When comparing Square with PayPal, the biggest difference between the two is that Square offers a free magstripe credit card reader, point of sale system and superior payment management features. On the other hand, PayPal is one of the most recognized small business payment processors worldwide offering full integrations with all major e-Commerce platforms. Both allow you free invoicing and handle automated payments, the difference being that with Square, automated payments are free and PayPal charge $40 per month for this feature. The one negative with receiving payment with Square is that they do not accept PayPal as a form of payment on their platform. Square is the better choice for small businesses that want a low cost way to sell their merchandise online. Their free management features will allow you to manage your store from a centralized POS system. As far as cost goes, Square does not charge a monthly fee and is very competitive when it comes to transaction fees. PayPal is the best choice if you are focusing on running an online store as it is a secure system that offers virtual terminals and recurring payment options with mobile ready e-Commerce potential that reached up to 87.5% conversion at checkout. PayPal also offers global reach with clients in over 200 countries and availability in 25 currencies. Both Square and PayPal offer high security with fraud prevention and industry standard, security measures in place.
When Square was originally launched in 2009, it offered an innovative swipe based smartphone processing system with affordable pricing and no equipment costs. Their payment processing and point of sale services have since advanced to the point where they are now a powerhouse for merchants in the USA, Canada, Japan, Australia, Ireland and the United Kingdom. Square has earned a 5 star rating for their easy to use software, impressive features and affordable pricing. Their payment processing services are suitable for all types of industries regardless of their size, with small to medium sized businesses benefitting the most from their predictable flat rate pricing with no monthly fee and reasonable transaction rates. Square offers one of the most impressive set of features which include advanced mobile processing solutions and affordable chip card readers. One of the biggest draws to Square’s payment processing solutions is the free iPad POS and smartphone friendly mobile app that is offered on signing up.
PayPal is virtually a household name, with over 254 million active consumers and 17 million merchants currently using their payment platform. PayPal is extremely easy to use and set up and you can be up and running immediately. With transparent pricing and no long term contracts or early termination fees, PayPal offers integrations with most e-Commerce sites, accounting applications, shopping carts and shipping software. With PayPal you can also get a mobile point of sale application called PayPal Here which is a great option for businesses on the go. PayPal is ideal for low volume merchants who are looking for an all in one payment system and predictable flat rate pricing. They offer multiple pricing plans for you to choose from by simply signing up for their free business account. One of the latest additions is the PayPal mobile processing app which is free and allows you to accept payment from anywhere at any time. PayPal also offers merchants a debit card for businesses which will give you quick access to funds that are deposited in your PayPal account. With this card you can spend your balance directly from your account or draw funds from any ATM. This is a plus for small businesses who want to keep track of their online sales.
When a customer taps, dips, or swipes their card in person, you pay 2.6% + 10¢ per transaction.
When you manually key in your customer’s card details or use a card on file, the fee is 3.5% + 15¢.
When a customer makes a purchase through your Square Online Store, Square Online Checkout, eCommerce API, or pays an invoice online, the fee is 2.9% + 30¢.
PayPal has 3 options for web payments, PayPal Checkout, PayPal Standard and PayPal Payment Pro which is the only package that has a monthly fee of $30. Which one you choose will depend on the amount of transactions you process. All plans include e-Commerce integrations and unlike other merchant accounts you can implement PayPal as your exclusive means of accepting payments, or as a supplement to your existing payment platform.
There is no contract or monthly fees charged for payment processing but you will be charged 2.9% + $0.30 per transaction for online payments, 2.7% for swiped mobile and in-store transactions and 3.5% + $0.15 for all keyed in mobile and instore transactions. For virtual terminal transactions, you pay 3.1% + $0.30 per transaction. PayPal offers a virtual terminal that will allow you to accept payments over the phone, this comes in as an extra $30 per month. If you want an instant transfer option you will pay an extra 1% of the transfer amount. For any transactions that come in from outside the US, you will be charged 1.5% cross border fee. For chargebacks PayPal charges a $20 assessment fee.
PayPal also offers Micropayment rates of 5% + $0.03 for all merchants with low volume sales of under$10. This plan is only suitable for merchants that sell low priced items. PayPal works with most payment processors, but offers its own gateway, PayFlow to process payments. There are two support plans, the PayFlow Link which is a pay as you go option and costs $0.10 per transaction and the PayFlow Pro which is charged at $25 per month without per transaction fees. With so many options available you will have to work out which is the most suitable plan for your type of business.