Payment Service Providers

Braintree vs PayPal: A Detailed Comparison

Introduction to Braintree and PayPal

Braintree and PayPal are payment service providers that allow customers worldwide to accept credit and debit card payments in various formats. These companies appear comparable enough on the surface, and there’s a reason for that. PayPal acquired Braintree in 2013 for a whopping $800 million, and as such, the two companies run on much of the same infrastructure. When considering Braintree vs PayPal, it’s important to understand their distinct features and benefits.

Regardless of their similarities, they are not the same by a long shot. In the following article, we’ll examine the pros and cons of both Braintree and PayPal to determine which offers you the best possible payment solutions for your business. Let’s get started!

A green info symbol.

What is Braintree?

Braintree is a payment gateway platform that integrates into your app or website, making it easy to accept payments. Based in Chicago, the company deals primarily in mobile or web-based transactions for large eCommerce businesses. Braintree also supports recurring billing and allows users to accept various payment options, including credit cards, debit cards, and PayPal balances.

Before its acquisition, Braintree was often utilized by companies needing intricate and highly specific payment solutions. This extends to startups, custom site setups, and companies operating in international markets. For business owners who are looking for their first payment service provider, there’s a lot to like about Braintree. It’s a sturdy, easily customizable, user-friendly system, making it ideal for developers, if somewhat less so for smaller businesses.

An orange info symbol.

What is PayPal?

PayPal, on the other hand, is in an ideal position to lend a helping hand to more modestly scaled eCommerce ventures. What is PayPal, you may be asking? PayPal is one of the most popular payment gateways in the world today — nearly 30% of US consumers report using PayPal and Amazon Pay.[1]Finances Online. “64 Key Online Payments Statistics: 2021 Market Share & Data Analysis –” Accessed on June 4, 2024.

The ins and outs of using PayPal can occasionally prove daunting, more so than a platform like Braintree. In addition to acting as a gateway, PayPal also serves as a payment method for customers. In that sense, it’s incredibly dynamic: business owners can pay vendors, accept customer payments, and use the service as a building block for their business.

A dollar with arrows.

Is Braintree owned by PayPal?

As mentioned earlier, PayPal acquired Braintree back in 2013, meaning Braintree technically exists under the PayPal umbrella. Both services offer similar infrastructural benefits. That said, PayPal and Braintree are unique in ways that are worth unpacking in greater detail.

Depending on your business needs, there are distinct differences between the two that are worth exploring before you decide which option suits you best. Read on to learn more.

Braintree vs PayPal: Feature Comparison

We’ll begin by examining the two platforms’ respective features. Determining your business requirements will help you decide whether Braintree or PayPal is the better option.

Braintree offers incredible customization features through its open API and easy-to-access integration features. For instance, Braintree would be a great fit if you work regularly with an internal development team. Conversely, if your business hews towards the smaller end of the scale, PayPal might be better suited to your needs. Let’s get into the features:

Dollar bill for account types.

Account type

Since PayPal owns Braintree, they are ultimately more similar than not. One of the primary differences between PayPal and Braintree is how they handle your account. With Braintree, you will be working with a specialized merchant account dedicated to assisting you with any and all needs as they arise. This sort of thing often requires more underwriting, time, and effort to set up. It also means that your account will be less scrutinized over time.

In PayPal’s case, they are the merchant account holder. Instead of an account dedicated to helping only you, you receive a portion of PayPal’s merchant account. Think of it as opening your own cell phone account instead of being on a family plan.

While Braintree and PayPal are alike in many ways, this is one critical juncture where they differ. PayPal users may open themselves up to holds, closing, or even frozen accounts. With this knowledge in mind, it is imperative to do any necessary legwork for your account before making this decision.

Dollar bill.

Payment methods

Both Braintree and PayPal offer the same options as far as payment methods are concerned. Both can handle a comprehensive scope of credit and debit card options, and you can also accept PayPal through both local and international payment alternatives. However, it is important to note that users who wish to accept all local payment options will eventually have to integrate PayPal into their existing Braintree account.

User-friendly features.

UI and ease of use

While both PayPal and Braintree are relatively developer-friendly, each service offers users a different, singular experience.

Process of UI functionality.

PayPal UI

Regarding the user interface (UI), PayPal is as straightforward as it gets. PayPal’s UI allows users to accept payments online, meaning through either the website or mobile app. PayPal users can also customize their desired functionality with add-ons and built-in features designed to meet their business needs. In that respect, PayPal UI is fairly uncomplicated and offers merchants all the tools they need to operate successfully.

Calculator and paperwork.

Braintree UI

Conversely, Braintree is more complex, at least for novice business owners. Newcomers may find it takes longer to get things fully up and running. Having coding experience helps, at least in terms of configuration, but there’s really no way around it: in terms of keeping it simple, PayPal has the advantage here. Braintree is also fairly streamlined, meaning that users can emphasize and highlight the features most relevant to them.

PayPal and Braintree integration.


PayPal offers one of the largest integration libraries of any payment service provider. As a business owner, all the required integrations will likely exist in PayPal. Since Braintree connects to the PayPal platform, users can access every integration with ease.

Customer support person helping a customer decide between Braintree Vs. Paypal.

Customer support

The value of customer support is paramount in this context, especially as it applies to issues with integration, cash flow, and, most importantly, accepting customer payments. If there is one area where PayPal is slightly lacking, it’s in real-time, phone-based customer support.[2]TrustPilot. “PayPal Reviews” Accessed on June 4, 2024. As an alternative, PayPal tends to rely on live chats, Wikis, and site-based features. If you find that you are eventually subject to a random freeze, hold, or account closure, you will almost certainly want live phone support to help alleviate the issue.

Braintree reportedly offers that live customer service element that PayPal could stand to adopt. As long as you call during business hours, you’ll be paired with a phone rep whose only job is to help you resolve your issue. However, the TrustPilot reviews suggest that ameliorating these issues may be trickier than once imagined. In other words, both companies could probably stand to improve in this area.[3]TrustPilot. “Braintree Payments Reviews” Accessed on June 4, 2024.

Payment gateway security with laptop and checkmark.


Both PayPal and Braintree offer resilient fraud protection and impressive data security services. In other words, they are both secure, reliable payment solutions that offer users with a wide range of integrations.

PayPal vs Braintree: Pricing and Fees

Next, let’s talk pricing.

In terms of PayPal’s standard pricing and fees, how does it compare with Braintree? PayPal recently implemented some pricing changes that are a bit more complex than we have time to explain here. Here are the nuts and bolts in terms that everyone will be able to understand:

Hand holding a crown.

Pricing models and plans

Substantial businesses can negotiate discounts or customize pricing models for both PayPal and Braintree. Braintree’s payment pricing model is a flat rate, which is also true of PayPal. This means that both PayPal and Braintree charge a flat, percentage-based fee plus a separate transaction fee based on the total volume of transactions processed each month. On the plus side, your end-of-the-month bill becomes easier to predict. On the downside, the plan itself is more expensive than what the competition typically offers.

PayPal charges 2.99% for standard transactions and 3.49% on all volumes processed through checkout.[4]PayPal US. “Fees | Merchant and Business | PayPal US” Accessed on June 4, 2024. That means for every $100 you accept through PayPal checkout, you will pay $3.49 in fees. PayPal users will also want to consider transfer limits when making any significant business decisions.

Additionally, PayPal users submit a fee of $0.49 per transaction. For example, suppose a customer completes a single PayPal checkout transaction totaling $100. As the account owner, you will pay $3.49 for the percentage-based fee plus an additional $0.49 for the transaction itself. This brings the total to about $3.98, meaning a rate of effectively 4.00%. In other words, these fees can make a big difference if your average transaction size happens to be on the smaller side.

Braintree, on the other hand, charges 2.59% and $0.49 per transaction.[5]Braintree Payments. “Pricing | Braintree Payments” Accessed on June 4, 2024. If you typically process large ticket-size transactions, this is a much more cost-effective approach. Inversely, if you are in the business of processing ticket transactions on the smaller end, this fee can drastically increase your average processing cost.

Remote processing costs may also incur additional fees, as is often the case for eCommerce and online businesses.

Processing fees.

Processing fees

The rates mentioned above are not all-inclusive. There are other fees you should anticipate, including:

  • Chargeback fees, which can range from $10-$25 per instance
  • Fraud prevention fees, which are typically $10 per month
  • An additional 1.00% fee for any non-US-based credit cards (or non-US currency)
  • A $30 monthly fee (if, for example, you set up a PayPal business account instead of a personal account)
  • A higher rate of 3.50% for American Express credit cards
  • And more

It is worth mentioning that both options offer relatively comparable and competitive pricing structures, at least in contrast to similar providers.

Braintree vs PayPal Pros and Cons

PayPal pros include:

  • A trusted brand name
  • Global recognition
  • Options for secure, protected payments
  • A customer-friendly interface
  • A variety of available payment options
  • Reliable international support

Braintree pros include:

  • A flexible, developer-friendly system
  • Access to PayPal’s network of international payment and integration options
  • Lower transaction fees than PayPal (in most cases)
  • Superior customer support

PayPal cons include:

  • High processing costs
  • Limited options for development and flexibility
  • High transaction-running costs

Braintree cons include:

  • Limited brand recognition
  • Integration and underwriting requirements can make launching an account challenging
  • Not always the best option for smaller businesses

Braintree or PayPal: Which is Best for my Business?

Braintree and PayPal offer many of the same products and services on what is essentially the same platform. When comparing features, it can be difficult to discern which option is best for you. The easiest way to determine this involves understanding what you hope to get from your payment provider. If you are looking for a customizable system that you can build from the ground up, Braintree is an excellent option. If you’re looking for an easy, accessible, ready-to-go platform, you can’t go wrong with PayPal.

Having said that, if your business is considered high-risk or if you’d simply like a payment provider with specific experience in your industry, consider partnering with a merchant services provider. A dedicated payment provider can help you meet your business needs with support, troubleshooting, and custom pricing, all on your time.

Now is the time.

Take the next step and start accepting payments.

Open a merchant account today


Frequently Asked Questions (FAQs)

What is the primary difference between PayPal and Braintree?

The main difference between PayPal and Braintree is that they target different demographics. If you have a business where a development team is a crucial part of day-to-day operations, Braintree may be a better fit in the long run. This is partly because they offer actionable integrations through their open API and mix-and-match customizations. As such, Braintree targets larger enterprises with more concrete customer needs.

On the other hand, PayPal is designed to meet the demands of smaller businesses. Its appeal lies in the fact that business owners can get set up quickly and with minimal fuss. PayPal users can also access a multitude of integrations without touching a single line of code, which is a huge plus.

Is Braintree more cost-effective than PayPal for smaller transactions?

For smaller transactions, neither PayPal nor Braintree offer the most ideal pricing. Both charge a premium that is ultimately higher than the industry standard. If you process a $10 transaction, here’s what you can expect to pay:

  • Braintree would charge $10.00 x 2.59% + $0.49 for the transaction, which is $0.26 + $0.49, or $0.75—an effective rate of 7.50%.
  • PayPal would charge $10.00 x 2.99% (best case scenario) + $0.49 for the transaction. This comes to $0.30 + $0.49 for the transaction, an effective rate of 7.90%

While $0.75-$0.79 is a small amount on its own, it still accounts for a significant percentage of the total amount accrued. Both options reduce your profit margin if your business is one that runs off small transactions. In this case, you’d be better off identifying a full-service merchant account designed with your processing needs in mind.

Can I use Braintree without PayPal?

Yes, although you will ultimately need to integrate with PayPal to access the full spectrum of payment options. On its own, Braintree is a full-service gateway solution, meaning you can use it with or without the designated integrations.

Why did PayPal buy Braintree?

PayPal’s purchase of Braintree came with an $800 million price tag, which was a pretty penny to pay for a software solution that had roughly only 4,000 customers at the time of acquisition. Why exactly did PayPal buy Braintree? In the words of PayPal’s then-CEO, “Braintree is a perfect fit for PayPal.”[6]USA Today. “PayPal agrees to acquire Braintree for $800 million” Accessed on June 4, 2024. 

Here are a few of the reasons PayPal was motivated to buy Braintree (for added context, PayPal also owns eBay):

  • eBay was looking to expand into mobile commerce
  • eBay wished to partner with then-up-and-coming startups like Airbnb and Uber
  • Braintree’s platform offered more workable payment processing solutions for creative startups like TaskRabbit, Airbnb, and Uber
  • Braintree has proven well-suited to the fast-growing world of the startup market
  • Braintree owned Venmo, thus giving PayPal immediate access to the platform
  • Finally, Braintree’s APIs were superior to PayPal‘s at the time. Quickly, Braintree proved capable of adopting franchise APIs instead of continuing to develop its own

Since 2013, PayPal and Braintree have enhanced their mutual connection. Today, they essentially run across one platform, offering their customers the same great features in different markets.

Article Sources

  1. Finances Online. “64 Key Online Payments Statistics: 2021 Market Share & Data Analysis –” Accessed on June 4, 2024.
  2. TrustPilot. “PayPal Reviews” Accessed on June 4, 2024.
  3. TrustPilot. “Braintree Payments Reviews” Accessed on June 4, 2024.
  4. PayPal US. “Fees | Merchant and Business | PayPal US” Accessed on June 4, 2024.
  5. Braintree Payments. “Pricing | Braintree Payments” Accessed on June 4, 2024.
  6. USA Today. “PayPal agrees to acquire Braintree for $800 million” Accessed on June 4, 2024.

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