There are plenty of factors to take into consideration when selecting a payment gateway for your membership site. For this post, I’m going to explore the gateways that do not require a separate merchant account.

I’ll cover a few factors including: Transaction/Fixed Fees, Settlement/Payout, Chargebacks & Disputes, and Ease of Use & Issues.

A quick note: was formerly a payment gateway only option, requiring the setup of a separate merchant account. They have expanded their offering to include a Pricing Plan (combined) option. This is the only option compared in this post. You can (potentially) get a better fee structure by using as your Payment Gateway only with a third party Merchant Account. See our reseller pricing here »

Comparing based on transaction fees.

These are the published fees for US-based companies processing transactions over $3,000 USD per month. To see the gateway fees for your country, please check with the gateway directly.

This pricing was last updated on 10/6/2016. Current pricing may vary; please check with the gateway before registration to confirm current fees.

Gateway Transaction Fee Monthly Fee Recurring Billing Fee
Stripe, 2Checkout, Braintree1,
PayPal Express & PayPal Standard
$0.30 + 2.9% $0 $0
PayPal Payments Pro $0.30 + 2.5% $30 $10
Authorize.net2 Pricing Plan only $0.30 + 2.9% $25 $0

1 Braintree currently offers free processing on your first $50,000 in gross transactions.
2 charges a $49 set up fee.

So, what does this look like for a site with monthly sales of 1,000 units at $20/unit?

Stripe, 2Checkout, Braintree,
PayPal Express & PayPal Standard
PayPal Payments Pro
Sales $20,000 $20,000 $20,000
Fees (880) (840) (905)
Revenue $19,120 $19,160 $19,095

The Verdict: There is not a huge difference when comparing gateways simply based on transaction and monthly fees. Let’s keep digging…

Getting your cash.

Each gateway has their own payment transfer or settlement timeframe. This is the period of time between when the customer’s payment is accepted on your site and when the cash is deposited into your bank account.

For Stripe, 2Checkout, Braintree and

The payout options vary a bit below, but in most cases funds are automatically deposited into your linked savings or checking account. Here’s a rough schedule of the payment transfer timeframe:

Gateway Timeframe
Stripe Your transfer schedule can be configured within your account either daily, weekly, monthly or manually [more]
2Checkout Via Electronic Funds Transfer to Wire Transfer: Funds are released weekly on a Thursday, This can be extended to 2 weeks or longer to reduce fees [more]
Braintree Credit card payments are generally deposited into your bank account you within 2-5 business days [more] Credit card payments are settled daily and deposited into your bank account within 2-3 business days

Note that even though your gateway submits the transfer to your bank account, most banks only process the deposit on business days.

For PayPal Express, Standard and Payments Pro

When using PayPal, the funds are automatically deposited to your “PayPal Account” when the payment is approved. You must manually log in to your PayPal account to initiate a withdrawa to your linked bank account. This can be done via a few methods:

  • Requesting a direct deposit to your checking account. Your request will be processed immediately, and your money will arrive in your checking account in 3-4 business days.
  • Requesting a personal check from PayPal. The check will arrive at your home by U.S. Mail within 1-2 weeks.
  • Withdrawing funds immediately using the PayPal Debit Card. Your PayPal balance is immediately accessible via this method. Your card can be use everywhere Debit MasterCard is accepted or withdraw cash from any ATM in the world that displays the MasterCard®, Maestro® or Cirrus® acceptance marks – but note that fees may apply when withdrawing cash at an ATM.

The Verdict: It’s probably a personal bias, but I am not a fan of having to log in to PayPal to initiate a transfer to my business bank account. I tend to swing in favor of the gateways that have an automatic settlement timeframe. Stripe is the most flexible option in this respect.

That said, having a PayPal option at checkout can add significant revenue to your site (I’ll cover this later in the post).

Chargebacks, disputes, claims, inquiries, oh my!

A chargeback or payment dispute is when a customer denies the payment. Even if you offer a refund policy, there will be some number of customers that decide to simply call their bank and initiate a dispute. This could be because of (actual) fraud, dissatisfaction with their purchase, or they are just a despicable person who got their goods and don’t want to pay for it.

Chargebacks/disputes deserve a whole article by themself, but the basic fees are compared below. For each gateway, there is a unique process for managing disputes. You can occasionally avoid the fee by simply issuing a refund, but if a full fraud claim was made, the fee is unavoidable.

Gateway Chargeback Fee Notes
Stripe $15 Disputed charges are withheld from your next settlement [more]
2Checkout $20 Disputed charges are withheld from your next settlement [more]
Braintree $15 Disputed charges are withheld from your next settlement [more]
PayPal $0.30 Disputed charges are immediately frozen in your PayPal balance; The fee for refunding a dispute/claim is the fixed fee portion of your transaction fee ($0.30); The fee for claims escalated to chargeback is $20 [more] $25 Disputed charges are withheld from your next settlement [more]

You may be able to fight a dispute by submitting evidence that the charge wasn’t fraudulent. You may even be able to contact a customer to have the dispute withdrawn. In my experience, fighting a dispute is rarely successful, and contacting the customer has rarely been a success.

The Verdict: Chargebacks stink, but if I were to select a gateway on this factor alone, the PayPal options are the most favorable. With PayPal, the customer can simply log in to their PayPal account and initiate a claim or dispute WITHOUT calling it a full on “chargeback”. In our own business, PayPal disputes are rarely escalated to chargebacks and the fees are simply the $0.30 fixed transaction fee portion of the payment.

Ease of Use, Issues, Management

Here’s a “synopsis” of some common hiccups we see for the payment gateways covered in this post.

Stripe and Braintree Everything Else
Checkout will fail if your site has JavaScript errors (caused by other plugins, your theme, etc.) Checkout may not fail if you have JavaScript errors, but you should fix them anyway.
Braintree Everything Else
Braintree requires you to create a plan in their dashboard for each PMPro level. Individual plans are created for each order at checkout through the APIs.
PayPal Standard Everything Else
Unknown delay in receiving successful payment notification via IPN (delayed membership activation = frustrated users) Immediate notification of payment success/failure (immediate membership activation = happy members!)
More about PayPal Standard and IPN
PayPal Express, PayPal Standard, 2Checkout Stripe, Braintree, PayPal Payments Pro,
Checkout is a three step process so there is a higher rate of “cart abandonment” or failure at the third party site (frustration or distraction = lost sales) Checkout happens in a single step on your site, and full billing address may be optional (fewer fields and faster checkout = more sales)
PayPal Express, PayPal Standard, 2Checkout Stripe, Braintree, PayPal Payments Pro,
SSL not required SSL required
More about security and PCI Compliance

Using more than one payment gateway.

We offer an add on to add PayPal Express as an option at checkout. This is included by default with the PayPal Payments Pro gateway, so the add on is not necessary if you have selected this gateway.

Many membership site owners find an increase in sales when offering the PayPal option with this add on. Having a PayPal payment option adds credibility and trust to your site and gives you access to over 100 million active online buyers who look for the PayPal way to pay.

Selecting a gateway… continued.

In addition to the various topics covered in this post, you may have unique considerations for your membership site’s gateway selection. You may be limited by your currency or location, or you may be comparing gateways based on security or whether they offer on-site or off-site checkout. You may have a large number of international customers that require different payment methods.

So, just remember that the comparisons above may not be the most important factors in your selection process. If there are other key features in your decision making process, check with the payment gateway directly and learn more about their offering.

Get more information, setup instructions or sign up.

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Agreed, very helpful overview and comparison!

One comment: Pretty sure that PayPal now offers an automatic sweep option that does fund transfers to your bank account on a schedule you can configure.

You are correct – it isn’t an option for every account but here are the steps to get “Auto Sweep” enabled on your PayPal account (daily transfer; 3 to 4 business days for the money to post to your bank account). You must have a Premier account or Business PayPal account, have a bank account linked to your PayPal account and not have a withdrawal limit.

– Go to and log in to your account, Click ‘Profile’ near the top of the page, Click “My money,” Hover over “More” near “PayPal balance,” and then click “Auto Sweep,” Click ‘Edit’ and Click ‘Yes,’ select the bank you want your money transferred to, and click ‘Save.’

If you don’t see the option, try contacting PayPal directly for information/setup.

Update: Sellers now cover the whole PayPal fee too. In my experience I think I’ve only ever won one chargeback dispute with PayPal, despite being able to provide unequivocal evidence of digital purchases.
So I just refund now, otherwise you end up paying more.

Bear in mind foreign transaction and withdrawal fees. Some processors convert at source like Stripe. Others like PayPal charge a foreign transaction fee, and then offer an terrible exchange rate to exchange/withdraw the currency.

Kimberley, an excellent review of the various payment gateway options.

I would like to clarify on one point you made on PayPal disputes. When a buyer raises a dispute (typically on a subscription payment they forgot to cancel in time) and the vendor accepts the claim then there is no chargeback levied. In my 10 years with PayPal and thousands of transactions, I get about 1 dispute a quarter and none of these has resulted in an actual chargeback fee.

So, although you are absolutely correct, the table gives the impression that the dispute costs for PayPal are similar to the alternatives whereas in reality they are not. A comparable figure for PayPal disputes would be zero. The $20 fee is only paid in the unlikely event of an escalation and the dispute later being resolved in favor of the buyer.

With Stripe they take the $15 fee and reverse the payment when the dispute is raised. Even if the buyer admits an error and withdraws the dispute it can take up to 60 days to get your money back. And you need to jump through a whole bunch of paperwork and submissions. Therefore it generally makes commercial sense to write off the $15 and just get the customer to make a new purchase.

PayPal is so much better as it can all get resolved online in a couple of days without incurring any fees.

Thank you for this feedback on PayPal – I updated the post as recommended so it is more clear that most PayPal claims are simply the fixed-fee amount of the transaction.

I second the comment that the majority, if not all, PayPal “claims” rarely escalate to chargeback. In all of my cases, I simply accept and close the case, processing a refund immediately. Fighting a chargeback, specifically for a virtual product, has never been a success for me.

If you do experience this, I should note that site owners should make sure to remove the user’s membership level under the “Edit User” page, and cancel the associated subscription (if present) so there is no ongoing issue.

I’ve always found it very easy to integrate various gateways with pmpro. Your product is very flexible that way. Has there been any progress or ideas for integrating with Mijireh Checkout? I love their solution and it’s PCI compliant too. Any thoughts would be great!

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