something you’re building, such as a delivery service, a kiosk or a marketplace.
Neither is the best fit for a busy shop. If you run three tills with four staff, Square and SumUp give you fuller till systems without any building.
Stripe vs PayPal Online Payments and Integrations
Hosted Checkout, Payment Links and APIs
Developers tend to judge payment APIs against Stripe’s. It offers idempotency keys so a retried request can’t charge twice, detailed webhooks, clear error messages and a test environment that behaves like the live one, with SDKs for Ruby, Python, PHP, Java, Node.js, Go, .NET, iOS and Android. Its command-line tool and Workbench make problems quicker to trace while you build (stripe.com/docs).
PayPal’s developer offer runs on three overlapping tracks: its REST API v2, the JavaScript SDK for Checkout, and Braintree’s separate SDKs. Their error handling differs from one to the next, so anything beyond the basic Checkout button usually takes longer to build than the same thing on Stripe (developer.paypal.com).
For payment links, Stripe lets you add your branding, subscriptions and a page to send customers to afterwards, all without code. PayPal’s links are simpler and carry the PayPal brand. Both do the job: Stripe gives you more control, and PayPal gives your customer a name they already know.
Platform Integrations
Both plug into Shopify, WooCommerce, Magento (Adobe Commerce), Wix, BigCommerce, Squarespace, Xero and QuickBooks. On Shopify they sit differently: Stripe powers Shopify Payments itself, while PayPal appears as an extra checkout option, so a Shopify shop is already paying Stripe one way or another (stripe.com/gb and paypal.com/uk/business/integrations).
Shopify Payments starts at 2% + 25p on the Basic plan. Shopify says a third-party transaction fee may apply when you use another provider instead: 2% on Basic, 1% on Grow, 0.6% on Advanced and 0.2% on Plus, on top of what Stripe or PayPal charge. On Basic that is more than Stripe’s whole UK card percentage, so put your Shopify plan into the sum before you compare (shopify.com/uk/pricing, checked 9 November 2026).
(Sources: xero.com/uk/integrations for Stripe; squarespace.com/payments for Squarespace gateway support.)
Reconciliation is easy to overlook until the VAT quarter comes round. Stripe shows the fee on every transaction in each payout, so your accountant or your QuickBooks rules can match payments to invoices line by line. PayPal usually pays out after taking its fees, which leaves your bookkeeper to unpick one payout into dozens of sales, and at 500 orders a month that takes real time.
Online Verdict
For a marketplace, Stripe Connect is the clear choice. Its Standard, Express and Custom accounts handle split payments, identity checks on your sellers, payouts to them within 30 minutes and compliance across countries from one API. PayPal’s Payouts service can send money to many people at once, but it doesn’t do the seller sign-up and checks, so if your business pays other businesses out of customer payments, use Connect (stripe.com/connect).
For a checkout your developer builds, Stripe is quicker to get live and easier to work with. PayPal’s advantage is reach: it drops into almost every no-code shop builder as a button, without any build at all. For a typical UK online shop we’d take card payments through Stripe and add PayPal beside it for customers who ask for it.
Stripe vs PayPal Payouts, Contract Terms and Account Risk
Settlement Speed and Payout Schedule
Stripe’s standard payout time for new UK accounts varies: some accounts wait seven calendar days, others three working days, and stripe.com/gb/payouts gives the current default. Stripe Instant Payouts cost 1%, with a 40p minimum, and arrive in about 30 minutes over Faster Payments, at any hour and on bank holidays. If your weekend takings have just landed and your supplier expects payment on Monday, that 1% is worth paying (stripe.com/gb/pricing, 5 October 2026).
PayPal puts the money in your PayPal Business balance as soon as the buyer pays. A standard withdrawal to a UK bank is free when no currency is converted and usually arrives within a couple of working days.
New sellers need to plan for one PayPal rule: its standard policy holds funds on new accounts for 21 days. If you launched last month, your first £8,000 of sales could be sitting in PayPal while a supplier who invoices on 30-day terms waits to be paid from your bank account. PayPal can release the money sooner when you add tracking and the buyer confirms delivery, so build both into your dispatch from the first order (paypal.com/uk help centre).
After 90 days on PayPal, with £9,000 of annual sales, you can apply for PayPal Working Capital: an advance of £1,000 to £200,000, or up to £300,000 for repeat borrowers, priced on your PayPal sales history. You repay a fixed share of future PayPal sales, with a single fixed fee and no interest (paypal.com/uk/business/financial-services/working-capital).
Stripe Capital is available to UK merchants, but not on application: Stripe offers it to selected businesses based on their payment volume and history on Stripe, and an offer either appears in the dashboard or it doesn’t. The fee and the repayment rate are set against the amount you accept (stripe.com, checked 5 October 2026).
Contract Length and Exit Terms
Both are pay-as-you-go, with no minimum term, no early-exit fee and no annual rate review, and you leave by closing the account in the dashboard. If you’ve spent three years paying a traditional acquirer’s PCI fees, that is a welcome change (stripe.com/gb/pricing and paypal.com/uk/business/paypal-business-fees).
Both keep your transaction history after you close, for compliance, and GDPR data portability rights apply to your customer data. If you’re planning a move and need your past transactions, check the export terms in each provider’s T&Cs before you close the account.
Reserves, Holds and Account Stability
PayPal’s 21-day hold on new sellers is written policy, not bad luck. Beyond that, holds tend to follow a sudden jump in sales, such as a post that goes viral overnight, a move towards higher-risk goods like tickets, gift cards, electronics, CBD or adult products, a rise in disputes, or account details PayPal can’t verify.
PayPal’s disputes process favours the buyer, so in a borderline case you should expect to lose. If your business produces awkward disputes, such as custom orders, late deliveries or resold tickets, you’ll lose more of them on PayPal than with an acquirer that isn’t built around buyer protection (PayPal UK Acceptable Use Policy).
Stripe isn’t immune either. Its Trustpilot complaints describe accounts closed without explanation, funds withheld, and little support to sort it out, with some reviewers reporting money held for 90 days or more (uk.trustpilot.com/review/stripe.com). Stripe’s freezes are harder to predict than PayPal’s new-seller hold, and when they happen there’s no phone number to ring.
For higher-risk trades such as adult content, gambling-related products or supplements, neither is the right processor; a specialist acquirer will take that risk on. For everyone else, keep a second way to take payments ready, so one frozen account doesn’t stop your sales.
Stripe vs PayPal Customer Reviews and Reputation
Trustpilot and Independent Review Themes
Both score poorly on UK Trustpilot, in the 1 to 2 out of 5 range across thousands of reviews. The exact scores move, but the complaints about each have stayed much the same.
PayPal’s cluster around restricted accounts and held funds, the struggle to get frozen money released, slow disputes and poor support once an account is limited. Its praise is for buyer protection and a name people know, which tells you the reviews come mostly from merchants who’ve been caught out and buyers who got their money back.
Stripe’s complaints take a different shape: accounts closed suddenly with little explanation, template replies that don’t resolve anything, and money withheld while a closure is reviewed. Its praise is for easy integration and low fees, so it scores well with developers and badly with business owners whose accounts have been frozen.
Support Channels and Response Times
PayPal has phone support from 8am to 6:30pm, seven days a week, alongside messaging and a chatbot. You reach the phone option through its Contact Us page or the app once you’ve chosen your issue (paypal.com/uk/cshelp, 6 October 2026). If you wake up to a frozen account on a Saturday, being able to speak to someone is worth a lot.
Stripe’s main channels are chat in the dashboard, with a person in about three minutes, and email, answered in about 24 hours. Phone support is by callback from the dashboard only; there’s no number you can ring, and merchants report template replies when they ask about an account review (stripe.com/gb/contact).
Reputation Verdict
PayPal is easier to reach. A phone number you can ring is a real way to escalate a problem, and Stripe doesn’t offer one, which matters if a hold is stopping you trading on a Saturday.
Both have low Trustpilot scores driven by holds and freezes. PayPal’s disputes process works against you as the seller, because buyers tend to win. Stripe is more even-handed in disputes, but harder to reach when something goes wrong with your account.
Stripe vs PayPal for Recurring Billing
Recurring billing is where the two differ most. Stripe Billing does far more than anything PayPal offers for subscriptions, and it costs 0.7% of the amount billed on pay-as-you-go, on top of card fees, or £450 a month flat for up to £70,000 of monthly recurring revenue, with 0.67% above that (stripe.com/gb/billing, 5 October 2026).
For that you get plans with free trials and discount codes, billing by usage, part-month charges when a customer upgrades mid-cycle, retries on failed card payments that you can set up yourself, a hosted customer portal, revenue recognition for your accounts and invoices. PayPal doesn’t list a single product that does all of that.
Take a software business billing 500 subscribers £29 a month. On Stripe, with Billing, you pay about £419 a month: £317.50 in card fees and £101.50 for Billing. At PayPal’s standard rate of 2.9% + 30p you pay £570.50, about £1,800 a year more, and you’d still have to build the upgrade and retry logic yourself.
PayPal Subscriptions handles simple recurring payments, with retries and notices when a payment fails, but doesn’t list part-month charges or adjustable retry settings as standard (paypal.com/uk/business/accept-payments/recurring-payments, 6 October 2026). For a flat £15 monthly retainer that never changes, that’s all you need. For anything with tiers, trials or usage, you’ll outgrow it quickly.
Braintree, PayPal’s gateway for developers, offers fuller recurring billing than PayPal Subscriptions, but it’s a separate integration (braintreepayments.com/gb).
So for a subscription business that needs part-month charges, retries or usage billing, we’d choose Stripe Billing. For a sole trader on a fixed monthly retainer, PayPal Subscriptions is quicker to set up and leaves less to manage.
If your UK customers would rather pay by Direct Debit, look at GoCardless. It charges 1% + 20p per Bacs collection, capped at £4, which on a £100 monthly subscription is less than Stripe charges with Billing (gocardless.com/en-gb/pricing).
Downsides of Stripe and PayPal
Downsides of Stripe
Stripe assumes you have someone technical. Without a developer, a sole trader can send Payment Links, but Terminal, Connect and anything custom all need code, so you’ll be limited to the ready-made pieces.
Its account closures can be harsh. Trustpilot complaints describe closures without explanation, funds withheld for 90 days or more and replies that lead nowhere, and Stripe’s terms let it close an account at its discretion, without the contractual protections a traditional acquirer’s agreement gives you.
There’s no phone number to ring. If your checkout breaks at 11pm on Black Friday, you can only request a callback from the dashboard.
And the extras add up. An international card at 3.15% + 20p, plus 2% to convert the currency, plus 0.7% for Billing, plus Radar from 4p a screened payment, can take a UK software business billing customers in the US and Singapore above 5% on those payments. Work out that stacked rate before you commit, not after (stripe.com/gb/pricing and uk.trustpilot.com/review/stripe.com).
Downsides of PayPal
PayPal’s lowest rate covers card payments only. Advanced card payments at 1.2% + 30p need PayPal’s approval and some technical setup, and every customer who still pays from their PayPal account costs 2.9% + 30p. At £10,000 a month in £40 account payments, that’s about £165 a month more than Stripe, and the optional tiered plan narrows the gap only after you ask PayPal to enrol you.
Account holds are the most common complaint. The 21-day hold on new sellers is standard policy, and holds triggered by a jump in sales or a change in what you sell dominate its negative Trustpilot reviews, so your money can sit in PayPal for weeks while your supplier waits.
Selling abroad costs more. The 1.29% EEA surcharge, plus a currency markup of roughly 3% built into the exchange rate, means a UK shop selling to a German customer who pays from a PayPal balance pays around 4.19% + 30p before that markup is counted. If half your customers are in Europe, that adds up to real money (paypal.com/uk/business/paypal-business-fees).
And PayPal sells four overlapping products, Checkout, Complete Payments, Braintree and Point of Sale, each with its own fees and its own setup. Working out which one you need takes longer than it should, where Stripe gives you one API and lets you choose what to switch on (paypal.com/uk/business/paypal-business-fees).
Alternatives to Stripe and PayPal
Mollie is the swap to weigh if most of your card traffic is UK consumer cards. It charges 1.20% + £0.20 on UK domestic consumer cards, against Stripe’s 1.5% + 20p.
On European customers it costs you more. European cards cost 2.90% + £0.20 on Mollie against Stripe’s 2.5% + 20p, and iDEAL is £0.30 on Mollie against £0.25 on Stripe. FCA Payment Institution, FRN 977968. Trustpilot 4.4/5 (checked October 2026) across roughly 12,900 reviews. (Source: mollie.com/gb/pricing and stripe.com/gb/pricing/local-payment-methods.)
GoCardless suits customers who would rather pay by Direct Debit than from a saved card. It charges 1% + 20p per Bacs collection, capped at £4, and is FCA-authorised.
On a £200/month subscription, GoCardless costs you £4 a collection where Stripe Billing costs roughly £3.40 + 0.7%, which is close, but the cap keeps GoCardless flat as your price rises. (Source: gocardless.com/en-gb/pricing.)
Revolut Business charges from 1% + 20p on consumer cards online. Currency exchange is free within your plan’s monthly allowance, then costs 0.6% in market hours. That is competitive with Stripe on cards and cheaper than Stripe’s 2% on FX if you invoice US and EU clients regularly. (Source: Revolut Business fees, Scale plan, effective 6 November 2025.)
Final Verdict: Stripe or PayPal?
UK software business with subscribers: Stripe. Stripe Billing’s part-month charges, usage billing, retries and hosted customer portal have no full PayPal equivalent, and on £29 subscriptions the fee gap is about £1,800 a year for every 500 customers (stripe.com/gb/billing).
UK online shop selling to consumers: Stripe for card payments, with PayPal beside it if your customers ask for it. Keep PayPal if enough of them use it to cover its higher fees; if you can only have one, choose Stripe, which is cheaper on every standard UK card.
UK freelancer or sole trader invoicing clients: PayPal. It’s quick to set up, clients abroad know the name, and you don’t need a developer. A consultancy invoicing US companies can get paid through PayPal without either side opening anything new.
UK marketplace paying out to sellers: Stripe. Connect handles seller checks, split payments, instant payouts to sellers and compliance across countries from one API, and PayPal’s Payouts service covers only the sending of money (stripe.com/connect).
UK business selling heavily into Europe: Stripe. It charges 2.5% + 20p on EEA cards, while PayPal adds a 1.29% surcharge to its 2.9% + 30p standard rate and Mollie charges 2.90% + £0.20 on European cards (stripe.com/gb/pricing, paypal.com/uk/business/paypal-business-fees and mollie.com/gb/pricing).
Frequently Asked Questions
Is Stripe cheaper than PayPal for UK businesses?
On a standard UK card, yes. Stripe’s 1.5% + 20p beats PayPal’s standard 2.9% + 30p at every sale size, and at £10,000 a month in £40 orders Stripe works out about £165 a month cheaper.
PayPal is cheaper in one case: card payments at its 1.2% + 30p rate, through Advanced Credit and Debit Card Payments or from buyers without a PayPal account, on sales over £33.33. Its optional tiered plan, offered on request since 1 October 2026, cuts the standard rate to 2.4% or 2.1% after a month above £4,000 or £8,000, which still leaves a £40 sale dearer than on Stripe (stripe.com/gb/pricing and paypal.com/uk/business/paypal-business-fees, 9 November 2026).
Can I use both Stripe and PayPal together?
Yes. Stripe takes the card payments, with lower fees, a fee shown on every transaction and the subscription tools, and PayPal sits beside it as a second button for customers who want it. The two connect to your checkout separately, and Xero and QuickBooks can reconcile both payout feeds.
Your overall fees rise a little with each sale that goes through PayPal, so watch how many customers use it. If the button brings in enough extra sales to cover that, keep it.
Is Stripe or PayPal better for subscription billing?
Stripe, for anything more complicated than a fixed monthly charge. Stripe Billing, at 0.7% or £450 a month flat, gives you part-month charges, usage billing, adjustable retries, a hosted customer portal and invoices, which would take weeks to build yourself.
PayPal Subscriptions handles simple recurring payments with retries, but doesn’t list part-month charges or usage billing as standard. If you sell a product with tiers and usage, use Stripe Billing (stripe.com/gb/billing and paypal.com/uk recurring payments page, 6 October 2026).
Does Stripe or PayPal place holds on merchant funds?
Both can, in different ways. PayPal holds funds on new sellers for 21 days as standard policy, and holds again on sudden jumps in sales, changes in what you sell or a rise in disputes, so money can sit there for weeks while bills come due.
Stripe freezes are less common but harsher when they happen, with reviewers reporting funds withheld for 90 days or more and no clear way to escalate. Neither gives you the contractual protection of a traditional acquirer, so the safeguard is to keep a second way to take payments (uk.trustpilot.com).
Is PayPal FCA regulated in the UK?
Yes, with a caveat. PayPal UK Ltd is FCA-authorised as an electronic money institution, FRN 994790, since 1 November 2023, when it replaced PayPal (Europe) S.a.r.l. et Cie, S.C.A. after Brexit. It also holds permissions for consumer credit (FRN 996405) and cryptoassets (FRN 1000741) (FCA register, fca.org.uk).
The caveat has narrowed. Since 15 July 2026 the FCA has regulated buy now, pay later credit, and PayPal says Pay in 3 customers can now take a complaint to the Financial Ombudsman Service. PayPal’s UK Working Capital page doesn’t say whether that product is FCA-regulated.
What is PayPal Working Capital vs Stripe Capital?
PayPal Working Capital is a merchant cash advance of £1,000 to £200,000, or up to £300,000 for repeat borrowers, priced on your PayPal sales. You need at least 90 days of PayPal Business activity and £9,000 of annual PayPal sales to qualify, and you repay a fixed share of future PayPal sales, with one fixed fee and no interest.
Stripe Capital is also offered in the UK, but only to businesses Stripe selects. If you qualify, the offer appears in your Stripe Dashboard (paypal.com/uk/business/financial-services/working-capital and stripe.com/gb/capital, 6 October 2026).
How we reviewed Stripe vs PayPal
How we compared them. We read both providers’ pricing, checkout and API documentation, for card and for wallet payments, and worked out the real cost once conversion fees stack up. Pricing weighs heaviest because it compounds on every sale.
Data sources. Every rate, fee and pricing tier came straight from each provider’s own pricing pages, terms and product docs, checked in October 2026, with the FCA register cross-checked for regulatory status.
Update cadence. We re-verify every provider on this page at least monthly, and whenever a provider changes pricing, eligibility, or terms. The verification date on the page reflects the most recent full review. Some links on this page are affiliate links, see our editorial policy.