Payment gateway selection is one of those decisions that seems simple ("just use Stripe") but has cascading effects on conversion rates, operating costs, and customer satisfaction.
The wrong gateway costs you sales — literally. Customers abandon checkout when they don't see their preferred payment method. In Europe, that might be iDEAL or Bancontact. In Scandinavia, Klarna. In many markets, PayPal is still the trust signal that makes hesitant buyers convert.
Let's compare the real options, including the math on fees that adds up to real money at scale.
The Fee Math That Matters
Before the comparison, let's establish the financial reality. On $100,000/year in transactions:
| Gateway | Fee Structure | Annual Cost on $100K |
|---|---|---|
| Stripe | 2.9% + $0.30 | $3,200 |
| PayPal | 2.99% + $0.49 | $3,480 |
| Square | 2.9% + $0.30 | $3,200 |
| Authorize.net | 2.9% + $0.30 + $25/mo | $3,500 |
| Klarna (merchant) | ~3-6% | $3,000-6,000 |
The differences look small as percentages but compound to thousands of dollars annually. At $500K/year, Stripe vs. PayPal is a $1,400/year difference. At $1M, it's $2,800.
But fees aren't everything. A gateway that costs 0.5% more but converts 2% better is significantly more profitable. Conversion rate impact matters more than fee differences.
Stripe
Fees: 2.9% + $0.30 (US) / 1.4% + €0.25 (EU domestic) / +1% for international cards WooCommerce plugin: Free (WooCommerce Stripe Gateway — official) Payment methods: Cards, Apple Pay, Google Pay, SEPA, iDEAL, Bancontact, Klarna (via Stripe), Affirm, Afterpay, and 20+ more
What's Genuinely Good
The checkout experience is the best in the market. Stripe Elements renders payment fields as an embedded form that looks native to your site — not a redirect to a third-party page. The card field validates in real-time, detects card type, and shows appropriate input formatting. This sounds minor but translates directly to fewer checkout errors and lower abandonment.
Apple Pay and Google Pay with Stripe are one-tap checkout on mobile. Customer taps the Apple Pay button, authenticates with Face ID, done. For mobile shoppers (now 60%+ of e-commerce traffic), this eliminates the entire form-filling friction. Stores report 10-20% higher mobile conversion rates with Apple/Google Pay enabled.
Stripe's payment method flexibility is the real strategic advantage. Enable iDEAL for Dutch customers, SEPA for EU bank transfers, Klarna for buy-now-pay-later — all through Stripe's unified integration. One gateway, many payment methods, one set of APIs.
Payment Links and invoicing for B2B or custom orders. Generate a payment link, send it to the customer, they pay. Useful for wholesale orders or custom product quotes.
The developer experience is exceptional. Clean API, excellent documentation, webhooks for every event, and test mode for development. If you ever need custom payment flows, Stripe is the only gateway that doesn't make your developers miserable.
What's Not Good
Account holds and fund freezes are Stripe's most controversial aspect. Stripe's risk algorithms can flag accounts for review and hold funds — sometimes for weeks. New stores, stores with high average order values, or stores in "risky" categories (supplements, for example) are more likely to be flagged. When your operational cash is frozen with no clear timeline for release, it's genuinely stressful.
No phone support. Stripe's support is email and chat only. When you have a payment issue at 2 AM and orders are failing, waiting for email support is painful.
European pricing advantage disappears for international. The 1.4% EU domestic rate is excellent, but add the +1% international surcharge and you're at 2.4% for cross-border European transactions — not dramatically better than competitors.
Verdict: Best overall payment gateway for WooCommerce. The checkout experience, payment method flexibility, and developer ecosystem are unmatched. Accept the risk of account review by maintaining clean business practices and keeping a backup gateway ready.
PayPal
Fees: 2.99% + $0.49 (US standard) / 3.49% + $0.49 (PayPal Checkout with Venmo) WooCommerce plugin: Free (WooCommerce PayPal Payments — official) Payment methods: PayPal balance, credit/debit cards, Venmo (US), Pay Later, bank accounts
What's Genuinely Good
Trust signal. For many online shoppers — especially older demographics and international buyers — seeing the PayPal button is a trust signal. "I can pay with PayPal" removes the anxiety of entering credit card info on an unfamiliar website. This is measurably true: stores report 10-15% of customers specifically choosing PayPal over direct card payment.
PayPal buyer protection encourages first-time purchasers. Knowing PayPal will handle disputes and refunds if something goes wrong reduces perceived risk.
Venmo integration (US) taps into a younger demographic that uses Venmo daily. Presenting Venmo at checkout feels natural for these users.
Pay Later (PayPal's BNPL) offers installment payments without third-party integration. 4 interest-free payments on purchases $30-1,500.
Global reach. PayPal operates in 200+ markets with 400M+ active accounts. For international stores, PayPal handles multi-currency, local payment methods, and cross-border transactions with less complexity than configuring Stripe for each market.
What's Not Good
The checkout redirect is a conversion killer. PayPal redirects customers to paypal.com to complete payment, then redirects back to your store. This two-step redirect breaks the checkout flow, adds load time, and creates confusion. Mobile experience is particularly bad — small screens, PayPal login prompts, redirect delays.
Fees are the highest. 2.99% + $0.49 per transaction is meaningfully more expensive than Stripe at scale. The $0.49 fixed fee (vs. Stripe's $0.30) especially hurts stores with lower average order values.
Account limitations and holds are even more aggressive than Stripe. PayPal is notorious for freezing accounts with little explanation and slow resolution. The dispute resolution process (PayPal almost always sides with the buyer) costs stores money and time.
The admin interface is terrible. Finding specific transactions, generating reports, and managing settings in PayPal's dashboard is an exercise in frustration. The UI hasn't fundamentally improved in a decade.
Verdict: Offer PayPal as an option alongside Stripe. Don't make it your primary gateway. The trust signal converts hesitant buyers, but the checkout experience and fees make it a complement, not a default.
Square
Fees: 2.9% + $0.30 (online) / 2.6% + $0.10 (in-person) WooCommerce plugin: Free (Square for WooCommerce — official) Payment methods: Cards, Apple Pay, Google Pay, Cash App Pay, Afterpay
What's Genuinely Good
Unified online + in-person payments. If you have a physical retail location, Square connects your POS and WooCommerce through one account. Inventory syncs, sales report in one dashboard, and customers see consistent payment branding.
In-person rates are lower (2.6% + $0.10 vs. 2.9% + $0.30) for stores processing in-person payments. Hardware (card readers, terminals) is reasonably priced.
Cash App Pay integration reaches Cash App's 50M+ active users. For US stores targeting younger demographics, this is meaningful.
No monthly fees. Unlike Authorize.net and some traditional gateways, Square charges only transaction fees. Good for stores with inconsistent transaction volumes.
What's Not Good
The WooCommerce integration is functional but not polished. Sync delays between Square and WooCommerce inventory, occasional order status mismatches, and limited customization of the checkout experience.
International support is limited. Square operates in fewer markets than Stripe or PayPal. If you sell internationally, Square's payment method options are limited.
Online checkout experience is good but not Stripe-level. The payment form works, but it doesn't have Stripe's polish in validation, error handling, and visual design.
Verdict: Best choice for stores with both online and physical retail. The unified ecosystem genuinely simplifies operations. For online-only stores, Stripe is better.
Klarna
Fees: 2.49-5.99% + $0.30 (varies by market and merchant agreement) WooCommerce plugin: Free (Klarna Payments / Klarna Checkout) Payment methods: Pay in 4 (interest-free), Pay in 30 days, Financing (6-36 months)
What's Genuinely Good
Conversion impact is real. Buy-now-pay-later increases conversion rates measurably — 20-30% for higher-priced items. For stores with average order values above $75, offering installment payments removes the primary objection: "I can't afford this right now."
You get paid upfront. Klarna pays you the full amount immediately. The customer pays Klarna over time. You bear no credit risk.
Klarna's brand recognition matters. Customers specifically look for the Klarna badge when shopping. It's a trust signal similar to PayPal but for the "I want it but can't pay all at once" segment.
What's Not Good
Merchant fees are the highest of any payment method. 3-6% depending on your negotiated rate means you're paying significantly more per transaction than Stripe. At $100K/year, that's potentially $6,000 vs. $3,200 with Stripe.
It encourages consumer debt. This is an ethical consideration, not a business one. Klarna makes it easy for customers to buy things they can't afford. Late payment fees and interest charges (on financing products) fall on your customers.
Klarna disputes are aggressive. Similar to PayPal, Klarna's dispute resolution favors customers. Chargebacks and returns through Klarna can be more expensive than direct card chargebacks.
Verdict: Offer as an option alongside Stripe, not as a replacement. The conversion lift justifies the higher fees for stores with AOV above $75. Below that, the math doesn't work.
Local and Regional Gateways
Don't underestimate local payment methods. In many markets, they're more popular than credit cards.
Netherlands: iDEAL (via Stripe or Mollie) — used for 60%+ of online payments. Not offering iDEAL to Dutch customers is leaving money on the table.
Germany: Sofort/SEPA, Giropay, and Klarna dominate. Credit card usage is lower than in the US/UK.
Scandinavia: Klarna, Swish (Sweden), Vipps (Norway), MobilePay (Denmark). Mobile payment apps are the norm.
UK: Open Banking payments are growing. Direct bank-to-bank transfers with lower fees than cards.
Australia: Afterpay is dominant in BNPL. POLi for direct bank transfers.
For international stores, Mollie (€0.25 per transaction for most methods) is worth considering as a gateway that natively supports European payment methods. The WooCommerce integration is clean, and the pricing is transaction-based with no monthly fees.
My Recommended Payment Stack
US-only store: Stripe (primary) + PayPal (secondary) + Klarna (for AOV >$75). Three options cover the vast majority of US shoppers.
European store: Stripe (cards + Apple Pay + Google Pay) + Mollie (local payment methods) + Klarna. This covers credit cards, bank transfers, and installments across European markets.
US store with physical retail: Square (primary for both online + in-person) + PayPal (secondary online). Unified inventory and reporting.
Global store: Stripe (most markets) + PayPal (trust signal globally) + local gateway for primary market (Mollie for EU, etc.).
Checkout Optimization Tips
Offer at least two payment options. Conversion increases measurably with each additional payment method — up to about 4 methods, after which the UI becomes cluttered.
Put the most popular option first. For most WooCommerce stores, cards (via Stripe) are the most used, followed by PayPal, followed by BNPL. Order your payment options accordingly.
Enable express checkout. Apple Pay, Google Pay, and PayPal Express on the product page and cart page — not just at checkout. Let customers pay in two taps from wherever they are in the buying process.
Show security badges. SSL lock, payment provider logos, and "secure checkout" messaging reduce anxiety. Especially important for new stores without established brand trust.
The payment step is where you either complete the sale or lose it. Everything else in your store — product search, performance, AI cart filling — leads to this moment. Make sure your payment stack doesn't become the bottleneck.
List AI adds AI-powered cart filling to WooCommerce stores — getting customers to checkout faster with complete orders. See how it works.