Stripe vs PayPal Fees for Digital Products: Net at 5 Prices

If you’re about to put a buy button on an ebook, a template pack or a course, the usual “2.9% versus 3.49%” comparison doesn’t tell you what lands in your account. For digital products the price of the thing decides the winner, because a fixed fee of 30 or 49 cents is a very different bite out of $5 than out of $299. Below is what each processor leaves you at five common price points, computed from both official US fee pages on September 21, 2026, followed by the costs that show up later: disputes, refunds, foreign buyers, payout timing and sales tax.

I’m not licensed to give financial or tax advice, and this isn’t either one. Fees change, so check the two fee pages linked in the sources before you commit. There are no affiliate links in this post.

For any other price, the digital product fee calculator runs the same rates.

What you keep at $5, $10, $29, $99 and $299

All rates are for US accounts, as of September 2026. Stripe lists 2.9% + $0.30 for domestic cards, plus 1.5% for international cards and another 1% when currency conversion is required. PayPal’s US merchant page lists three different domestic online rates: 3.49% + $0.49 for PayPal Checkout and Venmo, 2.99% + $0.49 for standard credit and debit card payments, and 2.89% + $0.29 for Advanced Credit and Debit Card Payments. International commercial transactions add 1.50%.

Each cell shows what you keep on one sale, with the effective fee in parentheses. A script did the arithmetic, rounding each fee to the nearest cent, then cross-checked every fee a second way in integer cents.

Three things stand out.

First, the gap between Stripe and the PayPal button is widest where digital products usually live. At $10 it is 25 cents a sale, which is 2.5% of your revenue. At $299 it is $1.96, about 0.7%.

Second, PayPal is not one rate. A buyer who pays with a PayPal balance costs you 3.49% + $0.49, while a card run through PayPal’s advanced card integration costs a few cents less than Stripe at every price in the table. Most comparison posts pick one PayPal number and ignore the other two. If someone tells you PayPal is cheaper or more expensive, ask which line they mean.

Third, nothing here is cheap at $5. Every standard domestic rate takes between 8.6% and 13.2% of the sale.

My default for a one-person shop is Stripe for cards, with a PayPal button added only if your buyers ask for it. The rest of this post is the list of exceptions.

Why the fixed fee matters more than the percentage

On a $5 sale through Stripe, the 2.9% part of the fee is about 15 cents and the fixed part is 30. Two thirds of the cost has nothing to do with the percentage everyone argues about. With PayPal Checkout the split is 17 cents and 49.

That is why bundling works on paper. Sell one $29 bundle instead of three $10 items and Stripe’s take drops from 5.9% to 3.9%, because you pay the fixed fee once instead of three times.

I sold an ebook for a while and shut it down when sales stopped the moment I stopped paying for ads. Processing fees were not what ended it. I bring it up because it is easy to spend a weekend comparing basis points on a product that has no steady demand yet, and the second problem is the expensive one. If that’s where you are, how to sell an ebook without ads and the five-cause diagnostic for an ebook that stopped selling will do more for you than this table.

If your price is under $10, though, fix the fee first.

PayPal Micropayments: where it wins and where it stops

PayPal’s fee page says you may apply to receive Micropayments pricing for certain lower value transactions, at 4.99% plus a fixed fee of $0.09 in US dollars as of September 2026. It is not automatic. An account that never applied pays the standard lines above.

Set the Micropayments formula equal to each standard rate and you get the exact price where it stops being the cheaper option:

So a $5 printable nets $4.66 on Micropayments against $4.55 on Stripe. Eleven cents sounds small. On a $5 item it is 2.2% of the price.

The catch is the other direction. On a $99 course the Micropayments rate costs $5.03, against $3.17 on Stripe and $3.95 through PayPal Checkout. PayPal’s fee page mentions both Dynamic and Static Micropayments without spelling out the difference, so before you apply, ask PayPal in writing how the rate would be applied to your higher-priced sales.

If everything you sell is under $10 and your buyers already like PayPal, apply. If your catalog mixes $7 and $99 products, don’t, unless PayPal confirms the low rate only touches the small ones.

International buyers and currency conversion

Digital products cross borders without you doing anything, so these surcharges arrive whether you planned for them or not.

Stripe adds 1.5% for an international card and 1% more if currency conversion is required. That makes the worst case 5.4% + $0.30, the third row of the table. PayPal adds 1.50% to international commercial transactions, and its fee page defines international as sender and receiver being registered in different markets.

Currency conversion is where several comparison posts overstate PayPal’s cost. The fee page lists a 4.00% spread for paying for something in another currency or sending money, which are things a buyer does. The line for “all other transactions”, which is where converting money you received falls, is 3.00% above the exchange rate.

Three percent is still three times Stripe’s 1%. As a rough illustration, take PayPal Checkout with an international buyer, keep the fixed fee at the $0.49 US-dollar equivalent, and apply the 3% spread to what’s left after fees. A $29 sale nets about $26.25 and a $99 sale about $90.76, against $27.13 and $93.35 on Stripe with conversion. Treat the PayPal pair as estimates, because the fixed fee differs by currency (€0.39 for euros, £0.39 for pounds) and the exchange rate moves.

If you expect foreign buyers on PayPal, price in US dollars. The buyer’s side handles the conversion and you stay on the 4.99% + $0.49 line.

Disputes, refunds and payout timing

A digital file can’t be returned, which makes refunds and disputes a bigger share of the real cost than they are for someone shipping boxes.

Here is what the official docs say, collected September 21, 2026.

Run that against a cheap product. A disputed $5 sale on Stripe pulls $20 out of your balance: the $5 plus the $15 fee. At $4.55 net per sale, you need five more sales to cover it. Fight it and lose, and the debit is $35. On a $29 product the same lost dispute costs $44.

PayPal defines high volume as a dispute rate of 1.5% or more with more than 100 sales transactions in the previous three full months. The rate is measured by disputed dollar amount against net sales for the previous three calendar months. With a single-price product, two disputed sales out of 120 is already 1.7%.

For intangible goods, PayPal’s Seller Protection terms ask for compelling evidence that the item was delivered, such as a record showing the date it was sent electronically to the recipient’s address, or that the recipient received or accessed it. Whatever delivers your files should log the email address, the timestamp and the download. Set that up before the first sale, not after the first claim.

Under $15, refund on the first complaint. The arithmetic never favors the fight.

Sales tax and VAT: processor or merchant of record

Stripe and PayPal, in their standard form, are payment processors. You are the seller of record, and the sales tax, VAT or GST obligations that come with selling a download to someone in another state or country belong to you.

Stripe Tax helps with the calculating and collecting. The no-code tier is listed at 0.5% per transaction where you’re registered to collect, as of September 2026. The filing doc is blunt about the remainder: you must file and remit the tax you collect for every location where you’re registered, with filing available through partners at additional cost. PayPal’s checkout settings let you set up domestic tax rates by state or zip code and international rates by country. That documentation covers calculating at checkout and nothing about filing.

A merchant of record works differently. It becomes the legal seller, so the indirect tax compliance moves to it.

Stripe now sells this itself. Managed Payments makes Stripe the merchant of record and handles sales tax, VAT and GST compliance in more than 80 countries, along with fraud prevention, dispute management and transaction-level customer support. It costs 3.5% per successful transaction on top of the normal payments fees as of September 2026. Supported categories include e-books, digital images and artwork, software, and online courses; physical goods, professional services and anything involving human intervention such as live 1-1 coaching are out, and access depends on an eligibility review.

Priced out, that is row four of the first table. On a $29 product you keep $26.84 instead of $27.86, so $1.02 a sale moves the indirect tax compliance for that sale to Stripe. I did not find a merchant-of-record option on PayPal’s US fee page.

If nearly all your buyers are in the US and you sell a few hundred dollars a month, plain processing plus a tax-settings check is usually enough. If you sell into the EU or UK in real numbers, price the 3.5% against what a VAT filing service and your own hours would cost before you dismiss it. For how the income side works, see how creators pay taxes and the other money ops guides.

Which one to pick

Under $10: PayPal with Micropayments approved if your buyers already use PayPal, otherwise Stripe. Avoid standard PayPal Checkout at this price; it takes 13.2% of a $5 sale.

From $10 to about $100: Stripe for cards. Adding a PayPal button costs you 25 to 78 cents more on each sale that goes through it, and nothing on the sales that don’t, so offering both is a fair trade if customers ask.

Above $100: the domestic fee gap shrinks to well under 1%. Pick on international mix, tax handling and which checkout your delivery tool supports.

Either way, expect your gross sales to be reportable on Form 1099-K, which covers payment card and third party network transactions. The IRS says the form’s gross amount isn’t adjusted for fees, credits or refunds, and lists the federal threshold as more than $20,000 and more than 200 transactions. Keep your own record of fees paid so you can deduct them. 1099-NEC vs 1099-K for creators covers how that form fits with the others.

Before you build anything, take your real price and run it through two formulas: price × 0.029 + 0.30 and price × 0.0349 + 0.49. Multiply the difference by the sales you honestly expect this year. If the answer is under $50, choose on checkout fit and move on.