Square vs. PayPal: Which Is Right for Your Business?
Square and PayPal are both well-known payment service providers, but they have distinct pros and cons.
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Managing Editor Square and PayPal are payment service providers, or PSPs, that help small businesses accept payments in person and online. PayPal may be better for small businesses with an international customer base, but if price is a priority for you, Square may be your winner.
Here's how the two companies compare.
What to look for in a PSP
Payment service providers give small businesses a way to accept online payments through a payment gateway and a merchant account. Here are some things to keep in mind as you shop for a PSP:
- What kind of pricing structure do you want: interchange-plus, flat-rate or tiered. Of course, your industry, sales volume and priorities will influence your answer.
- Whether you need an integrated POS system. If you’re selling online, this may be less important.
- What is your industry? This may influence pricing and other options.
Square pros and cons at a glance
Pros
Transparent pricing.
Free version of its POS includes a lot of features.
Offers related services, such as payroll, that integrate with its POS system.
Cons
Can’t run on Windows devices.
Complex businesses might prefer a more specialized POS system.
PayPal pros and cons at a glance
Pros
One of the most commonly used payment processing platforms.
Easy to use and integrate with website hosts and shopping carts.
Transparent fixed fees in 25 currencies.
Cons
PayPal’s offerings are vast and can be difficult to grasp quickly.
Payment processing can be expensive for small purchases.
Not ideal for high-risk or high-volume businesses.
Square features
Square may be best known for its point-of-sale software and white devices plugged into checkout systems, but Square is also a payment service provider. It works with credit cards, debit cards, corporate cards, prepaid cards and reward cards.
Card payment acceptance with the Square app is available in the United States, Canada, Japan, Australia, Irish Republic, Spain, France and the United Kingdom. However, it doesn't support payment card processing in other U.S. territories, nor does it support cross-border card payments (i.e., you can't receive card transactions if you're outside the country where you activated your Square account).
Square integrates with Wix, BigCommerce, GoDaddy and other e-commerce platforms. The company's application programming interface also allows for customization. Businesses can also invoice customers digitally and take card payments without using the Square POS.
In addition to using its POS hardware systems for in-person payments, Square can process payments in three ways:
Online payments
Square offers online payment services that you can integrate into your online store or mobile app. You can also get a free e-commerce website, add pickup and delivery services, or sell on social media.
Remote payments
Square lets small businesses create and send digital invoices to customers, and those customers can then pay you with a card or by ACH. You can also send customers a link to pay by text or email.
Manual payments
If you need to accept payment over the phone and key the information in, you can do that with Square by either the Square app or by using the company's virtual terminal feature.
PayPal features
PayPal lets small businesses accept and process payments in person and online. It offers two payment gateway services: PayPal Payments Standard and PayPal Payments Pro. PayPal's services work with major e-commerce platforms such as BigCommerce, Wix and Shopify.
PayPal Payments Standard
This product may be best if you don't have coding experience or a developer on your team, as you'll simply need to copy and paste a line of code or integrate a plug-in with your shopping cart. Either option should take only 15 minutes to implement, according to PayPal's website.
PayPal Payments Pro
This is a customizable checkout solution that also provides access to a virtual terminal so you can accept credit cards online, by mobile or with devices that don't have an external card reader. Also, you can accept payments in 25 currencies from 200 countries, accept phone payments and get simplified payment card industry security standards.
Pricing: Square vs. PayPal
Both providers have transaction and other fees. Here's how they compare.
| PayPal | Square |
|---|---|
| Monthly fees | |
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| Transaction fees | |
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| Other fees | |
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Square vs. PayPal: Which PSP is right for your business?
Square may be your best option if you want customizable software at a relatively low price. But if a simple setup is more important, you may want to go with PayPal.
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