Last Updated on July 2, 2023 by Ewen Finser
If you are trying to figure out if WooCommerce Payments or Stripe is the best payment gateway, you are in the right place.
I went down this rabbit hole when we were setting up a digital products brand recently. It’s actually really confusing and hard to decide!
I created this comparison guide to walk other digital operators through the research steps I took to find the right solution for our business.
Disclaimer: for different businesses we use Stripe and WooCommerce. So it really does depend. Rather than leave you with that, I’ll dig into what these factors are and which types of businesses should opt for either platform.
Understanding Payment Gateways
Before diving into the comparison, it’s essential to understand what a payment gateway is and how it functions. In simple terms, a payment gateway is a third-party service that enables online stores to accept and process payments. It acts as a bridge between customers’ payment methods and merchants’ bank accounts, ensuring secure and fast transactions.
Stripe and WooCommerce Payments: An Overview
- Stripe is a robust payment processing platform that offers a suite of APIs to facilitate online transactions. Its popularity stems from its ease of use, wide range of accepted payment methods, and seamless integration with various eCommerce platforms, including WooCommerce.
- WooCommerce Payments, on the other hand, is a payment solution specifically designed for WooCommerce. Powered by Stripe, WooCommerce Payments provides a more integrated user experience by allowing store owners to manage payments directly from their WordPress dashboard.
High Level Summary at Glance
Here’s my top line take for a quick reference:
Features |
Stripe |
WooCommerce Payments |
|---|---|---|
Pricing |
Stripe charges 2.9% + 30¢ per successful card charge for businesses in the US. For international transactions, an additional 1% fee is applied. |
WooCommerce Payments has the same pricing as Stripe, charging 2.9% + 30¢ per successful card transaction for US transactions and an additional 1% for international transactions. |
ACH Payments |
Stripe supports ACH payments, allowing customers to pay directly from their bank accounts. |
WooCommerce Payments does not support ACH payments. Customers need to use debit or credit cards. |
Payment Platforms |
Stripe supports a wide range of platforms including web, iOS, and Android. |
WooCommerce Payments is designed specifically for WooCommerce platform, limiting its use on other platforms. |
Business Solutions |
Stripe provides solutions for various business models, including ecommerce, SaaS, marketplaces, and platforms. |
WooCommerce Payments is primarily designed for ecommerce businesses using the WooCommerce platform. |
Support for International Payments |
Stripe supports over 135 currencies, making it suitable for businesses with international customers. |
WooCommerce Payments supports multiple currencies but not as many as Stripe. |
High Volume Businesses |
Stripe can handle high-volume transactions, making it suitable for large businesses. |
WooCommerce Payments can also handle high-volume transactions, but it’s more targeted towards small to medium-sized businesses. |
Accessibility |
Stripe offers a robust API, allowing businesses to integrate it into their own applications. |
WooCommerce Payments is directly integrated into the WooCommerce dashboard, making it more accessible for WooCommerce users. |
Availability of Funds |
Stripe initiates transfers to your bank account on a 2-day rolling basis, but can take 7-14 days to arrive in your bank account. |
WooCommerce Payments transfers funds to your bank account within 2-7 business days based on your settings. |
Stripe vs WooCommerce Payments: A Comprehensive Comparison
This section delves into a detailed comparison between Stripe and WooCommerce Payments, focusing on various crucial factors such as ease of use, cost, availability, and POS integration.
Ease of Use
An intuitive and user-friendly payment gateway is critical for a seamless customer experience. Both Stripe and WooCommerce Payments score well in this aspect.
- Stripe allows customers to complete transactions directly on your online store without redirecting them to a separate checkout page. This lowers the chances of cart abandonment and enhances the checkout experience.
- WooCommerce Payments offers a similar checkout experience. However, it goes a step further by incorporating all payment-related data within the WordPress dashboard. This makes it easier for store owners to track and manage transactions.
Cost Analysis
Cost is a significant factor when choosing a payment gateway. Both Stripe and WooCommerce Payments have similar fee structures, with minor differences.
Transaction Fees
Both platforms charge a transaction fee of 2.9% plus $0.30 for domestic transactions. For international transactions, WooCommerce Payments charges an additional 1.5%, whereas Stripe charges an additional 1%.
In-Person Sales
For in-person sales, WooCommerce Payments charges 2.6% plus $0.10 per transaction, with an extra 1% charge for international cards. Stripe, however, charges 2.7% plus $0.05 per transaction.
Currency Conversion Charges
Both platforms impose a 2% currency conversion fee.
Dispute Charges
In case of disputes, both Stripe and WooCommerce Payments charge $15 per dispute for US-based businesses.
Stripe vs WooCommerce Payments Fees Comparison
Here’s a summary of the key trade-offs to consider:
Feature |
Stripe |
WooCommerce Payments |
|---|---|---|
Transaction Fees |
2.9% + 30¢ per successful card charge for businesses in the US |
2.9% + 30¢ per transaction for US-issued cards and an additional 1% for cards issued outside the US |
ACH Direct Debit |
0.8% capped at $5 |
Not supported |
International Cards |
An additional 1% fee applies if the card is issued outside the US |
An additional 1% fee for cards issued outside the US |
Currency Conversion |
Additional 1% fee if currency conversion is required |
Additional 1% fee if currency conversion is required |
Refund Costs |
Refunds are free, but the original transaction charges aren’t returned |
Refunds are free, but the original transaction charges aren’t returned |
Chargeback Fees |
$15 |
$15 |
Setup/ Monthly Fees |
No setup or monthly fees |
No setup or monthly fees |
In-person Payments |
Starts at 2.7% + 0¢ for Tap, Dip, and Swipe transactions |
Not supported |
ACH Credit |
1.5% capped at $5 |
Not supported |
Availability and Supported Currencies
Both platforms support multiple currencies, but there’s a significant difference in their availability across countries.
- Stripe is available in 47 countries and supports more than 135 currencies, making it an excellent option for businesses with a global customer base.
- WooCommerce Payments is available in 18 countries and supports more than 100 currencies. However, its in-person transactions are limited to the US and Canada, which may be a drawback for businesses operating in other regions.
Integration with POS Systems
If your business operates both online and offline, it’s crucial to choose a payment gateway that integrates seamlessly with your POS system.
- Stripe, through its Stripe Terminal, offers an easy setup for in-person payments. It works well with various WooCommerce POS systems, providing a unified platform for managing online and offline transactions.
- WooCommerce Payments, while offering robust integration with WooCommerce, is limited when it comes to in-person transactions due to its availability only in the US and Canada.
Other Stripe Competitors Worth Considering
There are definitely some other payment solutions to consider as Stripe alternatives. If you’re in the evaluation stage still, check these out:
- Stripe vs Chargebee Compared
- Stripe vs Recurly Compared
- Stripe vs PayPal Compared
- Stripe vs WePay Compared
- Stripe vs Bill.com Compared
- Stripe vs Adyen Compared
- Stripe vs Moolah Compared
- Stripe vs Shopify Payments Compared
- Stripe vs Authorize.net Compared
- Stripe vs Melio Compared
- Stripe vs Marqeta Compared
- Stripe vs Plaid Compared
- Stripe vs Braintree Compared
- Stripe vs Chargebee Compared
- Stripe vs Stax Payments Compared
Final Verdict: Stripe vs WooCommerce Payments
Taking into account the factors discussed above, both Stripe and WooCommerce Payments offer robust solutions for WooCommerce stores.
However, Stripe’s wider availability, especially for in-person transactions, gives it a slight edge over WooCommerce Payments. Therefore, if your business operates both online and offline in multiple countries, Stripe is likely the better choice.
However, remember that the best payment gateway for your store ultimately depends on your specific needs, including your target market, business model, and personal preferences. Always consider these factors when making your decision.
Wrapping Up
Choosing the right payment gateway is a critical decision that can significantly impact your online store’s success.
Both Stripe and WooCommerce Payments offer robust features and competitive pricing, making them viable options for any WooCommerce store.
However, consider your specific needs and circumstances before making a final decision.
Other Payment Gateway Guides
If you are operating on a specific platform, you might find these guides helpful:
- Best Payment Gateways for WooCommerce
- Best Payment Gateways for Shopify
- Best Payment Gateways for BigCommerce