Paymill vs Stripe vs PayPal

Choosing a payment processor is one of the most important decisions for any online business. Paymill, Stripe, and PayPal represent three different approaches to online payment processing, each with distinct strengths, target markets, and pricing models. Understanding their differences helps businesses select the right solution for their specific needs.

Stripe has become the dominant payment platform for developers and technology companies. Founded in 2010 by Irish brothers Patrick and John Collison, Stripe provides a comprehensive suite of payment APIs that handle credit card processing, subscription billing, invoicing, fraud detection (Stripe Radar), and multi-currency support. Its developer-first approach means that integration is done primarily through well-documented APIs and client libraries available for virtually every programming language. Stripe supports Apple Pay, Google Pay, SEPA Direct Debit, Klarna, and dozens of other payment methods. Its pricing in Europe is typically 1.5% + 0.25 EUR for European cards and 2.5% + 0.25 EUR for non-European cards.

PayPal, founded in 1998 and now one of the most recognized financial brands globally, takes a different approach. With over 400 million active accounts worldwide, PayPal's greatest strength is consumer trust and recognition. Many customers feel more comfortable paying through PayPal than entering their credit card details on an unfamiliar website. PayPal offers both a redirect-based checkout (where users leave the merchant site to complete payment on PayPal) and an on-site checkout experience through Braintree, which PayPal acquired in 2013. PayPal's fees are typically around 2.49% + 0.35 EUR for domestic transactions in Europe, though rates vary by volume and region.

Paymill was a German payment processor founded in 2012, explicitly modeled on Stripe's developer-friendly approach but focused on the European market at a time when Stripe had limited European availability. Paymill offered simple API-based credit card and direct debit processing with transparent pricing. However, Paymill ceased operations in 2017 after failing to achieve sustainable growth against increasingly strong competition from Stripe (which had expanded aggressively into Europe) and established players like Adyen. Its closure underscored how difficult it is to compete in the payment processing space without significant scale.

For developers building SaaS applications or online marketplaces, Stripe is generally the strongest choice. Its Connect platform enables complex payment flows including split payments, marketplace fee collection, and multi-party payouts. Stripe Billing handles subscription lifecycle management including trials, upgrades, downgrades, prorations, and dunning (failed payment retry). The quality of Stripe's documentation, SDKs, and developer experience is widely regarded as industry-leading.

PayPal remains essential for businesses that serve a broad consumer audience, particularly in markets where PayPal adoption is high. In Germany, for example, PayPal is the most popular online payment method. Offering PayPal as a checkout option can significantly increase conversion rates because customers can complete purchases without entering card details. Many businesses use both Stripe and PayPal simultaneously, with Stripe handling credit card payments and PayPal offered as an alternative method.

Other notable competitors in the European payment space include Adyen (popular with large enterprises like Spotify, Uber, and eBay), Mollie (a Netherlands-based provider popular with SMEs), and Klarna (which specializes in buy-now-pay-later solutions). Each targets a different market segment and offers unique capabilities.

When evaluating payment processors, key factors to consider include: transaction fees and pricing transparency, supported payment methods (credit cards, SEPA, local methods like iDEAL or Bancontact), payout timing, fraud prevention capabilities, PCI compliance support, quality of developer documentation, subscription and recurring billing features, and customer support responsiveness. For businesses operating across multiple European countries, support for Strong Customer Authentication (SCA) under PSD2 regulations is also essential.

The payment processing landscape continues to evolve rapidly, with open banking APIs, real-time payment networks, and cryptocurrency payment options expanding the choices available to merchants. European-based payment providers like Mollie and Adyen offer an alternative for businesses that prefer geographic diversity in their financial infrastructure rather than depending solely on US-based platforms. The trend is toward offering customers as many payment options as possible, which means most businesses will end up integrating multiple payment providers rather than relying on a single solution.

SEPA, Payment, Klarna, VISA