GoCardless vs PayPal: Everything You Need to Know

Are you on the lookout for the right payment gateway to power payments for your business?

Unsure whether GoCardless offers your business more value than PayPal or if the opposite is true? We’re here to help put all the facts on the table to help you make the right decision.

In this article, we’ll deep dive into all things GoCardless vs PayPal including their market shares, category rankings, and geographical regions served. We’ll also cross-examine each in terms of the payment options they offer, pricing structures, security levels, and quality of customer service.

Let’s start with some basics before diving into the details.

What is GoCardless?

GoCardless is a payment processing company, founded in 2011, and headquartered in London, United Kingdom. It allows businesses to collect payments through direct debit and set up recurring payments from customers.

In addition to automating recurring payments, GoCardless also offers customizable payment pages, payment links, invoicing services, integrations with existing software, and a developer API for enhanced customizability.

Currently, the platform serves merchants in over 30 countries only from the Global North including the United States, Canada, Australia, New Zealand, and many European countries.

What is PayPal?

PayPal is an American digital payments company, founded in 1998 and headquartered in San Jose, California. The platform enables both individuals and businesses to send and receive electronic payments. Users can link their bank account and credit or debit cards to their PayPal account to make secure online transactions.

In addition to its payment services, PayPal also offers a range of tools and services for businesses, such as invoicing, payment processing, and fraud protection.

The platform is available in over 200 markets and allows users to send and receive payments in 25 different currencies.

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Which of the two better serves your unique business needs really depends on what you need from your payment gateway and which markets you’re catering to.

Let’s get into the detailed comparison of GoCardless vs PayPal!

GoCardless vs PayPal: Market Share and Category Ranking

In the Payment Management category:

PayPal is reported to have 329443 customers across 207 countries, with a market share of 76%. It ranks 1^st in this category.
GoCardless is reported to have 2048 customers in 34 countries and a market share of 19%. It ranks 17^th in this category.

Despite PayPal being the much bigger player and ranking 1^st across most verticals, many businesses find that payment service providers with smaller market shares serve their needs better with lesser restrictions and more cost-effective solutions.

GoCardless vs PayPal: Geographical Region

PayPal has more customers in the United States, the United Kingdom, and Germany. GoCardless has more customers in the US, the UK, and France. Overall, it’s safe to assume that both target similar markets in the Global North.

Nevertheless, PayPal has a global reach and can easily power international payments. GoCardless also has provisions in place for international transactions.

Having said that, businesses catering more specifically to markets in the Global South including Latin America, Africa, Asia, and Oceania might have better luck considering other payment gateways with more localized payment methods.

GoCardless vs PayPal Comparison 2023

Here’s a breakdown of the pricing and features comparison of PayPal vs GoCardless:

1. Payment Methods Offered

GoCardless:

GoCardless champions its direct debit payment option but also offers cash, cheques, Bacs transfer, credit/debit cards, and standing orders.

PayPal

PayPal offers merchant account services and makes multiple payment methods available to your customers including standard credit and debit cards, as well as, PayPal Checkout, PayPal Guest Checkout, QR code, Venmo, and others.

2. Pricing Structure

GoCardless

The basic plan has no monthly or set-up fees and allows you to pay per transaction. The plans associated with £50 and £200 monthly fees additionally allow you to access greater customizability and personalized payment pages respectively. They also offer volume-based pricing.

For domestic transfers in the UK and Eurozone, GoCardless charges:

1% + £/ € 0.2 capped at £4.
To illustrate for a £10 transaction, your business will be charged, 1% of 10 with the 20 pence fixed fee added in, which is 30 pence + VAT. For a £1000 transaction, the fee will be capped at the max £4 + VAT
For transactions of £2,000 or more, they charge an additional 3% fee on the portion of the transaction above the £2,000 threshold.
To illustrate, for a £5000 transaction, the £4 cap is added to 0.3% of the portion of the transaction above £2000. So, 0.3% of £3000 which is £9. The total fee is £4 + £9 +VAT
There are no high-value transaction fees for Instant Bank Pay.

For international transactions GoCardless charges,

2% + 20p per transaction with currency conversion included at the real exchange rate

PayPal

PayPal has a slightly more complex pricing structure. There are no monthly fees and you can pay per transaction. However, for $30 a month, PayPal pro offers you access to advanced features that can help you scale.

Each available payment method is associated with its own standard transaction fee. For example, in the US, PayPal charges,

49% + fixed fee for Venmo, PayPal, and PayPal guest Checkout
90% + fixed fee for QR code transactions of USD 10 and above
40% + fixed fee for QR code transactions of USD 10 and below
99% + fixed fee for standard credit and debit cards

Furthermore, PayPal charges an additional 1.5% on international transactions. It also charges chargeback fees and additional fees depending on the currency of the transaction.

3. Security

Both PayPal and GoCardless are PCI DSS compliant which means that they meet the highest level of security standards for handling cardholder data. They also both offer fraud detection and prevention features.

4. Quality of Customer Support

Both PayPal and GoCardless offer multiple channels of customer support. The former offers message and call support, a chat box, community support, extensive documentation, and video support. GoCardless offers the same including webinars.

Conclusion

In conclusion, GoCardless and PayPal are both robust payment gateways. Both offer a range of payment methods including standard credit and debit cards, PayPal Checkout, PayPal Guest Checkout, QR code, Venmo, and others. Both platforms are also PCI DSS compliant and offer fraud detection and prevention features. They also both offer multiple channels of customer support.

Both platforms have provisions in place for international transactions, but businesses catering more specifically to markets in the Global South including Latin America, Africa, Asia, and Oceania might have better luck considering other payment gateways with more localized payment methods.