GoCardless vs PayPal – Comparing payment processing providers

Last updated on 19 December 2023

In today’s dynamic business environment, selecting the right payment processing system is crucial for ensuring smooth financial transactions. Two prominent players in this domain are GoCardless vs PayPal.

Compare options for taking card payments

This article delves into a comprehensive comparison between GoCardless vs PayPal, tailored for a UK business audience.

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GoCardless vs PayPal

Here’s a detailed comparison table outlining the key features and fee structures of GoCardless vs PayPal. This table provides a clear overview to help UK businesses make an informed decision based on their specific needs.

Feature / Fee ComponentGoCardlessPayPal
Transaction Fees1% per transaction, capped at a maximum, plus a small fixed feePercentage of transaction value plus a fixed fee; varies by transaction type, currency, and countries involved
Pricing StructureTransparent with no hidden costsMore complex with potential additional charges for chargebacks and international payments
Ease of IntegrationStraightforward integration with many accounting and billing platformsRange of options including APIs for custom integrations and solutions for e-commerce platforms
User InterfaceSimple and user-friendly, ideal for direct debits and recurring paymentsUser-friendly but can be complex due to the range of services offered
Payment Processing TimeTypically 3-5 working daysInstant for PayPal-to-PayPal transfers; several days for withdrawals to a bank account
Security and ComplianceStrong focus on security, GDPR compliant, uses encrypted data transmissionRobust security measures, end-to-end encryption, and fraud protection; complies with international standards
Market ReachStrong in the UK and Europe, ideal for B2B and subscription modelsGlobal presence, widely accepted and trusted, suitable for international transactions
Currency HandlingSupports a range of international currenciesExtensive support for multiple currencies and international payments
Customer SupportDedicated support, with a focus on merchant servicesComprehensive support, including customer service and dispute resolution
Refund PolicyRefunds managed through direct debit guarantee schemeRefund capabilities, subject to PayPal’s policies and fees
Set-Up FeesNo set-up feesNo set-up fees
Monthly FeesNo monthly fees for standard plans; custom pricing for large volumesNo monthly fees for standard accounts; fees for business accounts and additional services
Chargeback FeesNo specific chargeback fees, but subject to bank chargesChargeback fees applicable, varies depending on the case
GoCardless vs PayPal

Overview of GoCardless and PayPal


GoCardless is a UK-based payment company specialising in direct debit services. It allows businesses to collect bank-to-bank payments across a range of international currencies. GoCardless is known for its user-friendly interface and is particularly effective for recurring billing models.


PayPal, on the other hand, is a global financial services company. It provides an extensive range of payment solutions, including online payments, credit card processing, and mobile transactions. PayPal is renowned for its widespread acceptance and consumer trust.

Transaction fees and pricing structure

The cost of transaction fees is a vital factor for businesses when choosing a payment processor.

  • GoCardless charges a transaction fee of 1% per transaction, capped at a maximum amount, and a small fixed fee for each transaction. It offers a transparent pricing model with no hidden costs.
  • PayPal charges a percentage of the transaction value plus a fixed fee. The fees can vary depending on factors like the type of transaction, the currency used, and the countries involved. PayPal’s fee structure can be more complex and may include charges for things like chargebacks and international payments.

Ease of integration and use

Ease of integration with existing systems and the user experience are critical aspects.

  • GoCardless provides a straightforward integration process with many popular accounting and billing platforms. It is designed with simplicity in mind, making it a good choice for businesses that prioritise ease of use.
  • PayPal offers a range of integration options, including APIs for custom integrations and pre-built solutions for popular e-commerce platforms. PayPal is also known for its user-friendly interface, though its more extensive range of services can sometimes complicate the user experience.

Payment processing times

The speed of payment processing is another crucial factor.

  • GoCardless typically processes payments within 3-5 working days. The processing time can vary depending on the banks involved and the countries where transactions are being made.
  • PayPal transactions are usually processed instantly, especially for PayPal-to-PayPal transfers. However, withdrawing funds to a bank account can take several days.

Security and compliance

Security is paramount in payment processing.

  • GoCardless focuses heavily on security and complies with the relevant financial regulations in each country it operates. It uses encrypted channels for data transmission and is compliant with the EU’s General Data Protection Regulation (GDPR).
  • PayPal is known for its robust security measures, including end-to-end encryption and fraud protection. It also complies with international security standards and regulations.

Market reach and customer preference

The choice between GoCardless and PayPal may also depend on the business’s target market.

  • GoCardless is particularly strong in the UK and Europe and is a good choice for businesses focusing on these markets, especially for B2B transactions or regular subscriptions.
  • PayPal’s global presence makes it a preferred choice for businesses with a more international customer base. Its brand recognition and consumer trust are significant assets in encouraging customer confidence.

GoCardless vs PayPal – The verdict

Choosing between GoCardless and PayPal depends on a business’s specific needs.

GoCardless is an excellent option for UK and European businesses focusing on direct debit and recurring payments, offering straightforward pricing and easy integration.

PayPal, with its global reach and instant processing capabilities, is suited for businesses needing a more diverse range of payment options and a broader international presence.

Each service has its strengths, and the decision should align with the business’s operational requirements and customer preferences.

FAQ for PayPal vs GoCardless

What are the main differences between GoCardless and PayPal in terms of transaction fees?

GoCardless typically charges a flat 1% fee per transaction with a cap, plus a small fixed fee, whereas PayPal charges a percentage of the transaction value plus a fixed fee, which can vary based on transaction type and currencies involved.

How do GoCardless and PayPal compare in terms of international payment support?

GoCardless supports international payments in several currencies and is particularly strong in the UK and Europe, while PayPal offers extensive support for multiple currencies and has a broader global reach.

Can businesses use both GoCardless and PayPal for recurring payments?

Yes, both GoCardless and PayPal can be used for recurring payments, but GoCardless is more specialised in direct debit services which are often used for this purpose.

Which is more user-friendly for small businesses, GoCardless or PayPal?

Both platforms are user-friendly, but GoCardless tends to be simpler and more straightforward, especially for direct debits, while PayPal offers a wider range of services that might be more appealing to businesses with diverse needs.

How do the security features of GoCardless compare with those of PayPal?

Both GoCardless and PayPal provide robust security features, including encryption and compliance with industry standards, but PayPal may have a slight edge due to its larger scale and more extensive experience in diverse markets.

What are the integration capabilities of GoCardless vs PayPal with other business software?

GoCardless offers easy integration with many accounting and billing platforms, while PayPal provides a range of APIs and pre-built solutions for various ecommerce platforms.

How do refund policies of GoCardless differ from those of PayPal?

GoCardless manages refunds through the direct debit guarantee scheme, whereas PayPal’s refund policies are subject to its own terms, which include specific conditions and potential fees.

In terms of customer support, how do GoCardless and PayPal compare?

Both GoCardless and PayPal offer dedicated customer support, but PayPal’s larger global presence might provide a more extensive support network, including dispute resolution services.

For a UK-based business, would GoCardless or PayPal be more advantageous?

For UK-based businesses, especially those focusing on the European market or direct debit payments, GoCardless could be more advantageous. PayPal, however, is better for businesses seeking broader international reach.

How do GoCardless and PayPal handle currency conversions and multi-currency transactions?

GoCardless supports transactions in various international currencies, but PayPal offers more extensive options for currency conversions and multi-currency transactions, albeit with additional fees for conversions.

Is it easier to set up an account with GoCardless or PayPal?

Setting up an account is relatively easy with both GoCardless and PayPal, with streamlined online processes designed for user convenience.

Which platform, GoCardless or PayPal, offers more transparent pricing?

GoCardless is known for its transparent pricing structure with no hidden fees, whereas PayPal’s fee structure can be more complex and may include additional charges under certain conditions.

For a non-profit organisation, is GoCardless or PayPal a better payment processing option?

This depends on the organisation’s specific needs; GoCardless could be more cost-effective for recurring donations via direct debit, while PayPal might be better for its global reach and instant payment capabilities.

How do GoCardless and PayPal compare in terms of processing times for payments?

GoCardless typically processes payments within 3-5 working days, whereas PayPal processes payments instantly, though withdrawing funds to a bank account can take longer.

Can both GoCardless and PayPal be used for mobile payments?

PayPal offers extensive mobile payment solutions through its app, while GoCardless is more focused on direct debit and may not have as many mobile-specific features.

How do chargeback policies of GoCardless compare with those of PayPal?

GoCardless doesn’t have specific chargeback fees but is subject to bank charges, while PayPal has detailed chargeback policies with associated fees depending on the case.

Which platform, GoCardless or PayPal, is more suited for e-commerce businesses?

PayPal is typically more suited for e-commerce businesses due to its widespread recognition, instant payment processing, and comprehensive integration options with e-commerce platforms.

How do the monthly fees for using GoCardless compare with those of PayPal?

GoCardless does not charge monthly fees for standard plans, offering custom pricing for larger volumes, whereas PayPal does not have monthly fees for standard accounts but may charge for business accounts and additional services.

For international businesses, is GoCardless or PayPal the better option for handling multiple currencies?

PayPal is generally the better option for international businesses that handle multiple currencies, offering broader support and capabilities for currency conversion.

In terms of flexibility and scalability, how do GoCardless and PayPal compare for growing businesses?

GoCardless offers simplicity and is ideal for businesses focused on direct debits and recurring payments, while PayPal provides more flexibility and scalability for businesses looking to expand internationally or require a wider range of payment options.

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Reviewed by , Managing Director


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