Note: If you have any questions after reading this and the several other articles relating to PayPal on this site, please leave a comment or contact PayPal directly. Unfortunately, due to time constraints, I am unable to offer any advice over email so all emails related to PayPal will remain unanswered.
Update June 2018: I have now switched to 2Checkout instead of Braintree. Unfortunately, I had a negative experience with Braintree. They decided to ban our account after receiving just 2 refund requests from a 100 sales, which seems nonsensical to me.
I’ve been using PayPal and Braintree to collect payments for my plugin sales, and I can now do some comparisons in terms of charges. If you have tried to understand the pricing of these payment gateways you will know how complex it is to try and compare them.
The best way I found is to divide the monthly charges by the monthly sales I processed through each processor, and that gives me the percentage cost of using each of these payment gateways.
While Braintree has one price per transaction across the board (on EU transactions, the rate is 2.9% + €0.35. For non-EU transactions, the rate is 3.9% + €0.35.), PayPal lowers the fees as your business grows. So, in the long run, I believe PayPal is the cheaper of the two. Braintree also charges €15 for chargebacks, and keeps all the commissions when you give refunds to your customers.
My average fees for Braintree are 4.4% while those for PayPal are 3.8%. They might be close but that 0.6% difference can be important when you start earning more money.
That doesn’t consider the fact that with PayPal I can only withdraw up to $2,500 at a time to my debit card, and there is a 2 Euro charge per withdrawal. Again this adds up and frankly is quite ridiculous. Since my account is based in Malta I can only withdraw to a debit/credit card or to a US bank account which I don’t have.
I will still keep using Braintree as the benefit of offering customers the ability to pay by credit card outweighs the extra cost, but when Stripe becomes available in my country I’ll probably consider a switch if it works out cheaper.