I did a little number crunching to see how my current Paypal Pro rates compared with the new Shopify Payments via Stripe. I thought you guys might like to see the results.
Shopify Payments Stripe vs Paypal Pro
US transaction fees
Stripe - 2.5 + .30 per transaction
Paypal - 2.2 + .30 per transaction
International transaction fees:
Stripe - 2.5 + .30 per transaction
Paypal - 3.2 + .30 per transaction
Paypal Pro fee $30 per month
Monthly rates comparison based on July Sales:
Paypal Pro cost per month 3% with all fees (116 transactions)
Stripe cost per month 2.7% with all fees (116 transactions)
Monthly rates comparison based on June Sales:
Paypal Pro cost per month 2.86% with all fees (316 transactions)
Stripe cost per month 2.7% with all fees (316 transactions)
So it seems that although it's not much Shopify with Stripe will save me some money even with my low rates from Paypal. This is likely because around 10% or more of my transaction are from foreign customers.
The only things keeping me from going over to the Shopify Stripe setup would be... lack of customer support and security settings. Paypal actually has very good customer support these days and it's easy to get help, when I was with Stripe before they seemed to not care so much. Also this may have changed but I had a ton of fraud from Vietnam and with Paypal it was easy to block where as with stripe they didn't have security options even for CVV mismatches.
One thing that Stripe did better was I never had any odd gateway errors with them. With Paypal I get regular calls from customers that have problems on checkout with strange errors or just simple address mismatches that cause a rejection via paypal but not the bank and then customers have funds held for days, very bad and that never happened with Stripe.
Anyone else doing these comparisons?
I haven't done a comparison before, but I'm really glad I read this. One of my eCom businesses is pretty heavy on foreign sales, a 0.7% might not sounds like much, but it is a definite improvement on my margin!
I also use PayPal Pro and one thing keeping me from switching to Shopify Payments is it can take up to 7 days before you have access to your funds. With PayPal Pro the funds are available immediately.
Patti, that's somewhat true but if you want those fund in your bank account it's still 3 days, and you have to manually go in each day and tell Paypal to transfer things. I like that Stripe just does it even though it is a week.
Christopher. When someone makes a payment through PayPal Pro the funds are available immediately to either transfer to your bank account or you can do as I do and use the PayPal debit card to withdrawal funds from an ATM or just use the card to make purchases, pay bills etc. I never have the funds transferred to my bank account. I either withdraw the funds from the ATM and then deposit or just use the card for purchases. So yes the funds are available right away.
Derek, thanks for the offer but I find regular merchant accounts to be very frustrating and in the end not much better of a rate than things like Paypal if at all.
Patti, good to know that. But for me I want the funds to go to my biz bank account first and then I use my regular biz credit card for purchases which get me points and what not so I have to deal with the few days wait.
Yeah if all you've dealt with is qualified non qualified pricing that would make sense. Always stick with interchange plus pricing. For comparison take a look ecommerce debit sales.
Visa Debit Interchange is 1.6%, + 0.4% BizArmour and your looking at a 2% charge on that card, VS PayPal's 2.9%. If you don't have much in the way of sales volume 0.9% probably isn't a large difference for you. When you factor in those higher transactions fee's of PayPal and Stripe you will effectively save $100 per $10,000 in sales volume. Then your current gateway charge is $30, (guessing you also paid a $99 setup fee), where as we do a flat $10.
The whole point of comparison is to save money, So I'll just be direct and tell you there are much better options than PayPal and Stripe. You just need to ask for the right pricing.
Thanks for the post Christopher, its a pretty great break down of what we hope to be able to provide to our customers moving forward!
Some unique points about Shopify Payments:
-Very simple application process (this simple setup is related to the holding time on rolling deposits)
-Option to get a lower rate is offered rather than on request. This is a key point since it allows a business to grow as they need.
"So I'll just be direct and tell you there are much better options than PayPal and Stripe. You just need to ask for the right pricing."
This is a very fair point Derek, but if I'm not mistaken there is not a way for our merchants to integrate with BizArmour which is a major part of the legwork.
"One thing that Stripe did better was I never had any odd gateway errors with them. With Paypal I get regular calls from customers that have problems on checkout with strange errors or just simple address mismatches that cause a rejection via paypal but not the bank and then customers have funds held for days, very bad and that never happened with Stripe."
This is great feedback. Shopify Payments is delivered via Stripe so you can expect the same uptime/performance delivered to your customers. I also appreciate how you shared the breakdown for International customers. You never know where your customers will come from next so its great to get a standard rate internationally.
Massaad, thanks for the reply and extra info. I love that this is even an option now and I'd encourage all new shop owners to try it out. I can't tell you what a PITA it is to deal with any sort of regular merchant account. They tend to claim they have better rates but when I analyzed my billing from 2 different services they ended up costing the same as Paypal and Stripe if not more. On top of that you have to have a gateway account that is separate from the merchant, the paperwork is insane plus the approval process is truly archaic and annoying.
Hats off to Shopify for integrating Stripe.
One question, I still have a Stripe account even though I haven't used it since I went back to Paypal. If I want to come back and use Shopify Payments do I need a new account? Also can the settings be altered to block whole countries from transactions now? I have to keep Vietnam blocked or I get tons of fraud.
I really like the simple setup, and I've been using it for the last two weeks, but the 7 Day payment schedule is brutal. I need access to my funds immediately. I might switch back to PayPal for this reason alone. Everything else seems great.