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.
Hey Jean,
Great write-ups, thanks you. I stumbled upon your articles while looking for a good option for a payment processor for a subscription based web service. I was considering 2CO but read a lot of very negative reviews about them (somewhat common for all payment processors). Would you care to share your experience with them thus far?
Thanks!
Too bad to hear your experience with Braintree. I used them years ago for another e-commerce project with success. They still seem to have very competitive rates and definitely are cheaper for me than 2CO. Stripe and Square and the other options I’m considering in second place. My main requirement is that I need the provider to support multi-currency settlement (not forcing me to convert to a particular currency by default, unless spread on their forex is <0,5%). I evaluated about 20 different processors and these came out on top.
Well, from my experience, it is usually works that way: dependless of commission rate, some clients prefer paying by PayPal, some by Skrill or Bank transfers… by and large you need to keep the client happy and able to pay 🙂
Thanks for sharing Dan and yes I agree with you. The more options the better from a client’s perspective. When selling digital products you certainly have to offer PayPal plus a credit card option, be it Braintree, Stripe or another processor.