During the web application or mobile application development process that will be accepting monetary transactions, one of the choices you will need to consider is which payment platform you want to incorporate into your software. One of the first aspects you should be looking at with payment platforms is their policies and which businesses use these online platforms to drive their own sales. For instance, large companies like Uber, use Braintree, while prominent brands like Adidas use Stripe. PayPal, on the other hand, is a very common payment platform for numerous brands like eBay and Shopify. While looking at who uses which platform is a great way to get a quick glance at which payment platform is preferred by the best, doing a direct comparison, will always yield you with better answers. So, let’s take a look at Stripe, PayPal, and Braintree; what payment methods they take, what their fees are, and what they offer to various types of marketplaces.
If you are familiar with Braintree & PayPal, you may already be aware that there is a relationship between the two, as Braintree is a division of PayPal that caters to ecommerce companies looking to process mobile and web payments. While Braintree is a division of PayPal, PayPal itself specializes in offering an alternative and electronic method for those wishing to get away from using paper methods like checks. To put this plainly, PayPal is an online payment processor for online vendors dealing in online money transfers, while Braintree, is an online payment processor for mobile and web payments. This difference is enough that both can be considered as standalone platform options.
For those looking to open up or run an ecommerce website, the most common payment methods you are going to want to accept are Visa, Mastercard, and American Express credit cards. However, if you want to cater to a larger credit card market, all three payment platforms, also provide your customers with access to Maestro, Diners Club, Discover, and JCB credit cards. While this is great, not everyone uses credit cards worldwide and this is where the breakdown between the three platforms happens.
One of the major considerations that any online ecommerce website or mobile app owner is going to take into account, is how much they will be required to pay out to use the payment platform. The amount is dependent on how each platform handles chargebacks, refunds, and service fees. Here is how Stripe, PayPal, and Braintree deal with these categories.
On all of these platforms, the chargeback, the transaction fee, and the refund amount will be taken directly from your bank account if your merchant account does not have the funds available.
So, PayPal will end up costing you more if you want to deal primarily in AMEX transactions.
A common issue that occurs with online marketplace transactions resides around how the service fee and item fee is managed as the marketplace owner should be given the service fee for using the platform and the seller should be given the value of the purchased item. One way to go about this is by splitting the payment, which is exactly what Stripe, PayPal, and Braintree offers. Stripe has a program called Connect which handles split payments, Braintree has a program called Marketplace, and PayPal uses their Adaptive Payments System. Unfortunately, PayPal’s Adaptive Payments System only works with select partners, so those who are using online marketplaces are better off using Braintree’s Marketplace option. Both Stripe’s Connect and Braintree’s Marketplace programs cost the same to use and both automatically open up merchant accounts for those selling in marketplaces.
While any type of modern storefront or marketplace can be created using numerous types of backend programming languages, if you want to incorporate a payment platform, the platform must have an Application Programming Interface that works with the backend language of your storefront or marketplace. Why? An Application Programming Interface or API will provide the communication needed between your storefront and your payment platform.
Luckily, Stripe, PayPal, and Braintree all have very well-documented APIs with the most commonly used backend languages, including Ruby, PHP, Node.js, and Ruby on Rails. If you are looking at developing a mobile commerce application, Stripe, PayPal, and Braintree also have APIs for both Android and IOS.
While there is no straightforward answer to which payment platform is better, the main considerations you want to take into account is the availability of each within your target geographies, what the fees are like, and what type of business protection each type of account gives. You may also want to conduct some demographic research on your target market to determine which payment methods your customers prefer before committing to one.