PayPal vs. Stripe vs. Authorize.Net

In the subscription and SaaS billing, recurring payment processing requires the integration of the robust payment processing services providers that can accommodate max. customers from across the regions and supports several payment methods, currencies, and businesses.

Today, as many as 27 payment gateways or payment processing services providers are facilitating online payment processing as digital wallets.

Some gateways work as payment processors, and some of them also provide access and accretion of the funds through the merchant accounts not associated with banks.

Some of the key payment gateways include PayPal, Stripe, Authorize.Net, Braintree, GoCardless, 2Checkout, WePay, and many more.

Online Recurring Payment Processing Through the Payment Gateways

These digital payment gateways play the most important role in providing enhanced customer experience at checkout and contribute quite a share for facilitating customers to make smoother transactions and with minimum fractions like declined payments, unauthorized payments, or late payments.

Choosing the perfect payment processing service provider requires quite an understanding of business revenue goals, the customer market, and the customers’ preferred payment methods selection.

Studies suggest that 50% of online shoppers will abandon their carts where their preferred payment method is not available.

To accept payments online, a payment gateway is required that authorizes the payment for processing

The gateways links checkout to the actual payment processor after encrypting the payment and purchase information and securely transmits the data to the processor.

Also Read: Online Payment Processing for Recurring Payments—A Definitive Guide About The Payment Gateways for Subscription Management

This blogpost outlines the three most common payment gateways to helps subscription merchants and SaaS vendors to make better choice of payment system for their platforms:

These are:

PayPal
Stripe
Authorize.Net

Here, we will overview the payment gateways, discusses their prominent features, and evaluates their limitations:

PayPal—The Most Popular Recurring Payment Processing Services Provider

PayPal is the pioneer of online payments through digital wallets. PayPal offers three subscription plans:

PayPal Standard—It is the basic account that costs no monthly fee and can be set up in minutes to start accepting online payments. The gateway redirects the customers or subscribers to PayPal’s website and fulfills the PCI-DSS requirements for online payment processing.
Express Checkout—It offers additional payment gateway support if you are already using some other payment gateway on site. It offers merchants an overlay window that securely paves the way for the customers to enter their credit card credentials and process the payments. Once the transaction is complete, the gateway returns users to the site. Processing charges remain the same.
PayPal Pro—With PayPal Pro, the checkout remains at the site and merchant has to comply with PCI-DSS to process payments through their site. It charges USD30 a month.

PayPal offers support to all the major currencies including Bitcoin from 200+ merchant locations from across the continents. PayPal accepts payments from PayPal accounts, debit and credit cards, e-wallets, and mobile payments.

PayPal Advantages

Salient features of PayPal include:

Automates recurring billing and payment processing with merchant account
Offers Aggregated Accounts
Offers PayPal Virtual Terminal
Micropayments to receive small payments for small businesses
Offers discounts for large-volume clients
Supports cryptocurrency
Easy and instant setup
Affordable processing fee
Global reach
Safe and quick payouts
Ensured PCI-DSS compliance
PayPal Purchase Protection to cover customers from fraudulent merchandise
Quick Account Approval and Faster Payout

PayPal Limitations

PayPal has limitations, too. It has more limitations than many of its contemporary payment gateways offering services for online recurring payment processing. Some of these are:

PayPal is not considered ideal for many of the subscriptions or SaaS businesses recurring billing and payment processing
PayPal is expensive than many other payment gateways
Charges more for international transactions
Accepts international payments through PayPal accounts only
Complex setup fee
PayPal supports only 25 currencies

Also Read: What Are the Online Payment Methods for Automated Recurring Payment Processing and How Do They Work?

Stripe—The Most Secure Recurring Payment Services Provider

To automate the recurring payment processing using Stripe is one of the most trusted and credible ways for online payment processing. Stripe accepts more than a hundred and fifty currencies and supports multiple online payment methods, regions, and businesses.

More than 27 percent of US citizens use it for making online purchases. Merchants prefer Strip due to its well-designed APIs that offer innovative features that open the integration and customization avenues for the subscription businesses, tech startups, SaaS, rentals, and other IoT-based ventures to boost their recurring revenue and accept more recurring payments without any frictions in the online payment processing.

Stripe works best with the eCommerce subscription businesses. Stripe can integrate with almost any eCommerce platform to tap recurring transactions in no time with as much customization as you want.

Stripe aims to facilitate as the payment gateway for many of the subscription-based-larger businesses, complex SaaS products, marketplaces. Some of the most high-profile clients of Stripe including bigwigs like Target, Lyft, Pinterest, Kickstarter, and others.

Stripe offers no monthly fee for the account and charges a highly affordable and industry-specific transaction fee for the online recurring payments. With Stripe, no strings are attached and merchants can also easily terminate the account at any point if they want to switch or cancel the account for any reason.

Unlike many other payment gateways, Stripe allows merchants to migrate the data if for any reason merchant wants to migrate to any other payment gateway.

Stripe Advantages

Here are the most prominent features of Stripe for seamless recurring payment processing:

Automated recurring payments directly into the merchant account
PCI-DSS Compliance with encryption and tokenization
Protection Against Chargebacks
Supports more than 135 currencies from 25+ merchant locations, including the US, UK, Canada, Australia, Europe, Australia, India, China, and more
Accepts international recurring payments through several credit and debit cards, also from other digital wallets, most notably, mobile wallets like Android Pay, Apple Pay, 3D Secure, ACH, Google Pay, AliPay, etc.
Payout in 07 days
Adds an additional layer of security with an anti-fraud system that combines machine learning with a customizable ruleset
Data Migration Assistance to import data to switch to other payment processing services provider
Refunds chargeback fee in case the dispute is over in merchant’s favor
Supports custom SQL queries

Stripe Limitations

Though Stripe is extremely popular in online payment processing between B2B, it has some limitations too. Some of the prominent ones are:

No PayPal Supports—Subscription merchants are required to integrate another payment gateway or PayPal itself to process PayPal payments.
Strict Background checks for account approval
Less popular for B2C
Processing Charges may fluctuate based on locations and can inflict more
No Real-Time Customer Support

Also Read: Online Payment Frauds—Types, Challenges, Detections, & Preventions

Authorize.Net—The Most Affordable Recurring Payment Services Provider

Authorize.net is also one of the most popular and widely-used payment gateway that facilitates merchants across the regions to receive recurring payments directly into their accounts.

Authorize.Net is trusted by hundreds of thousands of merchants from across the world. Each year, Authorize.Net processes above a billion transactions comprised of a hundred and a half-billion-dollar payments. It specifically is used to enable merchants to receive online recurring payments set up through the bank accounts.

Authorize.Net works with almost every merchant account and payment processor. For merchants having a payment infrastructure in place and are looking for a payment gateway that can accept online payments, Authorize.Net is quite an option.

Authorize.Net offers recurring payments processing services to businesses of all sizes based on subscriptions and other forms of recurring billing business models such as eCommerce subscription market, rentals, leasing, SaaS, cloud computing, data centers, telecom, power, managed services, and hundreds of more.

Authorize.Net Advantages

Below are some of the most highlighted features of Authorize.Net as a payment gateway to process recurring payments:

Automated and instant recurring payment processing directly into a merchant’s account
PCI-DSS compliant payment gateway
Protects against chargebacks with an advanced fraud detection suite that uses 13 configurable fraud filters to identify, manage, and prevent fraudulent transactions
Offers all-in-one third-party merchant account with payment gateway service
Charges industry specific transaction fee i.e. 2.9% plus $.30 per transaction.
Processes online payments from hundreds of merchants locations from the United States, Canada, United Kingdom, Europe, And Australia
Offers account updater feature to keep customer’s credit card information up-to-date to avoid recurring payment hassles and involuntary churn
Accepts recurring payments from all major credit cards, debit cards, Apple pay, PayPal, and more
Process Faster Than Several Other Prominent Payment Gateways

Authorize.Net Limitations

Authorize.Net comparatively is not as much preferred payment gateway for recurring payments due to some of the following limitations:

Does not offer non-bank merchant account
Monthly Charges up to USD25 when signed up with merchant account
Charges USD49 Set up fee
Supports merchant account from regions like the US, UK, Canada, Australia, and Europe

Also Read: 07 Ways SubscriptionFlow is An Apt Solution as the Best Online Subscription Billing Software for Your SaaS and Subscription Businesses

PayPal vs. Stripe vs. Authorize.Net—A Quick Comparison

Automate Instant and Secure Recurring Payment Processing with SubscriptionFlow

SubscriptionFlow is an automated recurring billing and subscription management platform that offers automated payment processing services of the recurring payments through the integrations of multiple payment gateways to process multiple payment methods and currencies from across the regions and locations.

SubscriptionFlow offers integration with PayPal, Stripe, Braintree, Authorize.Net, and many more to facilitate subscription services providers and SaaS vendors to offer their customers the best customer experience at the checkout and cater to the customers from across the regions to pay in their own currency.

SubscriptionFlow is a highly customizable and flexible SaaS for the automated management of subscriptions or recurring billing and to streamline the other revenue operations with the integrations for sales, marketing, support, finance, communications, and others.

To learn more about the recurring billing and payment processing for your subscription or SaaS businesses, talk to our subscription management ninjas and get the personalized and exclusively tailored subscription billing, customer management, recurring payment processing, and recurring revenue management solutions.