Paystack vs PayPal: Features, Fees, and Hidden Charges Compared

Read this to find Out Why I Switched From PayPal to Paystack (And Never Looked Back)

Can’t withdraw your funds? Client refusing to pay because you don’t have PayPal? Ah, my guy, I know the struggle!

Why I Switched From PayPal to Paystack (And Never Looked Back)

When I started freelancing over 10 years ago, getting paid was harder than getting a visa appointment. I tried PayPal Nigeria—rejected.

Payoneer? Messy fees.

Even Flutterwave had some wahala at the time. It got so frustrating that I nearly quit.

But then, I found Paystack. Game changer! Although I still lost some clients because they only wanted PayPal or Zelle (which barely works in Nigeria),

Paystack helped me secure more local and international payments without the usual headache.

So, which one should you use—Paystack or PayPal?

Let’s dive in and find out!

What You Will Learn

• The major differences between Paystack and PayPal

• Which payment gateway is better for Nigerians

• Pros and cons of both platforms

• Which one is cheaper and has better features

• The best alternatives if neither works for you

Table of Contents

1. What is Paystack?

2. What is PayPal?

3. Who is PayPal for?

4. Who is Paystack for?

5. Pros of Paystack

6. Cons of Paystack

7. Pros of PayPal

8. Cons of PayPal

9. Battle of Features: Paystack vs PayPal

10. Pricing: PayPal vs Paystack, Which is Cheaper?

11. Differences between PayPal and Paystack

12. The Top 10 Best Alternatives to Paystack and PayPal for Nigerians

13. FAQ Section

14. Conclusion

    
    

Let's Explain Both Paystack and PayPal

What is Paystack Payment Gateway?

Paystack is a Nigerian payment gateway that allows businesses to accept payments online.

It’s widely used in Nigeria and other African countries. Unlike PayPal, it supports local bank transfers, mobile money, and card payments.

Paystack was founded in 2015 by Shola Akinlade and Ezra Olubi. It quickly became the leading payment gateway in Nigeria, helping businesses process online payments seamlessly.

In 2020, it was acquired by Stripe for over $200 million.

What is PayPal Payment Gateway?

PayPal is one of the world’s most popular online payment platforms. It allows users to send and receive money globally.

However, in Nigeria, its full features are not available. Most Nigerians can only send money, not receive it.

PayPal was founded in 1998 and became a global giant in digital payments.

It was acquired by eBay in 2002 but later became independent. Despite its success, PayPal has strict restrictions on Nigerian users.

Who is PayPal for? (And Why You Might Need It Too)

PayPal is one of the most widely used online payment processors in the world, but who exactly should be using it?

1. Freelancers & Solo Entrepreneurs: If you’re a freelancer or run a one-person business, PayPal makes it incredibly easy to accept payments from clients—especially if you work with international clients.

2. E-commerce Businesses: Running an online store? PayPal is designed for global e-commerce businesses, making it easy to process transactions securely.

3. SaaS & Subscription-Based Businesses: If you run a software business (SaaS) or offer subscription-based services, PayPal provides built-in tools for recurring billing.

4. Digital Product Creators: Selling eBooks, online courses, templates, or any digital product? PayPal allows you to accept payments instantly and withdraw funds quickly, provide secure transactions with buyer and seller protection, sell to a broad international audience with trusted payment processing

5. Nonprofits & Fundraisers: PayPal is widely used by nonprofits and fundraising platforms due to its easy donation processing and global reach.

If you’re running a charity or crowdfunding campaign, PayPal is a solid choice for collecting and managing funds.

6. Marketplaces & Platforms: PayPal is ideal if you’re building a multi-vendor marketplace. With PayPal for Marketplaces, you can easily split payments between different sellers and automate transaction management.

Who is Paystack for? (And Why You Might Need It Too)

Paystack is one of the most popular payment processors in Africa, but who exactly should be using it?

1. Freelancers & Solo Entrepreneurs: If you’re a freelancer or run a one-person business, Paystack makes it incredibly easy to accept payments from clients.

2. E-commerce Businesses: Running an online store? Paystack is designed for African e-commerce businesses, making it easy to process transactions securely.

3. SaaS & Subscription-Based Businesses: If you run a software business (SaaS) or offer subscription-based services, Paystack simplifies recurring billing.

4. Digital Product Creators: Paystack allows you to:, accept payments instantly and receive payouts directly to your bank, provides secure payment processing with fraud protection, and also sell to a broad audience across Africa with multiple payment options

5. Nonprofits & Fundraisers: Paystack also supports nonprofits and donation-based platforms looking to raise funds locally and internationally.

6. Marketplaces & Platforms: Paystack is perfect if you’re building a multi-vendor marketplace. With Paystack Split Payments, you can easily distribute funds among different sellers on your platform, making it easier to manage payments without manual processing.

Advantages and Disadvantages of Both Paystack and PayPal

Pros of Paystack:

Here are the top advantages of using Paystack:

1. Easy Setup & Integration: One of the biggest advantages of Paystack is how easy it is to set up. Even if you don’t have coding knowledge, you can still create a Paystack payment page and start receiving payments within minutes.

2. Multiple Payment Options: Paystack gives businesses the flexibility to accept payments in various ways, making it easy for customers to pay using their preferred method.

3. Fast Payouts & Settlements: Unlike some payment processors that take several days to process payouts, Paystack offers fast settlement times. For businesses in Nigeria and other supported African countries, funds are typically settled within 24 to 48 hours.

4. Advanced Fraud Protection: Security is a major concern for any online business, and Paystack takes it seriously. With Paystack, businesses can feel confident about protecting themselves and their customers.

5. Subscription & Recurring Payments: For SaaS businesses, membership sites, or any business that offers subscription-based services, Paystack has a built-in recurring billing system.

6. Customizable Payment Pages: With Paystack, businesses can create custom payment pages that allow customers to make payments effortlessly. This is particularly useful for freelancers, consultants, and small businesses that want to accept payments without a complicated setup.

7. Competitive & Transparent Pricing: Paystack has one of the most competitive transaction fees in the industry, making it a cost-effective choice for businesses. For local transactions, Paystack charges 1.5% + ₦100 (capped at ₦2,000), while international transactions attract 3.9% + ₦100.

There are no hidden fees, ensuring businesses can accurately calculate their revenue.

8. Excellent Customer Support: Many businesses praise Paystack’s customer service for being responsive, knowledgeable, and helpful. They offer: 24/7 email support, a help center with detailed guides, and a developer-friendly support team for technical queries

Cons of Paystack (Redflags to Consider Before Using It)

While Paystack has plenty of advantages, it also has a few downsides that businesses should consider before fully committing to the platform.

1. Limited Country Availability: One of the biggest drawbacks of Paystack is that it’s only available in a few African countries, including Nigeria, Ghana, South Africa, and Kenya. If you operate in a country where Paystack isn’t supported, you’ll have to look for alternative payment solutions.

2. Higher Fees for International Transactions: While Paystack’s local transaction fees are competitive, international payments come with a higher fee of 3.9% + ₦100. For businesses that rely on a global customer base, these fees can add up quickly, reducing profit margins.

3. No Built-In Refund System: Unlike some competitors, Paystack doesn’t offer a built-in refund system. If a customer requests a refund, merchants have to process it manually through their bank, which can be time-consuming and inconvenient.

4. Limited Multi-Currency Support: Although Paystack allows international transactions, it doesn’t support a wide range of currencies. Currently, businesses can only accept payments in NGN, GHS, ZAR, and KES.

This can be a limitation for businesses that want to expand into new markets with different currencies.

5. Occasional Downtimes: Like any online service, Paystack is not immune to technical issues. Some users have reported occasional downtimes, which can temporarily disrupt payment processing.

While these instances are rare, businesses that rely heavily on real-time transactions may find this frustrating.

Pros of PayPal (Why Millions Trust It)

Here are the key advantages of using PayPal:

1. Global Acceptance – PayPal is available in over 200 countries and supports multiple currencies.
   

2. Strong Security Features – Advanced encryption, fraud detection, and buyer protection.
   

3. Easy Integration with Online Stores – Compatible with Shopify, WooCommerce, and other platforms.
   

4. Fast & Convenient Transactions – Quick money transfers without the need for bank details.
   

5. Multiple Payment Options – Accepts credit cards, debit cards, bank transfers, and PayPal balance.
   

6. Mobile-Friendly Payments – Pay easily with PayPal on mobile devices and apps.
   

7. Business-Friendly Features – Invoicing, subscriptions, and PayPal Business tools for entrepreneurs.
   

8. Buyer & Seller Protection – Covers eligible transactions against fraud and disputes.
   

9. Pay Later & Installments – Offers flexible payment options for buyers.
   

10. No Monthly Fees for Personal Accounts – No hidden costs unless you use advanced business services.

    
    

Cons of PayPal (Where It Falls Short)

While PayPal is a great payment platform, it’s not perfect. Here are some of its drawbacks:

1. High Transaction Fees – PayPal charges higher fees compared to some competitors, especially for international transactions.
   

2. Account Freezing & Limitations – PayPal can freeze or limit accounts without warning, causing delays in accessing funds.
   

3. Slow Withdrawal Times – Depending on your country, withdrawing funds to a bank account can take several business days.
   

4. Strict Dispute Resolution – PayPal often sides with buyers in disputes, making it risky for sellers.
   

5. Currency Conversion Fees – PayPal’s exchange rates are often unfavorable, leading to additional costs for international transactions.
   

6. Limited Customer Support – Users frequently report difficulties in reaching customer service for urgent issues.

   
   

Battle of Features: Paystack vs PayPal - Comparison

Paystack Features:

• Local payment processing for African businesses.

• Supports multiple payment methods (cards, bank transfers, USSD, mobile money).

• Seamless integration with eCommerce platforms.

• Lower transaction fees compared to PayPal.

• Strong fraud prevention tools.

• Supports subscription and recurring payments.

• Instant payouts for merchants.

PayPal Features:

• Global payment processing in over 200 countries.

• Accepts credit/debit cards, bank transfers, and PayPal balance.

• Easy integration with international eCommerce platforms.

• Strong security and buyer protection.

• Allows for Pay Later and installment options.

• Business-friendly features like invoicing and mass payouts.

Comparing Paystack's Features to PayPal's Features:

1. Availability: Paystack is ideal for African businesses, while PayPal supports global transactions.

2. Payment Methods: Paystack supports mobile money and USSD, making it more suited for African users, while PayPal offers Pay Later options and global currency support.

3. Transaction Fees: Paystack generally has lower fees for local payments, whereas PayPal charges higher fees, especially for international transactions.

4. Security & Buyer Protection: Both platforms have strong security, but PayPal provides more extensive buyer protection.

5. Ease of Integration: Both are easy to integrate with online stores, but PayPal has wider global eCommerce compatibility.

6. Payout Speed: Paystack provides instant payouts, while PayPal withdrawals may take longer.

   
   

If you’re running a business in Africa, Paystack is a better choice for local transactions.

However, if you need global reach and buyer protection, PayPal may the better option.

Finally, I Compared Pricing: Which is Cheaper? Paystack or PayPal?

Paystack Pricing:

• Local transactions: 1.5% + ₦100 (capped at ₦2,000)

• International transactions: 3.9% + ₦100

• No hidden fees for withdrawals or chargebacks.

PayPal Pricing:

• Domestic transactions: 2.9% + fixed fee

• International transactions: 4.4% + fixed fee

• Additional fees for currency conversion and chargebacks.

My Final Verdict on Which is Cheaper between Paystack and PayPal: Paystack is generally cheaper for African businesses processing local payments, while PayPal is costlier due to higher international fees and currency conversion charges.

Top 10 Online Payment Gateway Alternatives for Nigerians

Here’s a list of 12 great PayPal and Paystack alternatives for Nigerians, including both global and local payment gateways:

1. Stripe: A powerful international payment gateway similar to PayPal, but currently not fully available for Nigerian businesses without workarounds.
   

2. Flutterwave: A top Nigerian alternative to Paystack, offering seamless online payments, multiple currencies, and mobile money integration.
   

3. Monnify: A Nigerian-based payment platform specializing in bank transfers, making it ideal for businesses that want direct settlements.
   

4. VoguePay: A local payment processor that allows individuals and businesses to receive payments via cards, bank transfers, and crypto.
   

5. Remita: Popular in Nigeria for bulk payments, salary disbursements, and government-related transactions.
   

6. Chipper Cash: A mobile-based cross-border payment app that allows Nigerians to send and receive money across Africa and beyond.
   

7. Payoneer: A great PayPal alternative for Nigerians who need international payments, with support for USD, EUR, GBP, and more.
   

8. OPay: A fast-growing Nigerian fintech offering mobile payments, banking, and business payment solutions.
   

9. Quickteller: Operated by Interswitch, Quickteller allows businesses to receive payments and users to pay bills, transfer funds, and buy airtime.
   

10. Paga: A well-established Nigerian fintech that provides mobile money services and business payment solutions.
    

11. Klasha: A fintech company making it easier for Nigerians to pay international merchants while supporting cross-border transactions.
    

12. Rave by Flutterwave: A specialized Flutterwave service offering seamless API integration for businesses that want to receive payments globally.

Frequently Asked Questions on Paystack and PayPal

Is Paystack the same as PayPal?

No, Paystack and PayPal are different payment platforms. PayPal is a global online payment service used in over 200 countries, while Paystack is an African-focused payment gateway primarily used in Nigeria, Ghana, Kenya, and South Africa.

Can I receive USD with Paystack?

Yes, businesses in Nigeria can receive USD payments through Paystack, but they need to have a domiciliary (USD) bank account linked for withdrawals.

What platform is better than PayPal?

The best alternative depends on your needs. Stripe, Payoneer, and Wise (formerly TransferWise) offer better features for freelancers and international transactions, while Paystack and Flutterwave are better for Nigerian businesses.

Who is PayPal's biggest competitor?

PayPal's biggest competitor globally is Stripe. Other major competitors include Payoneer, Wise, Square, and Apple Pay.

Which app works like PayPal in Nigeria?

Apps like Paystack, Flutterwave, Chipper Cash, and OPay work similarly to PayPal for online payments and money transfers in Nigeria.

Can I link Paystack to PayPal?

No, Paystack and PayPal are separate platforms and cannot be directly linked. However, you can use them separately for different transactions.

Which payment platform is best?

The best platform depends on your needs:

• Best for Nigerian businesses: Paystack, Flutterwave, Monnify

• Best for freelancers: Payoneer, Wise, Chipper Cash

• Best for international transactions: Stripe, PayPal

Which country has the best PayPal?

PayPal works best in countries like the United States, Canada, the UK, and Australia, where users have full access to all PayPal features, including receiving and withdrawing funds easily.

Is Payoneer better than PayPal?

For freelancers and international businesses, Payoneer is often better than PayPal because:

• Lower transaction fees

• Better exchange rates

• Ability to withdraw in multiple currencies, however, PayPal is still more widely accepted for online purchases and payments.

What is a perfect alternative to PayPal for Nigerians?

Paystack is a great alternative to PayPal for African businesses, as it provides reliable local payment solutions without the usual restrictions that come with international payment processors.

Conclusion - Paystack or PayPal? Which is Right for You?

If you’re in Nigeria and need a reliable payment gateway, Paystack is a solid choice. But if you deal with international clients who insist on PayPal, you may need a workaround.

What do you think? Have you used PayPal or Paystack? Share your experience in the comments!

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Simon Taki Zaku

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For the IbiFoundry.com.ng E-magazine.

ibifoundry@gmail.com; simonzakucom@gmail.com.