VS PayPal

Whether you’re just launching your business or you’re taking it to the next level, one thing is for certain - you’ll need a good payment processing service.

This may seem obvious as without one you’ll have no way of taking money for your goods.

But, there is more to choosing a payment processing service than you might think. Factor in things like fees, plans, and security, and it can soon start getting complicated. VS Paypal

Ask several business owners which payment processing service they use and you’ll likely hear the names and PayPal come up repeatedly.

But which of these is the best? 

Below, we’ll take an in-depth look at the features each of them offers. We’ll lay things out in the simplest terms possible and, in the end, you should have a clearer idea of which payment processing service is best for your needs.

Quick Comparison

The first thing you need to know about and PayPal is that, while they may seem to do the same thing, they are actually two very different services. is a payment gateway. This means that it can be used to connect eCommerce transactions with a payment processor, allowing you to process payments online.

However, it doesn’t actually process the payments. It simply acts as the middleman between the payment card and another payment processing service. 

This may seem like an unnecessary step in transaction processing, but it actually has a few benefits.

To begin with, offers enhanced fraud protection. This keeps both your business and your customers safe while they shop. 

It also offers you the ability to sell online across the world, allowing you to take recurring payments, and provides easy integration with a shopping cart. 

PayPal is a payment processing service. This means that it features both a payment gateway and payment processing.

It’s arguably the most famous of all payment processing services and currently boasts 305 million active accounts, 22 million of which are merchants. 

It also offers a service called ‘PayPal Here’, which provides payment processing for in-person point of sale transactions. 

One of the best things about PayPal (apart from being an all-around payment system) is that it’s incredibly easy to use.

It features everything an eCommerce website needs to safely and securely process payments without any confusing technical jargon. 

However, one thing to note is that PayPal does have a withdrawal limit. This means that it might not be the best option for a business that processes payments totaling more than $10,000 a month. 

The main takeaway from the different features offered by both and PayPal is that PayPal is an all-in-one payment processing service. will be able to recommend a merchant account service, but it doesn’t come with one. 


Now we know the main difference between the two services, let’s look at what plans each has to offer.

PayPal processing


PayPal offers three different service plans:

  • Checkout: This is a supplementary service that you can add to an existing payments page if your website already accepts card payments through another processor. Put simply, it offers your customers the option to check out using PayPal as well as PayPal Credit and Venmo. 
  • Payments Standard: This is the best plan to choose if you don’t already have a payment process in place. Using this plan, PayPal becomes your primary payment processor. You’ll also be able to create a payment button with ease by copying and pasting some code onto your website. Payments Standard is ideal for anybody who wants to customize their payments page but doesn’t have a lot of technical expertise.
  • Payments Pro: Choosing this plan gives you everything you’ll get from Payments Standard along with a virtual terminal and a hosted checkout page. This means that, rather than being redirected to PayPal, your customers can checkout without leaving your website. 

There’s no denying that PayPal offers some of the best payment processing options for an eCommerce business. Each plan allows you to retain the identity of your website but still takes payments safely and securely. 

It’s also a good option for anybody worried about PCI compliance as it essentially takes it out of your hands by redirecting your customers to its own site to make the payment.

Even if you choose the Payments Pro plan which allows you to keep customers on your website while they checkout, you’re offered tools that help make PCI compliance clearer.

Keeping in mind that doesn’t offer a merchant account and, instead, is a payment gateway, here are the three plans on offer:

  • All-In-One: This pairs with a merchant account offered by one of its partners.
  • Payment Gateway Only: This plan is simply an payment gateway without any merchant account recommendations or third-party bundles.
  • Enterprise Solutions: This plant offers high-volume businesses custom pricing in line with their needs.

As you can see, there are fewer services offered by but, again, this is because it is a payment gateway rather than an all-in-one payment processing service like PayPal. 

Merchant Accounts

By now, you’re probably fully aware that doesn’t come with a merchant account included. However, it’s still important that you are aware of how both PayPal and actually process payments. 


PayPal is an aggregator. This means that it groups all of its customers into one single account that is used for payment processing.

It also takes all of its banking and service fees from the transaction before it puts the remaining money into your business account. 

This is known as third-party processing. The advantage of this is that it's faster and easier to use than a traditional merchant account.

Put simply, you’ll have access to your money much sooner.

One of the issues with third-party processing is that they can suffer from stability issues. This means that your account could end up being frozen with little-to-no explanation of what went wrong.

And, if we’re being honest, PayPal’s customer support isn’t the best in the world, making this situation all the more frustrating. 

As doesn’t offer any in-house merchant accounts, this isn’t something that you’ll need to worry about.

Instead, you’ll be referred to one of its partners that can help you find the perfect merchant account for your business needs. 

Fraud Detection

Online payment fraud is something that any eCommerce business should be aware of. But what fraud detection does each service provide?

One of the things that prides itself on is its AFDS service. This stands for ‘Advanced Fraud Detection Suite’.

This consists of 13 filters that you can customize to flag any transactions that you think might be suspicious. 

This service comes at no extra cost and, since chargebacks can be costly, this feature is something that really makes stand out as one of the best payment gateway services.


While PayPal may seem like the perfect all-around payment processing service, it doesn’t offer any features that are comparable to’s AFDS.

It does, however, handle PCI compliance for you by redirecting your customers to the PayPal website to complete their transactions.

Pricing & Fees

As you can see, each service has something different to offer in terms of features. However, no matter how impressive each of them is, there is a price to pay if you want to use them.

So, to really help you work out which you’re able to afford, let’s take a look at their pricing and fees in more detail.


The first thing you need to know about PayPal’s fees is that, since it’s an expandable service, there are lots of optional costs.

However, let’s start by looking at PayPal’s base fees:

  • Online Transactions: 2.9% + $0.30
  • Online Invoices: 2.9% + $0.30
  • POS (PayPal Here) Transactions: 2.7%
  • Keyed Entry Transactions: 3.5% + $0.15

Optionals costs include the following:

  • Non-Profit Discount: 2.2% + $0.30
  • Micropayment Option: 5% + $0.05
  • International Charges: This varies between countries, but has a minimum charge of 4.2%

PayPal also charges an additional $30 per month for the Payments Pro service. However, this does include a hosted payment page and a virtual terminal, so it’s something that’s worth considering if you’re looking for the easiest way to process transactions on your website.

As with PayPal, the pricing and fees of each plan offered by can change depending on what you need. Here are’s base fees:

Payment Gateway Only:

  • $25 per month gateway fee
  • $0.10 transaction processing fee (this is on top of whatever your merchant account provider charges)
  • $0.10 daily batch fee

Payment Gateway & Recommended Merchant Account:

  • $25 per month gateway fee
  • 2.9% + $0.30 processing fee for each transaction also charges a $25 fee for each chargeback and there is a 1.5% charge for international transactions. 


As you can see, both and PayPal are two very different services. But which is best for your business? 

If you already have a merchant account but you need to add eCommerce support, go for This service will also allow you to take recurring payments, and it comes with an enhanced fraud protection service. 

If you’re a low-volume business that processes less than $10,000 per month and you need an all-in-one, easy-to-use payment service, your best bet would be PayPal. 

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