Stripe vs PayPal Fees: UK Rates, PayPal's New Tiers and the Cost per Sale

On Stripe vs PayPal fees for a UK maker, Stripe is cheaper at the published standard rates: 1.5% + 20p for a standard UK card against PayPal's 2.90% + 30p for most domestic sales. PayPal narrowed the gap on 1 October 2026 with an optional tiered plan that drops to 2.40% and then 2.10% at higher monthly volume, but you have to ask for it. International buyers, disputes and refunds change the sums again, so this guide works through each one with real rate cards.

Disclosure: ZeroRaised publishes this guide and appears in the final section. The figures come from the linked Stripe, PayPal, Paddle and Lemon Squeezy pages as checked on 18 Oct 2026, written for a seller based in the UK. Rates change, so check your own dashboard before you set prices; this guide makes no promise of sales or traffic from any provider or launch site.

TL;DR#

For card payments from UK buyers, Stripe's standard pricing takes less than PayPal's standard checkout at every price point in the worked examples below. PayPal's new tiered plan helps once you sell more than 4,000 GBP a month through PayPal, but even its lowest tier of 2.10% sits above Stripe's 1.5%. PayPal's own card processing service (a separate product that needs approval) is close to Stripe on price.

Outside the headline rate, PayPal's international add-on is larger than Stripe's, its dispute fee is lower, and its micropayment rate can win on very small sales. Many makers offer both: Stripe for cards, a PayPal button for buyers who prefer it. Selling from the US instead? The US payment processor fee table lists the standard rates for Stripe, PayPal and seven other vendors.

What changed at PayPal on 1 October 2026#

PayPal publishes rate changes for UK accounts on its UK Policy Updates page (checked 18 Oct 2026). Under a notice marked "Issued: 15 June 2026", six merchant fee notices each carry the line "Effective 1 October 2026:". So PayPal announced them in June, and they took effect at the start of this month. The UK merchant fees document linked from that page now reads "Last Updated: 1, October 2026".

The change that matters most for a small seller is new pricing on request. In PayPal's words: "We're introducing an optional tiered rate plan for receiving domestic commercial transactions." And: "From 1st October 2026, you may contact us to request enrolment in the tiered rate plan." Your rate in any calendar month depends on your eligible volume in the previous calendar month:

• 0.00 to 4,000.00 GBP: 2.90% + fixed fee
• more than 4,000.00 GBP up to 8,000.00 GBP: 2.40% + fixed fee
• more than 8,000.00 GBP: 2.10% + fixed fee

The other five notices are narrower. Domestic Pay Later and Buy Now Pay Later transactions now cost 3.90% + fixed fee. Pay Later through Payment Links costs 3.9% + 0.30 GBP. And PayPal is updating its fee page "to increase the fees that we charge for receiving card payments using our Virtual Terminal Product", to 2.90% + fixed fee on blended pricing.

Three details from the UK business fees page (checked 18 Oct 2026) decide whether the tiered plan helps you.

First, it is opt-in. "Unless and until PayPal confirms your enrolment in the tiered rate plan, the standard rate for receiving domestic transactions will continue to apply." Nothing changes on your account unless you contact PayPal and accept updated terms.

Second, it only covers sales charged at the "All Other Commercial Transactions" rate, the 2.90% line most checkout payments fall under. Eligible volume is "the total net settled value of your domestic and international commercial transactions received in the previous calendar month" at that rate. International sales count towards the threshold, but the tier only replaces the domestic part of the fee; the international add-on still applies on top.

Third, it works a month behind. A good October earns the lower rate in November; a launch spike followed by a quiet month gives you one cheaper month, then the base rate again.

Below 4,000 GBP a month through PayPal, nothing changes: the first tier is the same 2.90% as the standard rate.

Stripe vs PayPal fees in the UK: the headline rates#

Stripe's UK pricing page (checked 18 Oct 2026) describes its standard plan as "No setup fees, monthly fees, or hidden fees." Card rates depend on where the card was issued and what kind of card it is:

• 1.5% + 20p for standard UK cards
• 2.8% + 20p for premium UK cards
• 2.5% + 20p for European Economic Area cards
• 3.15% + 20p for international cards
• plus 2% if currency conversion is required

Premium cards are the snag in the headline number: they cost 2.8% rather than 1.5%, and you cannot tell in advance which buyers will use one.

PayPal's UK merchant fees document splits sales by how the money arrives. The standard rate for "All Other Commercial Transactions" is 2.90% + fixed fee, and the fixed fee for sterling is 0.30 GBP. When a buyer without a PayPal account pays by card (PayPal's term is a card funded payment from a user of its Terms for Payments without a PayPal account), the rate is 1.20% + fixed fee. PayPal also sells card processing as a separate service, Advanced Credit and Debit Card Payments, at 1.20% + fixed fee on blended pricing for Visa, Mastercard and several other networks, and 3.50% for American Express. That service is "subject to eligibility, application, and approval by PayPal".

The fixed part matters too: Stripe's 20p against PayPal's 30p is a 10p gap on every sale.

Worked examples: what a £10, £29 and £99 sale costs#

These are simple sums from the published rates: a UK seller, a UK buyer, the sale received in sterling, no currency conversion, and no VAT or other tax shown. Stripe figures assume a standard UK card. PayPal figures assume the standard commercial rate unless the column says otherwise. Rounded to the nearest penny.

Three things stand out.

On a cheap product, the fixed fee is most of the cost. A £10 sale through PayPal's standard checkout loses 5.9% of the price, against 3.5% on Stripe with a standard card. If your product costs less than a coffee, the micropayments section below is worth reading.

PayPal's top tier still costs more than Stripe's standard card rate at every price in the table. At £99 it is 69p more per sale. The tiered plan narrows the gap; it does not close it.

Among the rates in this table, PayPal's card processing service is the one place PayPal comes out level or ahead. It edges past Stripe above about £33, because a lower percentage eventually outweighs a higher fixed fee. On a £99 sale it saves 20p. But that is a separate product with its own application, not the PayPal button most makers add.

Now a month's view. Say you sell 200 copies of a £25 tool in a month, all to UK buyers, all through one provider. That is 5,000 GBP of sales.

• Stripe, standard UK cards: 1.5% of 5,000 GBP is 75 GBP, plus 200 × 20p = 40 GBP. Total 115 GBP.
• PayPal standard rate: 2.90% is 145 GBP, plus 200 × 30p = 60 GBP. Total 205 GBP.
• PayPal tier 2, if you enrolled and the previous month was also above 4,000 GBP: 2.40% is 120 GBP, plus 60 GBP. Total 180 GBP.

The tier saves 25 GBP that month. In practice buyers split between providers, which lowers your PayPal volume and makes the tier harder to reach.

International buyers and currency conversion#

Selling abroad changes the comparison more than any domestic tweak. Stripe sets a separate rate by card origin. PayPal starts from its domestic rate and adds a percentage depending on where the sender's account is registered.

PayPal's add-on for international commercial transactions is 1.29% when the sender is in the EEA and 1.99% for all other markets. The UK merchant fees document adds that the fixed fee depends on the currency received: 0.30 USD for US dollars, 0.35 EUR for euros, 0.30 GBP for sterling.

Here is a £29 sale received in sterling, with no currency conversion:

Currency conversion comes on top. Stripe adds 2% if currency conversion is required. Its currency conversion documentation explains that you can charge customers in over 135 currencies and that a charge in another currency is converted to your settlement currency. PayPal lists its conversion rate for business accounts as "3.00% above the base exchange rate" when you convert a balance, or when the receiver has agreed to bear the conversion.

So if you price in US dollars and then convert those dollars to pounds, both providers take a second cut, and PayPal's is larger. Either keep a balance in that currency and spend it there, or price in sterling and let the buyer's card issuer convert.

There is one more PayPal line to know if many of your buyers are in Europe. The fee document lists an "Additional service fee for recipients of EEA based international commercial transactions" of 1.29%, but says it "only applies to merchants who have separate agreements with PayPal". A standard small business account is not on one of those.

Refunds, disputes and chargebacks#

Fees on a sale you later give back are easy to overlook until the first refund.

Neither provider returns its fee. Stripe's refund documentation states: "Stripe's processing fees from the original transaction aren't returned." PayPal's fee page says that if you refund a commercial transaction "there are no fees to make the refund, but the fees you originally paid to receive the payment are not returned to you." On a £29 sale, a refund costs you 64p through Stripe or £1.14 through PayPal at standard rates.

Disputes cost more. Stripe's pricing page lists a dispute received fee of £20.00 "for each dispute you receive" and a dispute countered fee of £20.00 for each dispute you respond to manually. "You get this fee back for won disputes." Stripe's dispute documentation explains that Stripe debits the disputed amount plus a dispute fee from your balance, and that card networks typically allow cardholders to open disputes within 120 days of the original payment.

PayPal splits disputes into two kinds. For a buyer paying through a PayPal account or PayPal checkout, the standard dispute fee is 12.00 GBP, rising to 24.00 GBP under high volume dispute fees. For card transactions that do not go through a PayPal account or guest checkout, PayPal charges a chargeback fee of 14.00 GBP.

One dispute on a £29 sale wipes out the fee savings from dozens of sales. A clear refund policy, a recognisable statement descriptor and fast replies to support emails do more for your margin than the choice of provider.

Small payments and micropayments#

If you sell tips, stickers, small credit packs or a £3 app, the fixed fee is most of the cost.

PayPal has a micropayment rate for this. Its fee document says it can be "ideal as an alternative to standard commercial transaction rates for business that process payments under 5.00 GBP." Domestic micropayments cost 5.0% plus a fixed fee of 0.05 GBP, and other international micropayments cost 6.0% plus the same fixed fee. It needs an application and pre-approval, and once you switch, it applies to all commercial transaction payments into that PayPal account. So it suits an account used only for small payments.

On a £3 sale, the sums run:

• Stripe, standard UK card: 4.5p + 20p = about 25p
• PayPal standard rate: 8.7p + 30p = about 39p
• PayPal micropayment rate: 15p + 5p = 20p

Stripe's currency conversion documentation notes that Stripe sets a minimum charge amount "to make sure the Stripe fee doesn't exceed your charge." At very low prices, bundling credits helps on either provider.

Getting paid: payouts and withdrawals#

How fast the money reaches your bank matters too, especially when hosting bills come out of the same account.

Stripe's payouts documentation says that after your first live payment, Stripe typically schedules the first payout to complete within 7 to 14 days, depending on industry, country and risk level. After that, payouts run on an automatic schedule, or you can trigger manual payouts that usually take 1 to 4 business days. For UK accounts, manual payouts started before 5 pm London time can be eligible for same-day arrival. Standard payouts cost nothing. Stripe's pricing page lists Instant Payouts at 1% of payout volume with a minimum fee of 40p, and lists multi-currency settlement at 1% of payout volume or a minimum fee.

PayPal holds money in your PayPal balance until you withdraw it. The UK fee document lists withdrawal to a bank account as "No Fee" when no currency conversion is involved, withdrawal to a US bank account at 3.00%, and withdrawal to cards in the UK, Jersey, Guernsey and the Isle of Man as no fee. If your balance sits in another currency, the 3.00% conversion margin applies when you move it into sterling.

Taking PayPal through Stripe#

You do not have to run two dashboards to offer both. Stripe's PayPal documentation describes PayPal processed through Stripe, "available to businesses in supported European countries". The buyer is sent to PayPal, chooses a funding source, authenticates and comes back to your site. Refunds go through the Stripe Dashboard or API, and PayPal payments "can be refunded up to 180 days after the original payment."

The cost is the catch. Stripe's local payment methods pricing lists PayPal at "0.2% + 10p" plus PayPal fees per successful charge, plus 2% if currency conversion is required. You pay PayPal's own fee and a Stripe fee on top. On a £29 sale, that is about 16p more than going to PayPal directly.

For a maker who has just started selling, one dashboard and one refund flow may be worth 16p a sale. Once volume grows, a direct PayPal account with the tiered plan is the cheaper route.

When a merchant of record beats both#

Stripe and PayPal are payment processors. You are the seller, so VAT, US sales tax and invoices are yours to handle. A merchant of record resells your product to the buyer and handles tax on that sale, and its price reflects that.

Paddle's pricing (checked 18 Oct 2026) lists "5% + 50¢" per checkout transaction and "No monthly fees, migration fees, or hidden extras". These merchant of record prices are published in US dollars, not as UK sterling rates. Paddle describes that price as including payment methods and payment-related buyer support. Lemon Squeezy's fees page uses the same 5% + $0.50 base, then adds "+1.5% for international (outside of the US) transactions", "+1.5% for PayPal transactions" and "+0.5% for subscription payments". So on Lemon Squeezy, a buyer who picks PayPal costs you more than one who pays by card.

Stripe now runs its own merchant of record option. Its Managed Payments documentation describes it as a way to sell digital products such as SaaS and software, with sales tax, VAT and GST handled in more than 80 countries, plus fraud prevention, dispute management and transaction-level customer support. Check its price and which countries it supports in your own Stripe dashboard before you plan around it.

For subscriptions there is one more Stripe line. Stripe Billing pricing lists pay as you go at 0.7% of Billing volume, on top of payment fees. If you run recurring plans through Stripe Billing, add 0.7% to the Stripe column above before comparing it with a merchant of record that includes subscriptions in its rate.

A rough rule: if most of your buyers are in the UK and you are under the VAT registration threshold, a processor is cheaper and simpler. If you sell a digital product to buyers in dozens of countries from day one, the merchant of record premium buys back time you would otherwise spend on tax registrations. Ways to fund a product without venture capital covers why margin matters more when revenue is your only funding.

Which to pick for a bootstrapped launch#

Fees are one input. For a first launch, these questions tend to decide it:

1. Where are your buyers? Mostly UK card buyers favour Stripe's 1.5%. A lot of buyers outside Europe widen Stripe's lead, because PayPal's 1.99% add-on is larger than Stripe's step up from 1.5% to 3.15%.
2. What is your price? Under about £5, look at PayPal's micropayment rate or bundle sales. Around £30, PayPal's card service and Stripe are roughly level. Above that, Stripe's lower percentage pulls ahead of PayPal's standard checkout.
3. Do your buyers expect a PayPal button? Offering it costs PayPal's rate on those sales; a sale lost at checkout costs more.
4. Will you reach 4,000 GBP a month through PayPal? If not, ignore the tiered plan for now. If you will, enrol and check your rate the month after.
5. Do you want to handle tax? If not, compare a merchant of record's 5% + 50¢ (a USD price) with the processor rate plus the time and cost of doing VAT yourself.

Settle this before launch day. Run a real payment and a real refund on your live account the week before, so a test-mode checkout or a first payout delay does not surprise you mid-launch. Our product launch checklist for bootstrapped makers includes checkout in its pre-launch list, and how to handle traffic spikes covers what to watch when a launch post sends a rush of visitors to your pricing page.

If you are lining up launch venues, the launch sites directory lists free and paid options, and the Product Hunt page covers that venue's rules. How to launch on Product Hunt walks through the day itself, and the launch time tool helps you pick a slot.

Where ZeroRaised fits once checkout works#

A working checkout gives a launch something to point at: a real price, a real payment flow and a refund policy you have tested. None of that guarantees buyers turn up.

ZeroRaised is a free launch site for bootstrapped makers whose products have no institutional VC or accelerator equity. If your product is live and taking payments, you can submit it for review. The maker perks page lists separate offers for eligible makers, and free startup perks without VC explains how to find more. Neither replaces a fair price and a quick reply to a refund email.

So, Stripe vs PayPal fees: Stripe costs less per sale at standard rates for UK card buyers, PayPal's new tiers from 1 October 2026 help only above 4,000 GBP a month and only if you ask, and the real spread shows up on international sales, conversions and disputes. Run your own price through the tables above or the payment fee calculator, then offer the buttons your buyers actually use.