
Effortless scale that keeps payees happy, strengthens tax compliance, and reduces fraud
Launching a business in the UK? Your first big challenge is getting paid. Choosing the right online payment provider is vital, and in this article, we compare two leaders: Stripe and PayPal.
We’ll show you key differences, rates, features, and UK-specific capabilities. Armed with these insights, you can confidently select the solution that best fits your business needs and gets the money flowing quickly.
What is Stripe?
Founded in 2011, Stripe is a global online payment platform popular with UK businesses and developers. The system offers a wide range of customisable development tools through its application programming interfaces (APIs) and software development kits (SDKs).
Stripe also offers ‘out-of-the-box’ solutions like Stripe Checkout, and integrations with platforms like Shopify or WooCommerce. These systems don’t require deep coding knowledge, which makes them easily accessible to UK businesses of various sizes. Furthermore, Stripe offers strong support for recurring payments and BACS Direct Debit.
What is PayPal?
PayPal, founded in 1998, is a globally recognised brand with broad UK adoption.
PayPal is also an all-in-one payment gateway and processor. You can use it to manage your entire online payment processing or offer it as an additional, trusted payment method.
PayPal also owns Zettle (formerly iZettle), a popular point-of-sale (POS) solution for in-person payments used by UK small businesses. From freelancers to SMBs and large enterprises, UK companies of all sizes frequently use the payment platform for global transactions.
Key Features Comparison: Stripe vs. PayPal for the UK
Before we go deeper, here’s a quick comparison tailored for the UK market:
Service | Stripe (UK) | PayPal (UK) |
---|---|---|
Standard Online Card Fees | Typically 1.5% + 20p for standard UK cards; 1.9% + 20p for premium UK cards; 2.5% + 20p for EEA cards; 3.25% + 20p for other international cards (via Stripe Checkout/Elements) | Often 1.2% + 30p to 2.9% + 30p for UK commercial transactions (e.g., standard card payments often at the higher end, QR code/alternative methods may be lower) |
International Fee Add-on | Included in rates above (e.g., 2.5% or 3.25% covers card scheme and conversion) | Separate International Transaction Fees often apply (e.g., 1.29% for EEA, 1.99% elsewhere) |
Chargeback/Dispute Fee | £20 per dispute (refundable if won) | Typically £14 (Standard), check current terms |
Micropayment Fees | Standard rates usually apply unless a specific agreement is negotiated | Yes, specific rates for transactions under £5 (e.g., 5% + fixed fee domestic) |
Key Payment Methods | Major credit/debit cards, Apple Pay, Google Pay, BACS Direct Debit, Klarna, Clearpay, Link (one-click) | Major credit/debit cards, PayPal balance, Pay in 3 (BNPL), Bank Transfer (via PayPal), Apple Pay, Google Pay (via Braintree/integrations) |
Currency Conversion Fee | Typically adds 2% to base exchange rate for payouts | Often adds 3% or more to the base exchange rate for currency conversion |
Security and Compliance | PCI DSS Level 1, SCA compliant, Stripe Radar (optional add-on fee), FCA regulated | PCI DSS Level 1, SCA compliant flows, Fraud Protection tools, FCA regulated |
UK Point of Sale (POS) | Yes, Stripe Terminal | Yes, Zettle by PayPal |
Availability | 47 countries, 135+ currencies | 200+ countries, 25 currencies |
UK Customer Support | 24/7 phone, chat, email, knowledge base | Phone, email, message centre, knowledge base, community forum |
FCA Authorisation | Yes (EMI, Stripe Payments UK Limited) | Yes (EMI, PayPal UK Ltd) |
Note: Fees and product features (sourced from the provider’s website in May 2025) are subject to change. Always check the provider’s official UK website for the latest figures for PayPal (consumer/merchant) fees and Stripe UK fees.
PayPal or Stripe: Who Wins?
Both platforms offer robust features, but each caters slightly differently to UK businesses. Let’s explore nine key areas:
1. Fees and Pricing
Understanding the cost is crucial. Both use a pay-as-you-go model for standard online transactions, but the UK rates and structures differ:
Transaction Fees
- Stripe: Charges different rates based on the card origin. Standard UK cards might be 1.5% + 20p, rising for European (EEA) cards (e.g., 2.5% + 20p) and other international cards (e.g., 3.25% + 20p).
Using Stripe Link (their accelerated checkout) can sometimes offer lower rates for UK cards (e.g., 1.2% + 20p). BACS Direct Debit has its own pricing (e.g., 1% + 20p, capped). Always verify current rates on Stripe’s UK pricing page. - PayPal: UK pricing is more varied. Standard online card payments might be 2.9% + 30p, but QR code payments are lower (e.g., 1.5% + fixed fee over £10). Alternative Payment Methods (APMs) have different rates (e.g., 1.2% + 30p).
Check PayPal’s specific UK merchant fee pages for the transaction type you anticipate.
International Fees
- Stripe: International card fees are higher, but generally bundle the cross-border and currency aspects into that rate (e.g., 3.25% + 20p).
However, converting payouts to GBP adds a currency conversion fee (typically 2%). - PayPal: Often adds separate percentage fees for receiving international payments (e.g., 1.29% from EEA, 1.99% elsewhere) on top of the base transaction fee.
Its currency conversion fee for payouts is often higher than Stripe’s (potentially 3% or more). This can significantly impact costs if you have many non-UK customers.

PayPal and Stripe UK fee comparison
Micropayments
For small transactions (under £5), PayPal offers specific lower rates (5% + fixed fee domestic), which can be beneficial. Stripe generally applies standard rates unless a high volume warrants negotiation.
Chargeback Fees
When a customer disputes a charge with their bank, Stripe charges a £20 dispute fee in the UK (refundable if you win the dispute). PayPal’s fee is typically £14.
Other Fees
Be aware of potential monthly fees for advanced services (like PayPal Payments Pro for a fully customised checkout) or optional add-ons (like Stripe Radar for advanced fraud protection, which may have a per-transaction fee, such as 4p per screened transaction).
WINNER: Depends
It’s close and highly dependant on your specific sales patterns. Stripe’s tiered pricing is often more cost-effective for standard UK/EEA card volume. PayPal might be better for small payments or specific scenarios like QR codes.
PayPal’s international and currency conversion fees are significant for businesses selling globally. Carefully model your expected transactions against each provider’s current UK fee schedule.
Looking beyond Stripe vs PayPal for your UK business?
If you’re also managing outbound payments to contractors, freelancers, or global partners, automate the entire payables process with Tipalti—compliance, tax, and FX included.
2. Accepted Payment Methods
Offering customers their preferred way to pay is vital for conversion.
- PayPal: accepts major credit/debit cards, PayPal balance, ‘Pay in 3’ Buy Now, Pay Later (BNPL), and bank transfers. UK consumers highly trust it.
While some countries can use crypto, this is generally not a direct payment method for UK merchants at checkout. Apple Pay and Google Pay are often processed via PayPal integrations (like Braintree, owned by PayPal). - Stripe: accepts all major credit/debit cards, digital wallets like Apple Pay and Google Pay, and BACS Direct Debit (essential for UK recurring payments/subscriptions).
Stripe also readily integrates with popular UK BNPL providers like Klarna and Clearpay (Afterpay). Its ‘Link’ feature offers a secure one-click checkout for returning customers.

PayPal and Stripe UK payment method comparison
WINNER: Stripe — for merchant flexibility
While the PayPal button conjures immense consumer trust, Stripe gives UK businesses more direct access to essential methods like BACS Direct Debit and easy integration with leading third-party BNPL options like Klarna. Offering card payments via Stripe and the PayPal button as a checkout option is a common strategy to maximise choice.
3. Security and Compliance
Handling sensitive payment data requires robust security. Stripe and PayPal meet the highest industry standards for card data security and PCI DSS Level 1 compliance.
Both brands help businesses comply with Strong Customer Authentication requirements in the UK and Europe under PSD2. This mandates multi-factor authentication, like 3D Secure, for many online payments to reduce fraud. Stripe and PayPal have built-in mechanisms to trigger multi-factor authentication when needed.
Stripe also offers an advanced fraud detection tool called Stripe Radar, which uses machine learning (ML). This is an optional add-on service with UK-specific fees.
The Financial Conduct Authority (FCA) in the UK regulates Stripe (Stripe Payments UK Limited as an Electronic Money Institution—FRN: 900461) and PayPal (PayPal UK Ltd as an Electronic Money Institution—FRN: 994790).
WINNER: Tie
Both offer excellent security features for meeting the UK’s regulatory compliance standards. Stripe’s optional Radar provides an extra layer for businesses wanting advanced fraud tooling, potentially giving it a slight edge.
4. International Transactions
If you sell outside the UK, consider the global reach and costs of each platform.
PayPal is available in over 200 countries and supports around 25 currencies. This global influence is a major advantage if you must operate in different countries.
Stripe is directly available for businesses based in 47 countries, but can process payments in over 135 currencies. This wider currency support is helpful if you sell to global customers.
A key consideration is currency conversion fees. As mentioned earlier, Stripe’s typical 2% fee for converting foreign earnings to British pounds is often lower than PayPal’s rate, which can be 3% or more. This difference significantly impacts your bottom line when there are substantial international sales.
WINNER: Tie
PayPal allows you to set up shop in more countries. Stripe lets you accept payments in more currencies from your UK base. If international sales are significant, critically evaluate the currency conversion fees charged by both platforms when deciding.
5. Integrations
Connecting your payment provider to other business tools is essential.
Stripe is known for its extensive library of integrations (APIs) and compatibility with hundreds of third-party apps. These include popular UK accounting software like Xero, Sage, QuickBooks UK, and FreeAgent.
Stripe also connects with CRM systems like HubSpot and platforms like Slack. Its developer-oriented focus makes deep custom integrations easier.
PayPal also offers various integrations, especially with major e-commerce platforms like Shopify, WooCommerce, BigCommerce, and Wix. It also connects with UK accounting software.
WINNER: Stripe
While PayPal covers the essentials, Stripe generally offers more integrations and a more flexible API for customised connections. This is particularly valuable for tech-savvy businesses or those with unique workflow needs.
6. Ease of Use and Onboarding
PayPal is widely regarded as offering a user-friendly setup. Adding a PayPal button to a UK website or e-commerce platform is typically straightforward and requires minimal technical skill. The UK onboarding process with PayPal is usually quick.
The basic setup of Stripe using pre-built tools like Stripe Checkout or platform integrations is also relatively simple. However, unlocking Stripe’s full potential through its APIs for custom services requires coding skills or developer access.
The onboarding process for a UK business with Stripe is also streamlined, but depending on the business type, it might involve slightly more verification steps.
WINNER: PayPal
PayPal – for ultimate simplicity. For businesses wanting the absolute quickest, most straightforward setup with no technical hurdles, PayPal often wins. However, don’t overestimate the difficulty of Stripe’s basic implementations.
7. Customer Support
Getting help when needed is vital for any payment provider.
Stripe offers 24/7 support via phone, live chat, and email, plus extensive online documentation in its knowledge base. However, the quality and accessibility of 24/7 support, specifically for UK hours, should be verified based on recent user experiences.
PayPal offers support via phone (UK businesses should check specific UK operating hours, as it’s often not 24/7), email/message centre, a detailed knowledge base, and active community forums.
WINNER: Stripe
Stripe – for 24/7 options. Stripe’s round-the-clock phone and chat support is appealing, especially if issues arise outside standard UK business hours. However, please verify PayPal’s current UK support availability.
8. Point of Sale (POS) Solutions in the UK
Stripe and PayPal offer integrated solutions for businesses with both online and physical (“brick-and-mortar”) locations.
PayPal owns Zettle by PayPal, a dominant player in the UK SME market for card readers and point-of-sale software. It’s known for being easy to use and having simple pricing for in-person transactions.
Stripe offers Stripe Terminal, which provides seamless integration of card readers with the online platform. This allows for unified reporting and management across online and offline sales. Hardware costs and specific UK transaction fees apply to Stripe Terminal.
WINNER: Tie
Tie: It depends on the existing ecosystem. Zettle (PayPal) is arguably the more established and recognised standalone POS solution for many small UK retail/hospitality businesses. Stripe Terminal is excellent for companies wanting a deeply integrated online and offline payment system under one roof.
9. Payout Speed to UK Bank Accounts
The speed at which a business can access money is an important consideration.
With Stripe, standard payouts to a UK bank account typically take a few business days (for example, 3-7 days initially, often shortening over time). Instant Payouts may be available for an additional fee (such as 1%).
With PayPal, funds arrive in your account almost instantly once a payment is made. Withdrawing those funds from PayPal to your UK bank account can take anywhere from seconds to a few business days, depending on the bank and time of withdrawal. Instant transfers sometimes incur a fee.
WINNER: PayPal
PayPal—for initial funds availability. Funds tend to appear in your PayPal balance quicker, but the total time to reach your actual UK bank account is often comparable for both, unless you pay extra for instant options.
When to Choose PayPal or Stripe for Your UK Business
The best choice for your UK business depends on specific needs, technical expertise, sales patterns, and growth stage.
Criteria | Choose PayPal if… | Choose Stripe if… |
---|---|---|
Ease of Setup | You want the simplest setup with maximum brand recognition and customer trust. | You want full control and customisation of the checkout experience. |
Business Size | You’re a small business or sole trader needing a quick and easy solution. | You require advanced features suited to scaling or enterprise-grade operations. |
Micropayments | You handle very low-value transactions and benefit from micropayment pricing. | Not specifically optimised for micropayments. |
POS Solutions | You need a leading standalone POS option (e.g., Zettle) for in-person transactions. | You want a unified solution for online and offline (Stripe Terminal). |
Customer Preferences | Many of your customers prefer to pay directly with PayPal accounts. | You’re focused on offering flexible, modern payment methods like BNPL. |
Recurring Payments (UK) | Limited BACS Direct Debit options. | You need to accept BACS Direct Debit for recurring UK payments. |
BNPL Integration | More limited options for BNPL providers. | Seamless integration with Klarna, Clearpay, etc. |
International Sales | Standard international support, but higher currency conversion fees. | Significant savings on currency conversion for global transactions. |
Developer Tools | Less developer-centric; more plug-and-play. | Advanced developer tools and flexibility for complex integrations. |
Processing Fees | Competitive for some transactions, but higher for standard cards. | Lower standard UK/EEA card processing fees. |
Can You Use Both Stripe and PayPal?
Yes, many UK businesses use both. A common strategy is to use Stripe as the primary processor for card payments (often integrated directly into the website for a seamless checkout) and offer PayPal as a separate button option. This gives customers a choice: pay directly by card via Stripe or log in to their trusted PayPal account.
However, managing two providers means two accounts, two sets of reports, and potentially two different fee structures to track. This adds complexity, so consider if the benefit of offering maximum choice outweighs the administrative overhead.
Focus on the features, fees, and payment methods your UK business needs most in the long run, not just right now. Furthermore, consider your future growth plans. Always check a provider’s official UK website for the most current fee structures and terms before making the most informed decision.
Beyond Pay-Ins: Automate Your Contractor Payments with Tipalti
While Stripe and PayPal excel at helping your UK business accept payments from customers (pay-ins), another crucial aspect of financial operations is managing and automating the payments your business makes (payouts to suppliers, partners, freelancers, affiliates, and more—especially at scale and across borders.
This is where a platform like Tipalti comes in. Tipalti serves a different, typically larger-scale business need compared to the primary function of Stripe or PayPal for customer checkouts. It’s an end-to-end accounts payable (AP) and global payments automation solution for SMBs and large UK businesses looking to streamline their outgoing payment workflow.
Key features of Tipalti that aid in UK business growth include:
- Global mass payouts: efficiently pay suppliers/partners worldwide in multiple currencies via various payment methods (e.g., UK Faster Payments, SEPA, international bank transfers, PayPal).
- Supplier management automation streamlines onboarding, collects and validates bank details and tax forms (like W-8/W-9 for international payees, helping manage compliance), and reduces manual effort and errors.
- Tax compliance: automates the collection of VAT numbers and provides in-depth reporting to help UK businesses manage compliance obligations, including aspects related to UK VAT for supplier invoices.
- Invoice processing automation: technology like OCR and AI to capture and process supplier invoices, manage approvals, and match them to purchase orders.
- Seamless integration: connects with ERP systems (like NetSuite and Sage Intacct) and accounting software common in the UK market, ensuring data synchronisation.
- UK presence and support: operates within the UK regulatory framework (FCA authorised) and offers local support.
Tipalti is a favourable option for high-growth UK businesses aiming to automate the global payables process, significantly reduce manual workload, strengthen financial controls, enhance fraud prevention, and ensure tax and regulatory compliance (particularly when dealing with a high volume of domestic and international suppliers).
Pricing starts at £99 for a Starter Plan with AP features. Additional functions, like mass payments, are typically quote-based and tailored to a company’s specific needs and volume requirements.
Curious How Tipalti Adds Value to Your Growing UK Business?
Stripe and PayPal both enable easy online payments for UK businesses. PayPal offers simplicity and consumer trust. Stripe provides more customisation and often better rates.
However, if your business needs to manage global payees, automate tax compliance, and streamline mass payouts with enterprise-grade security, Tipalti stands out as a comprehensive solution built to last.
If your business is scaling and needs to automate beyond customer payments to manage supplier invoices and financial controls with precision, then explore Tipalti to see how one powerful payables solution can transform your entire end-to-end financial operation.
Book a demo with Tipalti to understand how the platform’s fee structure delivers significant ROI for AP automation and global payouts.
Frequently Asked Questions (FAQs)
What are the main differences in fees between Stripe and PayPal for UK businesses?
It depends. PayPal is available in more countries for setup. Stripe processes more currencies from a UK base and often has lower currency conversion fees for payouts to GBP.
Can I use Stripe and PayPal together on my UK website?
Yes, many UK businesses integrate Stripe as their primary card processor into their checkout flow and offer PayPal as an additional payment option via a separate button or link.
When should I consider an alternative to PayPal or Stripe for my business?
As your business grows and you face increasing complexity in managing high volumes of supplier invoices, making frequent domestic or international payments via methods like BACS and Faster Payments, and handling tax compliance across multiple entities, it’s a wise move to evaluate options like Tipalti.
How does Tipalti complement Stripe or PayPal for a growing UK business?
Stripe and PayPal simplify collecting customer payments, but can become limited as a business scales and needs to make larger volumes of domestic and international supplier payouts.
Tipalti automates the entire supplier payments process — from onboarding to approvals to reconciling global payments via any method. As your business grows, this substantially reduces AP workload while enhancing financial controls, cash management, and regulatory compliance.
Note: This text is based on information as of May 2025, may not be up-to-date when reading, and is subject to change. PayPal and Stripe fees and features are subject to change and updated periodically. For the most current and accurate information, always consult the official PayPal UK fee pages (consumer/merchant) and the Stripe fee page directly on the provider’s websites.