If you sell anything online — products, services, subscriptions, or digital downloads — you need a way to accept payments. A payment gateway securely processes card and digital wallet payments and moves the money into your account. The provider you choose affects your fees, your customers’ checkout experience, and even whether you can sell in certain countries.
This guide compares three of the most popular options — Stripe, PayPal, and Square — explains how payment processing fees work, and helps you choose the right fit for your business.
What Is a Payment Gateway?
A payment gateway is the technology that captures a customer’s payment details at checkout, sends them securely for authorization, and confirms whether the payment was approved. Most modern providers combine the gateway with payment processing and a merchant account, so you can start accepting payments quickly with a single signup.
Stripe
Stripe is a developer-friendly payment platform used by businesses ranging from startups to large enterprises. It offers powerful APIs, customizable checkout options, and tools for subscriptions, invoicing, marketplaces, and more.
Strengths
- Highly customizable checkout and payment flows
- Excellent for subscriptions and recurring billing
- Supports many payment methods, including cards, digital wallets, and local payment options in many countries
- Strong developer tools and documentation
- Prebuilt options like hosted checkout pages and payment links for non-developers
Considerations
- Advanced setups may require a developer.
- Available only in supported countries — check Stripe’s list before signing up.
Best for: Online businesses, SaaS companies, subscription services, and businesses that want flexibility.
PayPal
PayPal is one of the most recognized names in online payments. Many shoppers already have PayPal accounts, which can make checkout faster and increase trust.
Strengths
- High customer recognition and trust
- Fast checkout for customers with PayPal accounts
- Easy setup for small businesses and freelancers
- Buyer and seller protection programs (subject to eligibility)
- Additional options such as Venmo in the U.S. and pay-later features in some markets
Considerations
- Fees can be higher for some transaction types, including international and currency conversion.
- Account holds or reserves can occur, especially for new or high-risk sellers.
- Not available for receiving payments in every country.
Best for: Small online sellers, freelancers, and businesses whose customers prefer paying with PayPal.
Square
Square is best known for in-person payments, offering card readers and point-of-sale (POS) systems. It also provides online stores, invoicing, and payment links, making it a strong choice for businesses that sell both in person and online.
Strengths
- Excellent in-person POS hardware and software
- Unified system for online and offline sales
- Built-in tools for inventory, appointments, and customer management
- Easy setup with no complex technical requirements
Considerations
- Available in a limited number of countries.
- Less customizable for complex online payment flows than Stripe.
Best for: Retail stores, restaurants, cafes, salons, and service businesses that sell in person and online.
Side-by-Side Comparison
| Feature | Stripe | PayPal | Square |
|---|---|---|---|
| Best for | Online, SaaS, subscriptions | Online sellers, freelancers | In-person plus online sales |
| Ease of setup | Easy (basic) to complex (custom) | Very easy | Very easy |
| Customization | Very high | Moderate | Moderate |
| Subscriptions | Excellent | Good | Good |
| In-person payments | Available (Terminal) | Available (Zettle in some markets) | Excellent |
| Customer recognition | Moderate | Very high | Moderate |
| Country availability | Many countries | Many countries (varies for receiving) | Limited |
Fees, features, and country availability change. Check each provider’s current pricing and supported countries.
How Payment Processing Fees Work
Most payment providers charge a percentage of each transaction plus a small fixed fee. Rates can differ depending on:
- How the card is used: Online, in person, or manually keyed-in
- Card type: Domestic vs international cards
- Currency conversion
- Payment method: Cards, wallets, bank transfers, or pay-later services
- Volume: Larger businesses may negotiate custom rates
Also watch for:
- Chargeback fees when customers dispute payments
- Payout or instant transfer fees
- Monthly subscription fees for advanced features
- Hardware costs for in-person readers
Tip: Calculate your expected monthly cost using your typical transaction size and volume, not just the headline rate.
Selling From Countries With Limited Access
Stripe, PayPal, and Square are not available for merchants in every country. For example, many sellers in Pakistan and other markets cannot open accounts directly with some of these providers. Options businesses in these markets often explore include:
- Local payment gateways offered by banks and licensed payment companies in your country
- Mobile wallets popular with local customers
- Marketplace platforms that handle payments for sellers
- Cross-border payment services used by freelancers to receive international payments
- Registering a business in a supported country — a more complex option that has legal and tax implications
Always use licensed providers and follow local regulations. For freelancers, our guides on online job websites in Pakistan and tax deductions for freelancers may be helpful.
Security and Compliance
- PCI DSS compliance: Businesses that accept cards must follow payment card security standards. Using hosted checkout pages or embedded payment fields from your provider greatly reduces your compliance burden.
- Fraud protection: Many providers include machine-learning fraud screening. Review the settings and monitor disputes.
- Account security: Protect your payment account with strong passwords and 2FA — see 2FA methods ranked.
How to Choose
- Check availability in your country and your customers’ countries.
- Consider how you sell: online only, in person, or both.
- Compare total costs based on your real sales volume.
- Check integrations with your website platform, e-commerce store, and accounting software — see our accounting software comparison.
- Evaluate payout speed and cash flow needs.
- Consider offering more than one option. Many online stores offer both card payments and PayPal.
Frequently Asked Questions
Can I use Stripe and PayPal together?
Yes. Many websites offer both, giving customers a choice and potentially improving conversion rates.
Which is cheapest?
It depends on your transaction types, volume, and location. Compare each provider’s current rates using your own sales data.
Do I need a website to accept payments?
Not necessarily. Payment links, invoices, and in-person card readers let you get paid without a full website. When you’re ready to build one, see how to start a WordPress blog.
How long do payouts take?
Standard payouts usually take one to a few business days, depending on the provider and country. Some offer instant payouts for an extra fee.
Final Thoughts
Stripe is ideal for flexible online payments and subscriptions, PayPal offers unmatched customer recognition and easy setup, and Square excels for businesses that sell both in person and online. Start by confirming availability in your country, then compare total costs based on your real sales and choose the provider — or combination of providers — that gives your customers the smoothest checkout.
This article is for general informational purposes and is not financial or legal advice. Fees, features, and availability change, so confirm details with each provider.