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Square vs. PayPal
Square and PayPal are popular credit card processing options. See how they compare.
Table of Contents
Accepting credit cards, debit cards and digital payments can help you grow your business, and it’s easy to get started. Square and PayPal are among the best credit card processors for small businesses. In this guide, we’ve compared their pricing, processing services, software, hardware, integrations and security to help you find the right payment partner for your business.
Editor’s note: Looking for the right credit card processor for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.
Square vs. PayPal Highlights
Feature | Square | PayPal |
|---|---|---|
Best for | Brick-and-mortar businesses and restaurants | New businesses and e-commerce |
Plans and pricing | Base monthly price + transaction fee. Free plan available. |
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Payment processing | Online, in-person and virtual terminal; accept payments via credit and debit cards, invoicing, Apple Pay, Google Pay, Cash App, ACH, Afterpay, Square Pay | Online, in-person and virtual terminal; accept payments via credit and debit cards, invoicing, Venmo, PayPal payments, Apple Pay, Google Pay |
Third-party integrations | Over 400, including QuickBooks Online, Wix and DoorDash | BigCommerce, QuickBooks, Shopify, SalesVu, WooCommerce and more |
Hardware | Square Reader for contactless and chip, Square Reader for magstripe, Square Terminal, Square POS Register, Square Kiosk | Zettle card reader, all-in-one terminal |
Software | Integrate Square into your website via development tools; use Square Checkout to redirect customers to a Square-hosted payment page | Zettle for in-person payments; use PayPal in your online shop via built-in integrations or developer tools |
Security | End-to-end encryption, PCI compliance, EMV-compliant card readers | Encrypted customer data, end-to-end encryption, seller protection |
Customer service | Phone and chat support Monday-Friday, 6 a.m. to 6 p.m., PST; 24/7 phone support for Premium subscriptions or questions on Register or Terminal | Resolution Center (account and transaction issues), Message Center (you may be directed from here to call an agent) |
Approval and setup | Easy application and approval process; implementation may require a web developer | Easy application and approval process; turnkey implementation |
Who Is Square For?
Square is best for:
- Brick-and-mortar retailers
- Restaurants
- Appointment-based businesses
- Freelancers
- Subscription services
- E-commerce businesses
Square’s robust, industry-specific software simplifies managing unique business functions. For example, the Square restaurant software includes menu management, a kiosk function and kitchen displays for the back of the house. Its appointment software gives you a customizable online booking site and allows you to set automatic appointment reminders. As an added bonus, Square’s hardware is sleek and attractive for customer-facing environments.
Square is also ideal for businesses who use recurring billing, such as subscription services. E-commerce businesses with in-house web developers can benefit from Square’s free online store, integrated email marketing and social selling.
Check out our in-depth Square review for more details about this payment processor.
Who Is PayPal For?
PayPal is best suited as a payment processor for low-volume or seasonal businesses because it has no monthly fee — you’ll only pay transaction fees.
Getting approved is easy, and the quick and straightforward setup makes PayPal ideal for startups, new business owners and merchants who haven’t previously accepted credit cards. PayPal is also a great option for setting up an online store because it automatically integrates with top e-commerce platforms and marketplaces.
To get started with PayPal credit card processing, businesses simply set up a PayPal business account, select PayPal from their e-commerce interface, and enter the required information.
Read our in-depth PayPal credit card processing review for a comprehensive look at PayPal’s payment processing services.
Square vs. PayPal Service Comparisons
Here’s a closer look at each provider’s services and how they stack up against each other.
Plans and Pricing
Square
Square’s basic Free plan has no monthly fee and you only pay per transaction. However, if your business needs more capabilities, you’ll want to consider a paid plan and/or add-on features.
Here’s a summary of Square’s plans and fees.
Service plan | Monthly fee | Rate | Features |
|---|---|---|---|
Free | $0 | 2.6% + $0.10 (in person); 2.9% + $0.30 (online); 3.5% + $0.15 (manually entered); 3.3% + $0.30 (invoice) |
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Plus | $29 per month (billed annually) | 2.6% + $0.10 (in person); 2.9% + $0.30 (online); 3.5% + $0.15 (manually entered); 3.3% + $0.30 (invoice) | Everything in the Free plan, plus:
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Premium | $79 per month (billed annually) | 2.6% + $0.10 (in person); 2.6% + $0.30 (online); 3.5% + $0.15 (manually entered) | Everything in the Plus plan, plus:
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Email marketing add-on | Starting at $15 monthly |
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Payroll add-on | $35 plus $6 per person per month |
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Text message marketing | $10 per month plus messaging rates (ranging from $20 to $195) |
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Loyalty program |
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PayPal
If you want to accept payments with PayPal, the platform offers several checkout options you can mix and match according to your needs. Here’s a breakdown, along with PayPal’s credit card fees:
Payment program | Used for | Rates |
|---|---|---|
PayPal Checkout | Integrated solution for accepting payments online (through your website, e-commerce platform and apps) | 3.49% + $0.49 |
PayPal (regular) | Accepting payments on the PayPal app, online or via social media; customers are sent to PayPal from the checkout screen | 2.99% + $0.49 |
PayPal Virtual Terminal | Payments by phone or mail; manually entered in-person payments | 3.09% + $0.49 |
PayPal Invoicing and Subscriptions | Sending customers invoices for one-time or recurring billing | 3.49% + $0.49 (when customer pays by PayPal, Venmo and Pay Later),2.99% + $0.49 (when customer pays with a credit or debit card or Apple Pay) |
PayPal Zettle | Brick-and-mortar and mobile POS sales | 2.29% +$0.09 (card present); 3.49% + $0.09 (keyed-in card numbers); 2.29% + $0.09 (QR code) |
There’s no monthly fee for any of PayPal’s programs. The modular nature of PayPal’s offerings makes it easy to choose only what your business needs. In addition to PayPal payments, you can accept all major credit cards, Venmo, PayPal Credit (buy now, pay later), 10 different international bank redirects, ACH, Apple Pay, Google Pay, Samsung Pay and more.
Payment Processing
Square
We appreciate that Square provides multiple ways for merchants to accept payments, including online and via invoicing, hosted checkout payment pages, POS systems, and virtual terminals. In addition to major credit cards, Square allows you to accept Apple Pay, Google Pay, Samsung Pay, Cash App Pay, Afterpay and ACH payments (through Square Invoices).
Square holds your sales revenue in a Square Checking account, where funds are available immediately. You can spend them using the Square Debit Card or transfer them to an external bank account. For external transfers, funds are available within one business day for free or instantly for a 1.5 percent fee.
PayPal
We like that PayPal helps you accept numerous payment methods, including popular digital options like Venmo. All business payments go to your PayPal Business account, and you can see transaction data in your dashboard.
Transferring money from your PayPal account to your business bank account is free with a standard transfer, which takes one to three business days. You can also do an instant transfer for a fee or access the money through your PayPal debit Mastercard.
One of the major complaints PayPal merchants make is that PayPal has frozen their accounts or held their money because of suspected fraud. While we like that PayPal is sensitive to potential credit card fraud, holding money can cause cash flow problems for merchants who aren’t able to access their revenue. PayPal also has a high chargeback fee of $20 for transactions not covered under Seller Protection.
Third-Party Integrations
Square
Square integrates with hundreds of apps, including industry-specific apps in the retail, restaurant and personal care sectors. Here are some examples:
Industry | Integrations |
|---|---|
Retail |
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Beauty and personal care |
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Restaurants |
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Square also integrates with platforms for more general use across industries, including:
- GoDaddy for web hosting
- Mailchimp for email marketing
- Gift Up to create gift cards
- ZipRecruiter for hiring
- TapMango for loyalty and marketing
PayPal
Since PayPal was an early leader in this type of online payment technology, it is already integrated with many of the best e-commerce platforms and shopping cart software, including the following:
- Big Cartel
- CS-Cart
- Shift4Shop (formerly 3dcart)
- BigCommerce
- Magento
- Shopify
- Volusion
- Wix
- Squarespace
PayPal’s Zettle system integrates with BigCommerce, QuickBooks Online, Shopify, SalesVu and WooCommerce. Zettle card readers can interface with most third-party POS systems.
Hardware
Square
Square designs and builds its own card-processing hardware, which includes the following:
- Square Reader for Magstripe: The compact Square Reader for mobile payments connects to a smartphone or tablet via the headphone jack or Lightning adapter, depending on your device. Your first Square Reader is free when you sign up with Square.
- Square Reader for Contactless and Chip: The Square Reader for Contactless and Chip is another mobile card reader that connects to your mobile phone or tablet via Bluetooth. It allows you to accept credit cards, Apple Pay and Google Pay. It costs $59.
The Square Reader for Contactless and Chip accepts contactless (NFC) payments and chip cards. Source: Square
- Square Terminal: The Square Terminal connects via Wi-Fi or Ethernet and accepts cards via swipe, tap and insertion. It can also print receipts. The Square Terminal costs $299.
The Square Terminal accepts cards via swipe, tap and insertion. Source: Square
- Square POS register: For fixed locations, Square has a POS register with a cashier-facing product screen and a customer-facing payment interface. The Square register takes all major credit cards by tapping, swiping and inserting. It can be used alone or with accessories like a receipt printer, handheld scanner and cash box. The register costs $799.
The Square POS register is a fully integrated POS system with a second customer-facing display. Source: Square
Additional hardware options include the following:
- USB receipt printer for $299
- USB barcode scanner for $119
- 16-inch USB cash drawer for $299
- Square Stand for iPad for $149
- Square Kiosk for $149
PayPal
PayPal provides the following options for accepting payments:
- Zettle card reader: The Zettle card reader is wireless and accepts swiped, chipped and tapped cards (for NFC mobile payments), as well as contactless digital wallets like Apple Pay and Google Pay. It also has a numeric PIN pad for debit card transactions. Your first Zettle card reader costs $29; additional units are $79 each.
PayPal’s wireless Zettle card reader and stand pairs with its POS app on a smartphone or tablet. Source: PayPal
- All-in-one terminal: This portable point-of-sale terminal has the PayPal Zettle app built in and can accept payments, update stock and check inventory. It costs $199 for the POS terminal alone and $239 for the POS terminal with a built-in barcode scanner. Terminal kits with printer and dock start at $269.
The PayPal Zettle app is built into the all-in-one terminal. It can also include integrated features like a barcode scanner and a receipt printer. Source: PayPal
- PayPal Zettle app: The PayPal Zettle app’s Tap to Pay feature lets you use your iOS or Android device to accept payment without additional hardware or fees.
Additional hardware options include the following:
Hardware type | Cost |
|---|---|
Charging dock | $49 |
Zettle Stand 360 (cashier station iPad stand) | $159 |
Portable receipt printer | $269 |
Wired receipt printer | $299 |
Cash drawer | $119 |
Wireless handheld barcode scanner | $229 |
Software
Square
If your business sells through multiple channels, Square makes it easy to see all your sales in one place.
For online transactions, Square allows you to process individual transactions on your site, set up recurring transactions and even process multiparty transactions by layering in a fee on top of third-party payments that you process through your app. You can use developer tools to integrate Square with your website or use Square Checkout to redirect customers to a Square-hosted payment page.
The Square mobile app allows you to enter card information manually and integrates with Square’s mobile card readers.
PayPal
Many platforms offer built-in integrations that require no coding to integrate PayPal with an online shop. This allows the entire transaction to take place on your website instead of temporarily redirecting to the PayPal site, as with the simplified no-code method.
PayPal’s standalone Zettle is ideal for in-person POS sales and integrates seamlessly with PayPal for multichannel operations (but you’ll still rely on PayPal’s other services for online transactions). This cloud-based POS software offers a front-end experience for cashiers to select products or services for checkout and a robust back end with transaction and reporting data, invoicing and digital receipt capabilities, inventory management features and more.
If you don’t accept in-person POS sales, you can use the PayPal Business mobile or desktop app to view transaction information. It offers transaction data and sales reports, as well as the ability to transfer money, issue invoices and estimates, and keep track of customers.
Security
Square
We like that Square encrypts customers’ payment information end-to-end, helping it maintain PCI compliance. Its card readers are EMV compliant, which means they accept chips, decreasing fraud opportunities. In addition, Square uses machine learning models to identify and isolate suspicious transactions. Square has no chargeback fees and, in a dispute, represents you with the issuing bank.
PayPal
We appreciate that security is already embedded for customers who pay with their PayPal account, since they only need their login and password. No card information or bank details are transmitted; PayPal keeps that data encrypted on its servers. It uses end-to-end encryption and machine learning to reduce fraud.
Like Square’s hardware, PayPal’s standard Zettle card readers are PCI compliant and accept chip cards. The Zettle card readers come equipped with a PIN entry pad for debit transactions for additional security.
We were also impressed that PayPal includes seller protection at no additional cost. This feature protects your PayPal balance while disputes are being investigated.
Customer Service
Square
Square support is available by phone and live chat Monday through Friday, 6 a.m. to 6 p.m. PST. Premium subscribers get 24/7 phone support. You can also reach out via social media.
Our research showed Square’s customer service record is spotty. The systems seem to work well for regular, day-to-day operations. Still, when there is a problem, merchants may have difficulty getting help to resolve the issue.
PayPal
PayPal provides customer service via its Message Center. You log into your business account, access the Message Center, and try to solve your problem via the PayPal Assistant. If it can’t help you, depending on the issue, you’ll be directed to call or message an agent.
If you’re not logged into your account, you can call a number as a guest. Hours are 6 a.m. to 6 p.m., Monday through Sunday. Additionally, there’s a Resolution Center where you can address account and transaction issues.
We found that customers complain the service isn’t great; the biggest issues seem to be long holds on accounts and the inability to quickly release funds.
Application and Setup
Square
Square’s application is online and only takes a few minutes to complete. Once approved, you should find setting up your Square account relatively easy.
The time it takes depends on the functionality your business needs. If your primary revenue stream is online sales, you may need a web developer to help you set it up. Square also offers Square Checkout, which does not require coding, as well as prebuilt third-party solutions that make it quick and seamless to set up.
PayPal
If you already have a personal PayPal account, adding a business account takes only a minute. Setup time depends on whether you have an e-commerce operation or a brick-and-mortar location. Since PayPal is pre-integrated with many online shopping carts, setting up shop with PayPal for e-commerce is quick and easy.
Square vs. PayPal Summary
Square is best for brick-and-mortar retailers and restaurants.
Square is the better choice for fixed-location, in-person retailers and restaurants because of its specialized software and numerous platform integrations. Its attractive, sleek hardware works well for customer-facing locations. Square is also a great option for businesses that issue invoices and set appointments, such as medical, marketing or healthcare operations. Square has the edge in customer service and is less likely to hold or freeze your money.
PayPal is best for startups and newer businesses.
PayPal is the best choice for startups and newer businesses because of its fast, easy application process and high approval rate. Less technical e-commerce businesses can easily set up and manage payments on their website without hiring a developer. PayPal allows businesses to accept multiple digital payment methods, including Venmo, which will appeal to younger consumers.
FAQs
processing?
Yes. While applications are approved on a case-by-case basis, Square typically does not approve businesses engaged in high-risk or prohibited activities, including illegal goods, gambling, adult entertainment, buyer or membership clubs, credit counseling or repair, identity theft protection, direct marketing, infomercial sales, internet pharmacies, multi-level marketing and telemarketing. A complete list of prohibited goods and services is available on Square's website. Notably, PayPal does not restrict certain types of merchants and is willing to handle credit card payments for high-risk industries, although it tends to hold funds for operations it deems risky.
