Revolut vs. PayPal for Merchants: A Comprehensive Review

Both Revolut and PayPal offer a wide array of products and features for both individuals and businesses, but this guide focuses specifically on comparing their payment processing capabilities for UK and European merchants.

We will explore the strengths and weaknesses of each service, including supported payment methods, pricing, and integration capabilities, to help you make an informed decision. Note that the information presented here was gathered from their respective websites in October 2024 and is subject to change.

Overview

Revolut was founded in 2015 in London by a Russian-born entrepreneur Nikolay Storonsky with a mission to simplify international money transfers and eliminate the high fees associated with traditional banks. It offered free currency exchange at interbank rates and significantly reduced fees for cross-border transactions. With a modern, app-based experience that resonated with younger, globally-minded consumers and aggressive referral campaigns, it quickly grew across European markets. With time, Revolut has received a bank license and expanded to serve business clients, including merchants.

PayPal: Established in 1998 in the United States, PayPal was originally developed to provide secure online payments and has since grown into a major player in the payments industry. It was one of the first digital wallets that gained widespread popularity allowing users to send money to family and friends easily across the globe. Its integration with eBay (which owned PayPal from 2002 until 2015) helped it gain massive exposure in the early 2000s as the preferred payment option of the platform. PayPal is now an independent company traded publicly and led by President and CEO Dan Schulman.

Key Market Focus

Revolut focuses on offering a diverse range of financial services, including multi-currency bank accounts and international payments for private individuals as well as small and medium-sized businesses.

PayPal acts as a digital wallet that makes secure online payments simple for consumers. PayPal primarily targets online payments, serving a wide range of merchants with an easy-to-use system for accepting payments from customers worldwide. It also integrates seamlessly with e-commerce platforms, which has made it a go-to for online merchants.

Supported Markets and Customer Base

Geographic coverage

Revolut operates in over 30 European countries, including the UK, with expansion into the US and parts of the Asia-Pacific region. Its business offering is, however, primarily aimed at the European market, UK/EEA registered businesses with owners being local residents.

PayPal is available in over 200 countries globally, making it one of the most widespread payment solutions.

Supported languages and currencies

Revolut supports 25+ currencies, with multi-currency accounts allowing merchants to hold balances and transact seamlessly.

PayPal supports 25 currencies, with users able to receive payments in different currencies and convert as needed.

Merchant industries served

Revolut is popular among small to mid-sized merchants, especially in retail, tech, and the services industry. 

PayPal serves almost all merchant categories, from retail and SaaS to travel, including larger enterprises as well as freelancers.

Revolut vs PayPal Features

Supported payment methods

Revolut supports over 6 payment methods, including credit cards, bank transfers (UK only), and digital wallets: Apple Pay, Google Pay, Revolut Pay. The payments can be accepted via: 

• Payment Links
• Revolut Reader and POS app
• Online Checkout
• Invoicing

PayPal supports over 20 payment methods globally, though most UK merchants can access only the common options like credit cards and digital wallets: Apple Pay, Google Pay, PayPal wallet as well as PayPal's own BNPL service called Pay in 3. Some alternative payment methods can be offered on a case by case basis by PayPal. The payments can be accepted via:

• Online Checkout
• POS payments
• Invoicing

Recurring payments

Revolut: Recurring billing is supported but remains limited compared to PayPal, required integration through the use of Revolut’s API.

PayPal: Offers robust support for recurring payments and subscription management, recurring payments are built in to PayPal Checkout and can be set up from the PayPal dashboard.

Security & Compliance

Revolut uses 3D Secure, tokenization, and other anti-fraud measures to protect transactions. PayPal has extensive fraud prevention mechanisms, including advanced AI for risk detection and chargeback protection.

Business Registration and Licenses

Revolut has received a bank license in the UK in 2024, after a three years long review by regulators. In the EU it holds a bank license from the Bank of Lithuania.

PayPal is registered as a bank in Luxembourg for EU operations and complies with regulations in multiple jurisdictions. PayPal holds an Electronic Money Institution license in the UK.

Integrations

Plugins and e-commerce integrations

Revolut has plugins for WooCommerce, Magento, Prestashop, BigCommerce, Shopify, and OpenCart. 

PayPal integrates with almost all major e-commerce platforms, including Magento, Shopify, WooCommerce, BigCommerce, Wix, Shopware, Squarespace, and others, making it more versatile for online merchants.

API and SDK

Both services offer robust APIs for developers, but PayPal has a more comprehensive set of SDKs and third-party integrations, such as accounting tools like QuickBooks.

Revolut Fees vs PayPal Fees

Setup costs and monthly fees

Revolut: No setup fees; monthly subscription costs for online payments, subscription for in-person payments apply.

PayPal: No setup fees; no monthly subscription for the standard package.

Transaction fees

Revolut: Domestic credit card payments start from 1% + £0.20 per payment, while international cards are charged 2.8% + £0.20.

PayPal: Standard card fees in the UK are 1.20% + £0.30 per transaction. EU and international transactions incur slightly higher fees, which can be a disadvantage for cross-border merchants.

See the providers' websites for complete and up-to-date pricing breakdown.

Additional fees

Revolut: Chargeback fees £15 apply.

PayPal: Conversion fees, chargeback fees, and cross-border transaction fees can add up, making PayPal more expensive for international transactions.

Settlement Times

Revolut typically offers next-day settlement for most transactions. The money is settled into your Revolut Merchant account.

PayPal settlement times vary between 1-3 days, which can sometimes be slower than Revolut.

PayPal vs Revolut Support

Revolut offers support via chat, though there are complaints about response times. Dedicates account managers are offered only to higher-tier customers.

The Revolut Trustpilot rating is 4.2. There are mixed reviews, with some complaints focusing on difficulties contacting customer service.

PayPal provides live chat, phone, and email support, but reviews indicate frequent issues with responsiveness, especially for disputes. Personal manager services are not widely available.

The PayPal Trustpilot rating is 1.3. Reviews often mention frozen accounts and delayed responses for disputed payments, which may indicate reliability issues in customer support.

Why PayPal and Revolut might not be for you

While Revolut and PayPal both provide powerful payment processing capabilities, they may not be suitable for all merchants. For businesses looking for lower transaction costs and faster settlements, both PayPal and Revolut can be limiting due to their card fees and sometimes delayed settlement times. PayPal, in particular, can become costly for international transactions due to conversion fees, cross-border fees, and other hidden charges.

Additionally, both services have limitations in terms of customer support, with frequent complaints about response times. Merchants seeking a more direct and efficient payment system might find these options lacking in terms of transparency and cost-effectiveness.

Introducing Noda: The open banking advantage

If you're seeking a payment solution that offers superior cost-effectiveness and speed, consider Noda. Unlike Revolut and PayPal, Noda leverages open banking payments, connecting with over 2000 banks in 28 countries in the UK, EU as well as expanding to Brazil and Canada.

Noda’s uses open banking technology to connect directly with customers' bank accounts. This means payments are made instantly without using card networks, which helps merchants save on card processing fees as well as eliminates additional card-related issues such as chargebacks and rolling reserves. By simplifying the payment process, Noda allows businesses to receive their money faster, as well as offer their customers a convenience of paying through their trusted local banks in a couple of clicks.

Noda also provides features like payment links, bank payouts, card payments, identity verification, and customer data insights to meet the diverse needs of online merchants. The Noda Checkout integrates easily via API or plugins for e-commerce platforms such as Magento, OpenCart, PrestaShop, and WooCommerce.

A personal manager is available to support you at every stage of your journey with Noda. Contact us today for a personal consultation and quotes tailored to your specific business case.