For most UK small businesses selling online, Stripe is the cheaper and more flexible way to take card payments, and PayPal is the quicker, more familiar option that some customers still look for at checkout. The best answer is often both: Stripe as your main card processor, PayPal as an extra button. If you sell face to face, the decision is different, and we cover SumUp and Zettle further down.
We build and maintain small business websites, so we see this choice from the practical side. It is rarely a pure fees question. It is about how your site is built, who has to set it up, what happens when a customer disputes a payment, and whether your accounts stay tidy at the end of the month.
TL;DR
- Stripe’s standard UK card rate is 1.5% + 20p for standard UK cards; PayPal’s standard checkout fee is 2.9%, so Stripe is usually cheaper per card sale.
- PayPal wins on instant familiarity and quick setup. Stripe wins on control, subscriptions and a checkout that looks like your own.
- Many UK businesses run Stripe for cards and add PayPal as a second option rather than choosing one.
- For in-person sales, SumUp and Zettle (now PayPal POS) are close on price; the right one depends on hardware cost, payouts and what else you use.
- Keep your payment records clean and separate from personal money, and ask your accountant before you wire anything into your bookkeeping.
Table of Contents
- What Stripe and PayPal actually are
- Stripe vs PayPal fees in the UK
- Setup and ease of use
- Which one suits which business
- Taking payments in person: SumUp vs Zettle
- Can HMRC see your Stripe or PayPal payments?
- Our perspective
- Where we can help
- A simple way to decide
- FAQ
- Sources
What Stripe and PayPal actually are
They overlap, but they started from different places.
Stripe describes itself as programmable financial infrastructure for accepting online and in-person payments, managing revenue and preventing fraud. In plain English: it is the plumbing behind your checkout. Your customer types a card number into a form that looks like part of your site, and Stripe handles the rest. It is built to be configured, which is why developers like it and why it scales from a one-person shop to a large company.
PayPal is a wallet first. Customers have an account with a saved card or bank, they click the PayPal button, log in and pay. That familiarity is the whole appeal. Plenty of buyers will happily pay through PayPal who would hesitate to type a card number into a site they have never heard of.
One comparison for UK businesses puts it neatly: Stripe offers more customisation and developer-friendly integration, while PayPal offers brand trust and simpler out-of-the-box setup. That matches what we see on client projects.
Stripe vs PayPal fees in the UK
Fees are what most people search for, so here they are from the providers’ own pricing pages.
| Stripe | PayPal | |
|---|---|---|
| Standard UK cards | 1.5% + 20p | 2.9% for PayPal checkout (plus a fixed fee) |
| Premium UK cards | 2.8% + 20p | Same checkout rate |
| International cards | 2.5% + 20p | Check the fee page for cross-border rates |
| Premium international cards | 3.15% + 20p | n/a |
| QR code payments | n/a | 1.2% |
| In-person POS | Separate Stripe terminal pricing | 1.75% |
The Stripe figures come from Stripe’s UK pricing page. The PayPal figures come from PayPal’s UK business fees page.
A worked example
Say you sell a £100 product to a customer with a standard UK card.
- Stripe takes 1.5% plus 20p: £1.70.
- PayPal checkout takes 2.9%, which is £2.90 before its fixed per-transaction fee is added on top.
On one sale that is small. On 200 sales a month at that value, you are looking at a gap of at least £240 a month before fixed fees. That is more than a lot of small businesses pay for their website hosting and maintenance combined.
What the headline rate does not tell you
The percentage is only part of the cost. Before you commit, look at:
- Card mix. Premium cards and international cards cost more on Stripe. If a large share of your customers are overseas, your blended rate rises.
- Fixed fees. The 20p or 30p on each transaction hurts most on low-value sales. If you sell £3 items, a fixed fee is a big slice.
- Disputes. Stripe offers optional dispute prevention tools, including AI-powered Smart Disputes, which charge 30% of the disputed amount on cases that are won. It is optional, but know it exists before you switch it on.
- Refunds. Check how each provider treats fees when you refund. Do it before you launch, not after your first awkward customer.
- Monthly fees. Stripe and PayPal’s point of sale have no monthly fee, so you pay as you sell.
Fees and tiers change. Treat any table in any article, ours included, as a prompt to check the live pricing pages before you decide.
Setup and ease of use
PayPal is quicker to get going. If you run a simple shop or take the odd invoice payment, you can have a button live in an afternoon. There is little to configure and customers know what they are looking at.
Stripe takes a bit more thought, but not as much as people fear. On a WordPress or hosted shop platform, connecting Stripe is usually a matter of installing a plugin and pasting in keys. The real work comes when you want something custom: subscriptions, deposits, payment plans, a checkout that matches your brand, or payments inside a bespoke web app. That is where Stripe earns its keep.
If you are building a WordPress shop, our guide to WordPress payment gateway options for online stores goes through what plugs in where.
Which one suits which business
Here is how we would think about it, using the pattern most comparisons agree on: Stripe for customisable checkouts, subscriptions and more control; PayPal for quick setup and a familiar option.
Stripe is usually the better main processor if you:
- sell subscriptions, memberships or retainers online
- want a checkout that sits on your own page and looks like your brand
- take a lot of card payments and care about the per-sale cost
- have, or plan to have, a custom site or web application
PayPal is usually the better fit if you:
- sell occasionally, or at very low volume
- want to be live today with almost no setup
- sell to customers who like paying from a wallet they already trust
- need a simple way to send invoices
Both together is often the sweet spot. One UK comparison notes that many businesses use Stripe as their main card processor and offer PayPal as an extra checkout option. Shoppers who want PayPal can use it, and everyone else pays by card at the lower rate.
Does offering PayPal help conversions?
Often, yes, because every extra step or doubt at checkout costs you sales. A recognisable payment option removes some doubt. But checkout is only one part of the picture. Page speed, clear buttons and honest delivery information matter as much. If you want to look at those, see our pieces on conversion-focused design tactics and checkout and call-to-action examples for UK small businesses.
Taking payments in person: SumUp vs Zettle
People searching Stripe vs PayPal often also wonder about card readers, so here is the short version for market traders, salons, cafes and anyone taking payments on the move.
Zettle is now branded PayPal POS. It charges 1.75% for card payments and eligible QR codes, and 2.5% for eligible invoices and payment links. Some of those extras are limited: QR codes and invoices are restricted to sellers who joined before 8 May 2023, and payment links are temporarily unavailable to new sellers. Check the page for what you can actually use today.
SumUp lists a pay-as-you-go plan at 1.69% with no monthly cost, or a Payments Plus plan at 0.99% with a £19 monthly subscription. Its own comparison puts SumUp’s hardware from £25 and Zettle’s from £29, with both contract-free, and notes SumUp’s next-day 7am payouts and free business account. That comparison is written by SumUp, so look at each provider’s own hardware page for the current price before you buy.
| SumUp | Zettle (PayPal POS) | |
|---|---|---|
| Standard in-person rate | 1.69% | 1.75% |
| Lower-rate option | 0.99% with £19 a month Payments Plus | None listed |
| Hardware from | £25 | £29 |
| Contract | None | None |
| Payout style | Next day, 7am | Available in your balance within minutes |
How to choose between them
- Take under about £1,900 a month in person? The £19 subscription tier on SumUp is unlikely to pay back on its own, since the saving over 1.69% is 0.7 percentage points. Work out your own break-even: £19 divided by 0.007 is roughly £2,700 of monthly card sales.
- Already use PayPal for online sales? Zettle’s link to your PayPal balance can make money easier to see in one place.
- Want a business account alongside the reader? SumUp bundles one.
- Need stock and sales reports? Zettle offers an integrated point-of-sale system for products, inventory and sales reports.
That break-even maths is ours, based on the two published rates. Your own sales volume is what decides it.
Can HMRC see your Stripe or PayPal payments?
A common worry, and one to answer carefully. Your income is taxable however it reaches you, whether it lands via Stripe, PayPal, SumUp, Zettle or a bank transfer, so you should record it all.
What we can point to: the government’s call for evidence on business systems integration says the integrations it is exploring move sales and purchase data between businesses’ own systems, and that those integrations do not share data with HMRC. It also describes how linking systems could automatically post sales, refunds and platform fees to the correct ledger. That is a call for evidence, not a rule, so do not read it as a statement of what HMRC can or cannot access. For your own situation, ask your accountant.
What helps in practice:
- Keep takings separate. Sole traders can legally use a personal account, but a dedicated business account keeps takings and expenses clean for tax reporting.
- Compare the effective rate you pay, including fixed fees and refunds, rather than the headline percentage.
- Check settlement timing, because cash flow matters when a supplier invoice lands on a Monday.
- Download monthly statements from every provider and keep them with your books.
Our perspective
We have lost count of the businesses that picked a payment provider the way you pick a takeaway: whichever was on the first page. Then six months later the owner is pulling their hair out because the checkout looks off-brand, the subscription logic does not work, or the fees do not match what they expected.
Our view is simple. Do not choose on the headline rate alone. Choose on what you actually sell and how you want customers to feel at the moment they pay. A plumber taking deposits, a boutique selling online, and a training company running monthly memberships are three different problems.
We usually start with Stripe for cards, because the cost is lower and it grows with you. Then we add PayPal when customers ask for it or when the sales data shows people abandoning at checkout. We would rather you started small and changed later than overbuilt on day one.
One more thing we say a lot: a payment button is only as good as the page around it. If the site is slow, confusing on a phone, or hides delivery costs until the last step, no processor will fix that. Payments, enquiries and follow-up should work as one flow, which is why we put so much effort into mobile-first design and keeping your lead management in one place.
— Chris
Where we can help
If you want Stripe or PayPal wired into a site that is fast, mobile-first and easy to update, our web design packages start at £120 per month on Starter, with Growth at £170 per month and Smart at £560 per month. We are a Derbyshire team, so you can talk to a real person, in person if that helps.
Once the site is live, our WordPress maintenance at £30 per month per site keeps plugins, including payment plugins, updated and working. If you also want enquiries from WhatsApp and email in one place, our CRM plans start at £130 per month on Silver.
A simple way to decide
- Write down what you sell. One-off products, subscriptions, deposits, in-person services?
- Estimate monthly card sales and your average order value. Small baskets make fixed fees matter more.
- Check your customer mix. Lots of overseas buyers push up your blended card cost.
- Pick your main processor. For most online sellers that is Stripe.
- Decide on a second option. Add PayPal if your customers ask for it or abandon at checkout.
- Sort the in-person side separately if you take payments face to face, comparing SumUp and Zettle on your own volume.
- Tell your accountant which providers you use before the year-end, not after.
FAQ
Which is better for business, Stripe or PayPal?
For most UK online sellers, Stripe is the better main processor because its standard UK card rate of 1.5% + 20p is lower than PayPal’s 2.9% checkout fee, and it offers more control over the checkout. PayPal is better if you want to be up and running fast or your customers like paying from a wallet. Offering both is common.
Is Stripe cheaper than PayPal in the UK?
On standard UK cards, yes. Stripe charges 1.5% + 20p, against PayPal’s 2.9% for checkout. Premium and international cards cost more on Stripe, so work out your own mix before assuming the gap.
Is SumUp or Zettle better for a small shop or market stall?
The two are close. SumUp charges 1.69% and Zettle (now PayPal POS) 1.75%, and both are contract-free. SumUp can drop to 0.99% on a £19 monthly plan, which only pays off at higher volumes, so choose on your sales level, hardware cost and payout preferences.
Can HMRC see Stripe payments?
You should report all income whichever provider it passes through. Government proposals on linking business systems say those integrations would not share data with HMRC, but that is only a call for evidence, so ask your accountant what applies to you and keep full records.
Sources
- Stripe UK pricing and fees
- PayPal UK business fees
- Stripe products and features
- Stripe Payments vs PayPal: comparison for UK businesses
- Stripe vs PayPal: UK business payment comparison
- PayPal POS (Zettle) UK
- Zettle pricing and fees
- SumUp UK
- Best online payment systems in the UK, SumUp comparison
- Business systems integration call for evidence, GOV.UK
- How to accept payments as a sole trader in the UK
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