Can Stripe Payout to PayPal?

January 2, 2020

January 2, 2020

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Stripe and PayPal are known as two of the most user-friendly and versatile merchant account and payment gateway providers available. When it comes to payment processing partners, they are two of the top choices for small business owners. However, one common question from merchants is whether or not Stripe can payout revenues to their PayPal […]

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Stripe and PayPal are known as two of the most user-friendly and versatile merchant account and payment gateway providers available. When it comes to payment processing partners, they are two of the top choices for small business owners. However, one common question from merchants is whether or not Stripe can payout revenues to their PayPal account, rather than to a typical merchant bank account. This post will answer that question.

Cross-Platform Compatibility

The question of whether Stripe can payout to PayPal is an issue of cross-platform compatibility. Once you begin to accept payments from customers using Stripe, your Stripe account cannot transfer money directly across to another platform. This is especially true for companies like PayPal, which Stripe actively competes with. Since PayPal provides merchant account services as well, this would be akin to giving more business to one of their competitors. For this reason, Stripe doesn’t support withdrawal from your Stripe account into a PayPal account. Aside from that, however, there is an even more fundamental reason for the lack of support: PayPal doesn’t accept traditional ACH deposits, which is how Stripe delivers payouts. For this reason, the two platforms can’t be made to work together, there just isn’t an API available that allows them to be integrated. The barrier isn’t technological, however…it just has to do with the way payment processing companies do business. We’ll explain this next.

Can Stripe Be Integrated With PayPal?

With the technology currently available, Stripe could be easily integrated to work with PayPal. However, these two companies would be unlikely to ever agree to work together unless some kind of new business regulations were passed that mandated it. They are vying for the same customers, so allowing integration would be akin to handing potential sales off to a rival company. In addition to being competitors, both Stripe and PayPal charge according to a different fee structure depending on factors like home country and currency. These differences would further complicate any attempt to integrate the two systems. Because of the differing systems and structures, it would make the whole process more difficult and confusing for customers as well. For example, there might have to be additional compliance checks throughout the process, and processing fees might end up being higher, resulting in a worse overall customer experience. After all, higher Stripe fees and higher PayPal fees will both end up being absorbed by you, the end user. Here’s one example of features that might be incompatible: a Stripe account might make instant payouts, while a PayPal account might take two business days to pay out revenues. Deposit schedules could get all mixed up, maybe even leaving you with an unpleasant surprise when you check your bank account balance. In addition, differing fraud prevention measures on both platforms would need to be aligned so that you wouldn’t receive any unnecessary alerts or confusing false positives.

Solution

For disappointed customers who wish Stripe could be integrated with PayPal, there is a solution. It’s not entirely effortless, but it’s easy enough if you have accounts with both companies. All you have to do is transfer money from one system to your bank, and then from your bank to the other system. For example, you can get your payout from Stripe sent to your merchant bank account. Then, in a separate transaction, use PayPal to transfer that same lump of money into PayPal from your bank. It’s just one extra step, and it works if you absolutely need money to move from one account to the other. There are third-party apps that integrate Stripe and PayPal, but essentially all they do is automate the process above. This can save you time if you’re used to doing it manually, but they do charge fees for the convenience of automating this process. It also may not work with open-source versions, due to permissions that are required.

Final Thoughts

While there isn’t a completely free, clean, and seamless way to integrate Stripe with PayPal, you can still use these service providers in conjunction with one another. It’s just a matter of moving your PayPal or Stripe payouts manually from one place to the other, or paying a third-party service to move the funds for you. Whichever you choose, both PayPal and Stripe are known as high-quality credit card and debit card processing providers for merchants small and large, and both have changed the digital marketplace as we know it.

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Stripe and PayPal are known as two of the most user-friendly and versatile merchant account and payment gateway providers available. When it comes to payment processing partners, they are two of the top choices for small business owners. However, one common question from merchants is whether or not Stripe can payout revenues to their PayPal […]

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