The world of payment processing has never been more diverse, with two giants dominating the landscape in the “Square vs PayPal” debate. But with each platform offering its unique set of features, how do you decide which is best for your business? In this comprehensive comparison, we’ll dive deep into the capabilities and differences of Square and PayPal, helping you make an informed decision based on your specific needs and requirements. Let’s explore the world of payment processing and unlock the full potential of your business in the context of Square vs PayPal!
Short Summary
- Comparing Square and PayPal in 2023: both offer distinct payment processing solutions with unique features to meet varying business needs.
- Consider fees, hardware options, security measures, customer support & international transaction capabilities when selecting a processor for your business.
- When to choose Square or PayPal depends on the type of payments you need. Each is ideal for different scenarios such as ecommerce integration and POS systems respectively.
Square and PayPal Overview
Square and PayPal are both well-known payment processing platforms, providing distinct services to meet varying business requirements and offering unique features. A PayPal business account is one such feature that allows businesses to accept payments online and in person, while Square offers a range of POS systems and hardware solutions, both integrating seamlessly with your payment processing workflows.
When comparing Square vs PayPal, Square is renowned for its powerful POS systems, clear pricing, and a broad array of in-person and mobile payment solutions. PayPal, on the other hand, is a world leader in online payments, providing smooth e-commerce integration, international currency support, and a widely recognized brand.
But, what are the specifics of their key features and strengths? Let’s dive deeper into each platform.
Square: Key Features and Strengths
Square is renowned for its comprehensive POS systems, transparent fee structures, and extensive in-person and mobile payment solutions. Its invoicing feature allows for card payments, as well as ACH payments, with transaction fees that are more favorable than PayPal’s echeck payment processing fees.
Square also provides a range of hardware solutions, such as Square Reader, Square Terminal, Square Register, and Square Stand, catering to businesses with different needs.
PayPal: Key Features and Strengths
PayPal is a renowned global leader in online payments, offering efficient e-commerce integration, international currency support, and a distinguished brand. With a PayPal account, it accepts approximately two dozen currencies and provides a button generator that can detect if the customer has Venmo and display a button to enable payment via Venmo.
PayPal also offers Zettle, a POS software that provides a comprehensive front-end experience for cashiers and a powerful back end for transaction tracking and inventory management.
Payment Processing Fees Comparison
Comparing payment processing fees between Square and PayPal is essential for businesses to understand their pricing structures and any additional costs. Square offers competitive fees with no monthly charges for basic services, while PayPal also does not impose monthly fees. However, PayPal’s rates may be confusing, and it charges a monthly fee for the virtual terminal.
Additional costs to consider when using Square and PayPal include chargeback fees. PayPal imposes a $20 fee for chargebacks, whereas Square does not. PayPal imposes a monthly fee for its virtual terminal service. Additionally, no exceptions can be made for chargeback costs.
Square Fees and Pricing
Square offers competitive fees with no monthly charges for basic services, though there may be additional fees for premium features. Most of its plans include a rate of 2.9% + $0.30 per transaction, with some plans having associated monthly fees. With a Square account, you can enjoy these benefits and more.
For businesses processing more than $250,000 annually, custom pricing is available.
| Payment Type | Rate Per Transaction |
|---|---|
| In-Person (Card-Present) | 2.6% +10 cents |
| Online & E-Commerce | 2.9% + 30 cents |
| Invoicing | 3.3% + 30 cents |
| Keyed-In & Manually Entered | 3.5% + 15 cents |
PayPal Fees and Pricing
PayPal has a range of fees based on the plan and transaction type, as well as additional charges for specific services. It provides two payment gateway services, namely, PayPal Payments Standard and PayPal Payments Pro, offering various features and fees depending on your business needs. These services allow businesses to efficiently process payments through the platform.
| Payment Type | Rate |
|---|---|
| Alternative Payment Method (APM) | APM Transaction Rates Apply |
| PayPal Checkout | 3.49% + fixed fee |
| PayPal Guest Checkout | 3.49% + fixed fee |
| QR code Transactions – 10.01 USD and above | 1.90% + fixed fee |
| QR code Transactions – 10.00 USD and below | 2.40% + fixed fee |
| QR code Transactions through third party integrator | 2.29% + 0.09 USD |
| Pay with Venmo | 3.49% + fixed fee |
| Send/Receive Money for Goods and Services | 2.99% |
| Standard Credit and Debit Card Payments | 2.99% + fixed fee |
| All Other Commercial Transactions | 3.49% + fixed fee |
In-Person and Mobile Payment Solutions
In-person and mobile payment solutions are essential for businesses to accept payments on-the-go or in physical stores, including in person transactions. Square and PayPal both provide hardware options to facilitate this process, as well as offering credit card acceptance that is similar to traditional merchant accounts. Square provides a wide range of hardware options. These include mobile magstripe readers, contactless readers, stands, terminals, registers, as well as hardware kits. In contrast, PayPal offers credit card readers and terminals but does not provide the same variety of options as Square, such as the mobile magstripe reader.
Both Square and PayPal offer tools to facilitate subscription payments, allowing businesses to manage recurring payments more efficiently. However, their fees for recurring payments differ. PayPal’s standard rates apply, with a monthly fee of $10 for recurring payments, while Square increases its fees to 3.5% plus $0.15 per transaction if you want to securely store a card for each transaction.
Square's In-Person and Mobile Payment Options
Square provides various in-person and mobile payment options, including card readers and industry-specific POS systems. In addition to its array of hardware solutions, Square also offers a digital wallet. This allows users to pay for services instantly with no funds required if they order a Square card.
Square supports international cards at standard rates and is available in multiple countries such as the USA, UK, Ireland, Canada, Australia, and Japan.
PayPal's In-Person and Mobile Payment Options
PayPal offers mobile card readers and its Zettle system for in-person payments, but these options are fewer compared to those offered by Square. The Zettle system accepts payments in various forms. Swiped, chipped and tapped (NFC) cards can be used, as well as contactless digital wallets such as Apple Pay and Google Pay.
However, PayPal’s mobile payment options lack features such as offline mode and inventory management, which are available with Square.
Online Payment and E-commerce Integration
Online payment and e-commerce integration are crucial for businesses to sell products and services online. Both Square and PayPal offer online payment services, but their approaches differ. Square allows you to easily create an online store. You can also send payment links to customers, making digital payments a breeze. PayPal, on the other hand, is a leading provider of online payments, with user-friendly payment buttons and portals that make it easy to accept online payments on various platforms.
Square also offers buy now pay later options for both online and in-person purchases, while PayPal allows businesses to accept payments on Square Online. In terms of e-commerce integration, Square provides a seamless experience with its online store builder and compatibility with popular e-commerce platforms. PayPal excels in online payments and offers easy integration options for most website builders and e-commerce platforms.
Square's E-commerce Integration
Square offers a range of e-commerce integration options, including its online store builder and compatibility with popular e-commerce platforms for seamless integration. It also enables businesses to process online transactions, both individual and recurring.
Even multi-party transactions can be processed through Square, by adding a fee on top of third-party payments processed through your app.
PayPal's E-commerce Integration
PayPal is a highly preferred payment solution for online transactions, boasting easy integration with a variety of website builders and e-commerce platforms. It is pre-integrated with popular e-commerce solutions like BigCommerce, QuickBooks, Shopify, SalesVu, and WooCommerce, simplifying the process for businesses.
Additionally, PayPal offers custom and “smart” payment buttons and donation buttons for various online payment needs.
Security and Fraud Protection
Security and fraud protection are essential for businesses to protect customer data and prevent fraudulent transactions. Both PayPal and Square utilize end-to-end encryption to ensure the safety of customers’ payments, providing a high degree of security. In addition to encryption, Square employs compliant data storage, strong cryptographic controls, secure internet usage, phishing protection, and Square Secure as part of its fraud detection tools.
PayPal also provides robust security features, such as data encryption and proactive fraud monitoring, to further protect customer data and guarantee secure transactions. PayPal offers Seller Protection to protect PayPal balance while disputes are being investigated. This service comes at no additional cost to sellers.
Square's Security Measures
Square deploys end-to-end encryption of customers’ payment information, utilizes EMV compliant card readers, employs machine learning models to detect suspicious transactions, and offers no chargeback fees. These strong security measures ensure that your customers’ sensitive data is protected and your business is equipped to handle potential fraud.
Square’s security measures provide peace of mind for both customers and businesses. Customers can trust that their money is safe.
PayPal's Security Measures
PayPal employs data encryption to safeguard customer data and guarantee secure transactions. In addition to encryption, PayPal uses advanced algorithms and machine learning to detect and prevent fraudulent activities. This ensures that your business remains secure and your customers’ information is protected.
Customer Support and Resources
Customer support and resources are vital for businesses to resolve issues and get assistance when needed. Both Square and PayPal offer various support channels, including phone, email, and live chat. However, Square has limited hours of availability, while PayPal provides phone support between 8 a.m. and 8 p.m. Central time Monday to Friday, as well as an online community and a resolution center to address transaction or account issues.
In terms of customer service quality, some users have reported varying levels of service with PayPal’s customer support. It is important for businesses to consider the quality and availability of customer support when choosing a payment processing platform.
Square's Customer Support
Square offers various customer support channels, including phone, email, and live chat, but has limited hours of availability. In addition to these channels, Square provides an online knowledge base and community, as well as support through Twitter (now “X.com”) ensuring that businesses have multiple avenues to seek assistance when needed. An important item to note is that Square charges a $29 month, fee for better access to fast customer support.
PayPal's Customer Support
PayPal provides customer support through phone, instant messaging, and online resources, but some users report inconsistent service quality. Nevertheless, PayPal offers multiple channels for businesses to seek help, including a message center via their website and app, an online community, and a resolution center to address transaction or account issues.
International Transactions and Currency Support
International transactions and currency support enable businesses to expand their reach and cater to a global customer base. While both Square and PayPal offer international payment features, there are differences between the two platforms. Square supports most cards issued outside of the country bearing a Visa, MasterCard, American Express, Discover, JCB, or UnionPay logo and accepts multiple currencies. However, it does not impose any additional fee for international transactions.
PayPal, on the other hand, offers international payments in over 200 countries and regions, with support for 25 currencies. Customers can use international credit and debit cards and pay in their local currency without incurring any additional fees. In terms of international transactions, PayPal has a wider reach in the number of countries and currencies supported compared to Square.
Square's International Transaction Features
Square supports international cards at standard rates but has limited currency support compared to PayPal. It is compatible with most internationally issued cards displaying a Visa, MasterCard, American Express, Discover, JCB, or UnionPay logo.
Square is accessible in various countries, including the United States, United Kingdom, Ireland, Canada, Australia, and Japan.
PayPal's International Transaction Features
PayPal excels in international transactions, offering multi-currency support and lower fees for cross-border payments. It accepts payments in multiple currencies from a variety of countries and provides a seamless experience for customers. They can use international credit and debit cards and pay in their local currency without incurring any additional fees.
This makes it easier for customers to make payments without worrying about exchange rates or additional fees.
Choosing the Right Payment Processor for Your Business
Choosing the right payment processor depends on the specific needs and requirements of your business. If your business requires robust POS systems, in-person payment options, and transparent pricing, Square may be the better choice. However, if your business focuses on online sales, international transactions, and seamless e-commerce integration, PayPal may be the more suitable option.
It’s important to consider factors such as fees, hardware options, security measures, customer support, and international transaction capabilities when selecting a payment processor for your business. By evaluating each platform’s strengths and weaknesses, you can make an informed decision that will help your business thrive in the ever-evolving world of payment processing.
When to Choose Square
Square is an ideal choice for businesses that require comprehensive POS systems, in-person payment options, and clear pricing. It offers a range of hardware solutions and payment features tailored to the needs of brick-and-mortar businesses, making it a popular choice for small businesses with physical stores.
Additionally, Square provides a seamless experience for international transactions, with no additional fees for international cards at standard rates.
When to Choose PayPal
PayPal is better suited for businesses focusing on online sales, international transactions, and seamless e-commerce integration. Its easy integration with various website builders and e-commerce platforms, as well as its support for multiple currencies and countries, make it a preferred choice for online businesses and those looking to expand their global reach.
Furthermore, PayPal offers custom and “smart” payment buttons, providing a user-friendly experience for customers and increasing the likelihood of successful online payments.
Square vs PayPal Alternatives
Although both Square and PayPal are great credit card processing solutions, especially for new business ventures, there are lesser known companies that offer lower processing rates and fee while offering better customer support. Below are the credit card processors that we think better serve well-established businesses with processing volumes exceed $10,000 per month.
CDG Commerce
CDG Commerce stands out as a superior credit card processing alternative to Square and PayPal due to several compelling reasons. Firstly, CDG Commerce offers competitive pricing with transparent rates, avoiding hidden fees common with other platforms. Secondly, it provides a seamless integration with various e-commerce platforms and in-store POS systems, ensuring a smooth customer experience. The company also has a direct integration with accounting services such as Quickbooks and Xero. Additionally, CDG Commerce boasts a robust fraud detection system, minimizing chargebacks and enhancing security. Its exceptional customer support sets it apart, offering personalized assistance and quick issue resolution. Moreover, CDG Commerce grants businesses the flexibility to customize solutions according to their unique needs. CDG Commerce emerges as a reliable, cost-effective, and customer-oriented choice for credit card processing, surpassing Square and PayPal in numerous aspects.
Helcim
Helcim presents itself as a superior credit card processing alternative to Square and PayPal for several compelling reasons. Helcim offers transparent and interchange-plus pricing that automatically reduces as your business grow, ensuring businesses are always getting the most competitive fees. Secondly, it prioritizes security with its EMV-certified equipment and advanced fraud prevention measures, instilling trust among customers. Helcim's exceptional customer service sets it apart, providing personalized support and resolving issues promptly. Moreover, Helcim facilitates seamless integration with various e-commerce platforms and in-store systems, enhancing operational efficiency. Additionally, its user-friendly interface simplifies payment processing for businesses of all sizes. Overall, Helcim emerges as a reliable, secure, and cost-effective choice, surpassing Square and PayPal in key aspects.
Host Merchant Services (High Risk Industry Alternative)
Host Merchant Services is our favorite credit card processing alternative for high-risk business types, surpassing Square and PayPal in various crucial aspects. Firstly, it specializes in serving high-risk industries, understanding their unique challenges and providing tailored solutions to mitigate risks effectively. Secondly, it offers competitive pricing with transparent rates, avoiding the exorbitant fees often associated with high-risk processing. Moreover, Host Merchant Services excels in fraud prevention, utilizing advanced tools and technologies to minimize chargebacks and protect businesses from potential losses. Its dedicated customer support ensures high-risk merchants receive personalized assistance promptly. With a strong track record in supporting high-risk businesses, Host Merchant Services stands as a reliable, secure, and accommodating option for this specific niche.
PayPal vs Square Bottom Line
In conclusion, both Square and PayPal offer unique features and strengths that cater to different business needs, with Square excelling in in-person and mobile payment solutions and PayPal dominating the online payment landscape. By carefully considering each platform’s offerings, pricing structures, security measures, customer support, and international transaction capabilities, you can make an informed decision on the best payment processing platform for your business. Ultimately, the choice between Square and PayPal depends on your specific requirements and priorities, ensuring that your business thrives in today’s competitive marketplace.
Frequently Asked Questions
PayPal vs Square
Overall, Square is better suited for in-person and mobile transactions while PayPal is better for e-commerce and online payments. Merchants also generally pay less with Square for online transactions, while PayPal charges less for in-person transactions.
Ultimately, the best fit for you depends on your business and payment type.
Both Square and PayPal offer secure payment solutions, but with Square you also gain access to a suite of business tools to help you manage and grow your business. These tools include analytics, invoicing, and customer engagement features. With these tools, you can track your sales, create invoices, and send targeted messages to customers. You can also use Square’s point-of-sale system.
Square offers a competitive pricing model with zero monthly fees and basic hardware included. However, it does not provide reliable customer support or 24/7 phone support, making it a major downside of the platform. PayPal suffers from the same type of user complaints.
Square offers a free plan and the Plus plan with a 30-day free trial. After the trial, you can either pay the monthly fee for the Plus plan or revert to the Free plan, which has no setup or monthly fees.
The Plus plan costs $29 a month for appointment-based businesses and $60 a month for restaurants and retailers. PayPal has various monthly fees for optional services to normally start around $20 per month.
Square and PayPal are different payment solutions catering to different needs: Square specializes in in-person and mobile payments, while PayPal focuses on online payments and e-commerce integration.
Which do you prefer, PayPal or Square? Tell us why in the comment section below.
Tyler
I just wanted to take a moment to express my gratitude for the insightful article you wrote about Square vs. PayPal. Your thorough comparison helped me understand the key differences between these payment processors, and it made my decision-making process much easier. Your writing style was clear and concise, making the topic approachable for even someone like me who isn’t well-versed in the technical aspects. I truly appreciate the effort you put into creating such a helpful resource. Thanks again for sharing your expertise, and keep up the fantastic work!
Kevin Bradford Sr
I have been a customer of Square for five years up until February 2, 2017. However, recently my account was deactivated by Square without a proper notice. They sent me an email on February 2, 2017 and I my account was unusable. I found out when I was in the process of taking a payment form a customer on Feb 3, 2017 which is truly unacceptable. The email I received stated that they reviewed my account and found that my business was prohibited by section 3 of the payment terms and/or section 4 of the general terms. I read this document and it doesn’t make any sense. I have tried to contact a representative from Square by phone so they could further explain this document and so we can make sure they understand what my business sales but you can’t reach a customer services rep unless you have a code which you get from your log in, but since my account was deactivated I can’t get a code. I have since received the same emails from square apologizing for dropping my account but I have yet to talk with someone in person to explain this who fiasco. At this time square has an “F” rating from based on the way they do business.