Braintree vs. PayPal: Which One is Right for Your Business?

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    Braintree and PayPal are reliable payment service providers (also known as PSPs) that businesses can use to accept payments online through e-commerce stores. If you want the greatest possible customization at no additional charge, Braintree is the better option.

    On the other hand, PayPal (or more precisely PayPal Payments Standard) is likely a better option for business owners who need a simple online payment solution that easily integrates with their ecommerce platform.

    So these options stack up.

    Braintree features, prices, pros and cons

    Braintree was acquired by PayPal in 2013, but they are undoubtedly the more technically advanced PSP among the two. With their impressive suite of developer tools, you or your engineers can customize your shopping cart to the handle and integrate it with your existing platform. It’s designed to scale with your business too, so you no longer have to worry about outgrowing this platform.

    Through Braintree, you can accept PayPal payments, Venmo in the US, all major credit and debit cards, digital wallets, local payment methods, and ACH deposits in over 130 currencies from 45 countries worldwide. And if you want to accept credit card payments personally – if you have a stationary location in addition to your online shop or want to sell your goods or services on the go – you can integrate the PayPal Here SDK into your POS app, with which you can use the physical POS card reader from PayPal.

    What makes Braintree particularly unique is that they provide their customers with their own individual merchant accounts, rather than having them split into a single aggregated merchant account like most third-party payment processors do.

    In addition to a payment gateway and a merchant account, Braintree offers its small business tools tools and services with which they can optimize their internal processes, e.g. B. customizable sales reports, recurring billing, and integration with a variety of third-party apps. Braintree is equipped with advanced fraud and data security tools and ensures PCI compliance.

    Braintree is a particularly clever option for market companies, as Braintree actually offers a payment solution that is specially tailored to the special needs of these platforms: With Braintree Marketplace you get the continuously adjustable, scalable payment solution of a standard Braintree account as well as integration with Hyperwallet, that enables fast, efficient and secure global withdrawals.

    Braintree pricing

    Braintree’s pricing is incredibly simple: they charge a flat fee of 2.9% + $ 0.30 per transaction. Exceptions are ACH deposits, which cost 0.75% per transaction, as well as PayPal and PayPal credit payments, for which there are no fees at all. (Verified 501 (c) (3) nonprofits receive discounted pricing.)

    For this levy you will have access to Braintree’s main products and services, including a merchant account and payment gateway. Fraud tools; Third party integrations; Reporting and recurring billing. You can also contact the Braintree customer service team by phone and email and get their data migration assistance.

    That being said, the only major fees you need to know about are:

    • An additional 1% fee for transactions in non-US currencies.

    • An additional 1% charge for credit cards from customers outside the US.

    All other fees that apply to specific transactions are clearly outlined Braintree’s pricing page. Alternatively, companies that process larger quantities can contact Braintree for a custom pricing model, which may include custom flat-rate or interchange-plus pricing. You can also request a free sandbox trial to see how Braintree works with your existing platform before committing to service.

    Braintree pros and cons

    Braintree provides each customer with their own, dedicated merchant account instead of depositing your money into an overall account managed by the provider. Having your own merchant account is a much safer and more stable solution for several reasons. First, the risk of fraud inherently increases with aggregated accounts, making providers particularly sensitive to unusual behavior – which can lead to accounts being frozen and funds being held more frequently.

    In addition, merchant account providers must adhere to industry rules for handling and withdrawing funds from dedicated merchant accounts. On the other hand, overall accounts are managed entirely by the provider himself, so that they set their own rules and conditions, which they can essentially change at any time.

    Additionally, Braintree’s pricing is simple and transparent, and its developer tools are some of the most robust and sophisticated on the market (possibly only competing with Stripe, another giant in the world of tech-centric PSP providers). If you have the ability or the team to leverage Braintree’s developer tools, you can create pretty much any checkout experience you want.

    On the flip side, while Braintree’s developer tools are a great strength, this option may not make sense if you don’t have the engineers (or the technical skills yourself) to use them. In that case, you might want to consider a simpler PSP – and PayPal might be just the thing for you.

    PayPal features, prices, advantages and disadvantages

    PayPal offers a variety of merchant services, including the ability to accept and process payments in person (with PayPal here) and through invoicing (with PayPal invoicing). Today we’re going to focus on PayPal’s payment gateway.

    PayPal offers two payment gateway services: PayPal Payments Standard and PayPal Payments Pro.

    PayPal Payments Standard is best if you don’t have programming experience or a developer on your team, as all you need to do is copy and paste a line of code or integrate its plugin into your existing shopping cart. Both options only take about 15 minutes to implement. As you can probably guess, PayPal Payments Standard does not allow customization. Instead, it embeds a “Buy Now” button on your website that will redirect your customers to a checkout page hosted by PayPal.

    If you prefer a fully customized checkout solution that lets customers stay on your own website, go for PayPal Payments Pro. This plan also gives you access to a virtual terminal that allows you to accept credit cards through your computer, mobile phone, or devices without an external card reader. Note, however, that a developer is required to implement this solution.

    Both payment gateways allow you to accept payments in 25 currencies from 202 countries, send online invoices, and simplify PCI compliance. Both are also compatible with major ecommerce platforms like Shopify, BigCommerce, WooCommerce, and Magento.

    PayPal prices

    PayPal Payments Standard does not cost an additional monthly fee, but PayPal Payments Pro costs $ 30 per month. Whichever payment gateway plan you choose, you’ll pay 2.9% + $ 0.30 per transaction if the money is from a US account – which, as you can probably tell, is the industry standard – although nonprofit Organizations can get a discounted rate.

    The exception to this is the use of the American Express card, which incurs a transaction fee of 3.5%. And if your client’s money is from outside of the US, you’ll have to pay a 4.4% fee plus a fixed fee based on the currency.

    You also have to pay extra for certain additional PayPal functions. PayPal’s recurring billing services cost an additional $ 10 per month, and Advanced Fraud Protection Services cost $ 10 per month plus an additional $ 0.05 per transaction. For all of the other fees you might need to know about, including chargeback fees and mobile card reader fees, see PayPal merchant fees page. Note, however, that you are not bound by any long-term contracts, so you can cancel your PayPal payment gateway plan at any time with no cancellation fees.

    PayPal pros and cons

    Small business owners who are concerned about the complexity of setting up a payment gateway will definitely benefit from the PayPal payment standard, as it is specifically designed to make integration easier for non-programmers.

    However, PayPal does not provide users with their own merchant accounts. Instead, PayPal pays your money into a single, aggregated account and then transfers your money, minus fees, to your bank account according to the terms set out in your contract.

    It’s also worth noting that PayPal (and therefore Braintree’s) personal POS terminals are quite limited. Currently they only offer mobile card readers and do not have a countertop register. However, they work with other reputable POS systems like Vend and Lavu so a more robust POS solution is available through the PayPal network if needed.

    Braintree vs. PayPal: Which PSP is Right for Your Business?

    Braintree is the best option if you are looking for highly customizable software at a reasonable price. You will also receive a special merchant account that can be particularly useful for fast-growing companies. If ease of setup and integration is more important to your business than this functionality, choose PayPal.

    A version of this article was first published on Fundera, a subsidiary of NerdWallet.

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