Stripe or PayPal for Language Teachers: Choosing a Payment Processor

One of the most important aspects of your business as a language teacher is the ability to receive payments from your students. Stripe and PayPal are two of the most popular options for accepting online payments.

Both platforms have distinct features and benefits, but which is best for you?

In this article, we’ll go over Stripe and PayPal in detail, highlighting the benefits and drawbacks of each platform so you can make an informed decision about which one to use for your language teaching business.

Why Choose a Payment Platform?

It’s worth comparing the pros and cons of payment platforms like Stripe or PayPal versus international bank transfers or other payment options. Important points to consider are:

Usability: Customers can easily make payments with credit or debit cards using Stripe and PayPal’s user-friendly interfaces and straightforward checkout procedures. Setting up foreign bank transfers on the other hand, can be more challenging and time-consuming for customers.

Security: To secure the sensitive information of their clients, Stripe and PayPal both use cutting-edge security methods like payment card industry (PCI) compliance, fraud detection, and encryption. As a result, they are a safer choice than an overseas bank transfer, which is subject to fraud and has a higher element of risk.

Cost: International bank transfers often impose extra charges like wire transfer fees and exchange rate charges. By contrast, Stripe and PayPal impose a price per transaction which might be more affordable for you and/or your clients.

Speed: Compared to foreign bank transfers, which can take several days to complete, payments received through Stripe and PayPal are transacted instantaneously.

Checkout Process

Businesses that want more control over their checkout process often prefer Stripe. When a user submits their credit card information to Stripe via a website checkout form, they stay on the same page until payment is confirmed. 

PayPal, on the other hand, redirects users to their own website to complete the payment process. Anecdotally, many users find the checkout process a little confusing; and often assume that they cannot use PayPal without an existing account. In fact, PayPal will create a new account “on the fly” for anyone who needs to complete the checkout if they don’t already have one.

Verdict: Stripe is a clear winner.

Payment Processor Fees

Stripe charges a fee to merchants for each transaction they process. The exact fee varies depending on the country in which the business is located, but the standard fee for US-based businesses is 2.9% + 30 cents per successful transaction.

Stripe fees are fixed and apply regardless of transaction amount or currency, in contrast to PayPal, which charges a different fee structure, depending on a variety of factors.

For US-based businesses, the standard PayPal fee for domestic transactions is 2.9% + 30 cents per successful transaction. For international transactions, fees are 4.4% + plus a flat charge depending on the currency of purchase.

Verdict: Stripe the winner (because of their better rates for international payments).

Payment Options

Both platforms support a range of currencies and payment methods. Stripe and PayPal both support Visa, Mastercard, Amex, Diners Club and JCB credit cards. Depending on your location, both may also accept other, less popular forms of payment such as ApplePay.

PayPal has the additional benefit of allowing clients to pay you from the funds available in their own PayPal account (an advantage for some people who are nervous about submitting credit card details).

Although (at time of writing) it’s not a checkout feature, PayPal also allows personal account holders to transfer money between each other in a variety of currencies and also crypto-currencies like BitCoin and Ethereum.

Stripe meanwhile, has been leveraging their brand by adding innovative payment options to their vendor dashboards such as Alipay, WeChatPay, convenience store payments, and various buy-now-pay-later (BNPL) options.

Verdict: Stripe the winner (just)

Vendor Supported Countries

PayPal is available to vendors in almost every country of the world EXCEPT:

• Afghanistan
• Bangladesh
• Cameroon
• Central African Republic
• Cote D’Ivoire (Ivory Coast)
• Democratic People’s Republic of Korea (North Korea)
• Equatorial Guinea
• Gabon
• Ghana
• Haiti
• Iran
• Iraq
• Lebanon
• Liberia
• Libya
• Monaco
• Moldova
• Montenegro
• Myanmar
• Pakistan
• Paraguay
• Saint Lucia
• South Sudan
• Sudan
• Syria
• Timor-Leste
• Uzbekistan
  and
• Zimbabwe

Stripe vendor support on the other hand is more limited, restricted to ONLY businesses in the following 47 countries:

• Australia
• Austria
• Belgium
• Brazil
• Bulgaria
• Canada
• Croatia
• Cyprus
• Czech Republic
• Denmark
• Estonia
• Finland
• France
• Germany
• Gibraltar
• Greece
• Hong Kong
• Hungary
• India (Beta)
• Ireland
• Italy
• Japan
• Latvia
• Liechtenstein
• Lithuania
• Luxembourg
• Malaysia
• Malta
• Mexico
• Netherlands
• New Zealand
• Norway
• Poland
• Portugal
• Romania
• Singapore
• Slovakia
• Slovenia
• Spain
• Sweden
• Switzerland
• Thailand
• United Arab Emirates
• United Kingdom
• United States
• Indonesia (Beta)
• Philippines (Beta)

Verdict: PayPal the clear winner.

Brand Awareness

Stripe is well-known among businesses and developers, but it may not be as well-known among consumers globally as other payment processors such as PayPal. PayPal has been around for a longer period of time and has built a strong brand and reputation among consumers worldwide, which is why it is a more well-known name.

PayPal claims that as of September 2021, it has over 365 million active accounts worldwide.

PayPal was voted the most popular online payment method in the United States in a 2020 survey by Finder.com, with 55% of respondents saying they had used it in the previous year. According to the same survey, PayPal is the most popular payment method in the United Kingdom, Canada, Australia, and several other countries.

PayPal was found to be the most recognized online payment brand worldwide in a 2020 study by Auriemma Consulting Group, with 80% of consumers surveyed indicating that they were familiar with the brand.

Despite PayPal still having minimal brand recognition in some parts of the world such as China and Japan, I’ll score this one to PayPal as the platform with stronger customer brand recognition.

Verdict: PayPal the winner.

Dispute Resolution Processes

To assist merchants in resolving consumer disputes, both Stripe and PayPal have established dispute resolution procedures. But compared to Stripe, PayPal’s dispute resolution procedure is usually thought to be more thorough and user-friendly.

Customers can open issues using PayPal’s dispute procedure, known as the PayPal Resolution Center, if they have an issue with a transaction. The procedure enables communication and the exchange of supporting data between the client and the business. A group of skilled agents who work for PayPal review disputes and reach conclusions based on the facts presented.

Stripe, by comparison has a less complicated dispute resolution procedure. Clients can submit problems through their accounts, but the merchant is primarily responsible for handling the process and ensuring that the client is satisfied. Disputes with clients can take up to 3 months to be finalized and Stripe will hold the funds throughout this time.

Before choosing which platform to use, it is usually best to research and evaluate the dispute resolution procedures of each one because they can have a big impact on your business.

Verdict: PayPal the winner.

Payout Rules and Options

Stripe’s payout schedule varies depending on the country and type of account. In general, payouts are made on a rolling basis, with a delay of a few days. However, there are options available to enable instant payouts, but these may come with additional fees. It’s best to check with Stripe’s documentation or support to confirm the specific payout schedule for your account.

Transferring money from your PayPal account to the connected bank account is possible in a number of ways. A bank transfer is the most popular and straightforward method, and it typically takes 1-2 business days to complete. However, PayPal also provides a quick transfer option for qualifying accounts for individuals who require the money right away. With this option, you can rapidly transfer money from your PayPal account to the associated bank account, although there can be a cost.

PayPal now provides a debit card associated with your account that you may use to make purchases everywhere Mastercard is accepted or to withdraw cash from ATMs. Remember that some of these choices might not be accessible to you or might incur additional costs. It’s best to validate the precise options available for your account by consulting PayPal’s literature or support.

Verdict: A draw. Both platforms offer convenient payout systems.

General Support

Stripe and PayPal offer extensive support to customers and vendors, and offer various ways to get help. They both provide telephone support, email contact and live chat agent support.

They also have a community platform where users can help each other and find answers to common questions. Furthermore, PayPal also has a comprehensive help center with articles, tutorials, and videos that cover a wide range of topics and common issues, so customers can find quick answers to their questions.

Verdict: A draw. Both platforms offer reasonably good online help.

Which is Better – Stripe or PayPal?

There is no clear winner when it comes to choosing between Stripe or PayPal for your language teaching business because it depends on your specific needs. Stripe and PayPal are both popular and reputable payment processors that provide a variety of features to assist you in running your business.

The decision between Stripe or PayPal comes down to your specific business needs, and it’s worth evaluating both options to see which one will serve you best.

However in my personal opinion, if you live in one of the 47 countries (at time of writing this) where Stripe has vendor support, I would recommend you choose Stripe.

The simpler checkout experience and lower transaction fees on international payments are compelling reasons to go with Stripe as your first choice.

To get started with creating a Stripe account and becoming verified as a Stripe Merchant click here.

To create a PayPal Business Account click here.