How and Why I left Paypal and started using Stripe

Chris Lema

Want the good news?

If you’re anything like me, you’ve discovered how easy it is to use Paypal. Everyone understands it now (after many years of it being around), and people “get” that they can make a payment even if they don’t have a Paypal account. So maybe you’ve set up an e-commerce solution and linked it to Paypal. Maybe you’ve used it for a small non-profit to accept donations. Maybe you’ve noticed that a lot of plugins support it – especially those membership ones that you want to use on your member-based, content-protected site. Well, the good news is it’s easy and everywhere.

There’s bad news coming, right?

In order for Paypal to put money into my account, it also has to have the right to take money out of my account. I get that. You get that. We all get that. But there’s some basic logic to the process, right? Take money out when I want to pay for something. Put money in when I am paid for something. It all seems so basic. But from the beginning of Paypal’s history, they were dealing with fraud.

So logically, they implemented a feature that lets them put a hold on your funds for a period of time in case there are refund requests. I get that. I don’t love it. But I get that. They hold a portion of the funds for 90 days and then it’s yours.

But what happens when that portion isn’t small? What happens when it impacts your business? You get a little bit screwed. I know, crass language, but hey, it’s not a nice feeling.

Wait, does it get worse?

If frozen funds is all that was going on, I’d be unhappy with Paypal, but I wouldn’t hate them. But it gets worse – way worse.

This past December, on a family trip to Disneyland of all places, a full week after someone had paid me for services rendered (not the sale of a refundable product), Paypal decided it wanted some of my money.

This was after they’d already put it into my account. So what did they do?

They went into my checking account and grabbed 70% of the funds that had been paid to me. Yes, $700 dollars were yanked out. Without notice or approval. Without complaint from the customer.

Apparently Paypal wanted more funds in their accounts for the holidays.

So I switched to Stripe

What’s Stripe? Well, it’s a no-contract payment gateway that lets you collect payments, including recurring payments, and push the money to your own account. It does all this without your needing to store credit card information, which means two things for your sites:

  1. You have to use SSL on your site to collect the information (which means you need a private IP)
  2. You don’t have to worry about storing credit cards and PCI compliance requirements.

Want to ask more questions? Visit the Stripe site.

Setting up an account is fast and free. And it gets money in your account for 2.9% plus .30 per transaction. That’s a great deal!

Stripe works great with WordPress

So I decided it was time to start using Stripe. Switching to Stripe was incredibly easy. There’s even a fantastically easy to use plugin, called WP Stripe.

There’s an add-on for Gravity Forms, which I think is awesome. But here’s the thing, right now it has issues and the programmer has said she fixed it but hasn’t released it yet. In fact, she’s only shared advanced copies with people who’ve donated. So for now, I’m waiting to see if she pushes it out.

But for small organizations and non-profits, WP Stripe works just fine, giving you a simple pop-up that lets someone donate.

So if you’re ready to give it a try, or at least see what it looks like, you can visit my donation page. But be warned, your donation has to be at least $.50.

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Comments

  1. Hey… I’m going to be looking at Stripe now.  Thanks for your take on them.I’m meeting with a friend who has a solution sometime this week as well.  I think he’s talking about WorldPay, but I’m  not sure.  You do good Chris.  I haven’t forgotten about the Google integration stuff.  I’m going to play with my WordPress account before I do though.  cya!

  2. Hey Chris, I remember you talking about this at lunch.  With Stripe you are actually sending/storing CC data, correct?  So there would be extra security concerns and such as opposed to letting Paypal handle everything?

    • scottbolinger You send the data, but you don’t store it. So you’re not on the hook for managing the storage, but you should have an SSL cert on your site for when the data is passed to you. That said, SSL Certs aren’t very expensive, the trick is making sure your hosting plan provides a dedicated IP. That can cost a bit, but it’s totally worth it.

  3. Pity that Stripe isn’t available in Europe :(

  4. I suppose if you just had to have Paypal, for instance to sell on eBay, you can set up a separate bank account to connect to Paypal and whenever you receive money from Paypal into the account then immediately withdraw the money in cash.

  5. Chris, can you speak to the user experience when buying through Stripe? For instance, with PayPal Express, it’s a bit clunky (you’re sent to their site, etc), but with PayPal Pro, it’s pretty straight-forward and takes place on your site. How does Stripe work? That alone may be a reason to use if it’s as easy as PayPal Pro, but costs the same as PayPal Express. (Other than the SSL and Dedicated IP–it’s still less.)

  6. Great piece…. definitely gonna check Stripe out. From what I can see, however, it doesn’t work with my membership plugin – WPMU Membership Premium. Hrmmm, any ideas?

  7. Unfortunately this is for US and Canadian residents only. I went to sign up and then found out I couldnt have an account as I live in Australia

  8. Does the WP-Stripe plugin handle re-occuring payments/subscriptions?

  9. I just tried Stripe and the ability to setup plans seems limited. There does not seem to be an option to charge a one time fee — only recurring fees.

  10. Hi Chris, thanks for this write up. I’ve been looking at implementing Stripe with WordPress on some of my sites and recently did a write up myself of all the available WordPress Plugins for Stripe at http://www.catalystdesigns.co.uk/stripe-wordpress.

    It looks like you’ve changed your donation form since this post but also that Stripe is now available in the UK which is great news. I would be interested to know how the fees compare with PayPal as Stripe charges an additional 2% for overseas cards which I think in some cases might be more expensive than PayPal but I’m not sure.

    Also I’d have to agree with the comments about Gravity Forms+Stripe, I can’t get it working and free support isn’t offered though I understand that and you can purchase one off support for $25 and there are other paid plugins which might do the job.

  11. It doesn’t bother you that they hold your funds for 7 days before transferring to your account?

  12. PayPal holding funds makes business difficult to even do. We usually recommend our clients to use merchant accounts or as you suggested, stripe. Payanywhere & square are great mobile processors we recommend highly.

  13. I left PayPal too. PayPal was alright but in a last few years it’s shit. PayPal took around $3000 from my account and I’ve never seen it again. Now I’m trying Stripe so I hope that I’ll not be disapointed. Anyway, my new website with stripe is microinside – It’s a website where I sell silicone stands for mobile phones called Touch-U. Just have a look

  14. So it’s been a while do you still feel the same about stripe? most reviews I read about stripe are horror tales about freezing payments and accounts being closed without notice/ Just wondering if your still using them and any bad experiances so far?

  15. Hi, Chris. I’m wondering the same as Patrick. Are you still using Stripe? Any praise, warnings, or additional tips?

  16. Is it possible for Stripe to remove funds from my bank account if I link it? I’m creating a Stripe account and the little line “I request and authorise Stripe to transfer to and from this bank account through the Bulk Electronic Clearing Systems (BECS) according to the Terms of Service.” bugs me. Specifically the “to and FROM this bank account” part.
    Could Stripe take money out of my account if I link it?

  17. If you need to find a swift code associated with a bank you’re trying to wire money to, you can use: http://bank-code.net/

    It list all banks in the world and their associated swift code, along with a breakdown of the actual swift code so that you can understand what it means.

    Here’s an example for BARCLAYS BANK PLC bank located in NEW YORK: http://bank-code.net/swift-code/BARCUS33XXX.html

  18. I was going to also check out Braintree.
    But when I got to their website it said “Braintree, a Paypal Company”

    Really? WTF

    Stripe it is then.

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