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Paypal vs. Stripe

Paypal Sucks

Paypal sucks, as everyone knows. It has one benefit for the consumer (those buying with paypal) and that is their dispute resolution, which I've used perhaps ten times and have never lost. Dispute resolution with credit cards and banks is much, much more difficult and harder to win.

For the seller, however, Paypal is horrible. Their rates are higher, their exchange rates typically add on 5%, and they also have fees for transfer to one's bank (in Thailand that is now 50 THB, though it used to be free for transfers over a certain (small) amount.

Stripe - A knight in shining armor

Stripe is the great competitor. It is available in far fewer countries than Paypal, but where it matters such as places like Vietnam, India, and the Philippines, Paypal is still largely unavailable for use. Stripe is avialable in India but only Malaysia and Singapore in terms of Southeast Asia. That said, Stripe has a way to enable those operating in countries without support to be fully functional, and that is by setting up a US corporation and enabling ease of banking setup. This service is called Stripe Atlas, and is in fact so much better than anything Estonia is marketing under their misguided and mischaracterized e-residency, which is neither a residency nor any kind of incorporation or accounting infrastructure (basically a chip on pin ID that works poorly, if at all).

If we look at fees for an organization working out of Thailand (that repatriates funds in Thai Baht), here are some numbers:

Example: 3 transactions of $33 USD/month

Paypal fees

$ 5.25 transaction fees
$ 5.00 currency conversion fee
฿ 50.00 bank transfer fee (~ $ 1.75)

Total: $ 12.00 USD = 12 %

Stripe + Transferwise fees

$ 3.78 transaction fees
$ 0.24 currency conversion fee (mid-market rate)
฿ 69.00 bank transfer fee (~ $ 2.20)

Total: $ 6.22 USD = 6.22 %

Note that the Stripe transactions scale much better as the currency conversion fee is fixed unlike the Paypal currency conversion. In addition, as we see the Stripe fees are lower for any given transaction.

Other reasons Paypal is worse than Stripe

  • Paypal transfer payments take a long time. Of course for no good reason other than that Paypal wants the use of other people's money for longer (4-7 business days in Thailand).
  • Paypal doesn't deal with Transferwise or Payoneer banks, and refuses to send/receive money to them. No good reason here, other than seeing these fintech companies as competition and making their customers suffer for using them.
  • Paypal technical support/customer service is notoriously poor.

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