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Square vs. PayPal

Jennifer Dublino
Jennifer Dublino

Choosing a credit card processor can be a tough decision. Here is how PayPal and Square stack up against each other.

In today’s environment, only accepting cash and not accepting debit or credit cards won’t get you very far. In order to accept credit cards, you need to partner with a top credit card processor. There are lots of options, so it is important to compare and contrast what’s out there. Two solutions you may want to take a closer look at are PayPal and Square. 

To help in your research, we have made the comparisons for you. We examined both of these services and evaluated them on various criteria, including pricing, processing services, software, hardware, integrations and security. 

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

PayPal and Square both provide merchants with an easy and convenient way to accept credit cards and other payment methods. In addition, they both have suitable card processing hardware and integrations with multiple platforms. There are some distinctions, and which one you choose may depend on your industry and how you do most of your business.

Best forBrick-and-mortar businessesMobile transactions, e-commerce
Pricing$0 – $72 monthly fee; 2.6% – 2.9% + $0.302.9% + $0.30 (app) 3.49% + $0.49 (checkout)
Third-party integrationsOver 350, including QuickBooks, Wix, and DoorDashBigCommerce, QuickBooks, Shopify, SalesVu, WooCommerce and more
HardwareSquare mobile reader, Square Terminal, Square POS RegisterZettle card reader
Payment methodsOnline checkout, virtual terminal, invoicing, POS hardware, Apple/Google Pay, Cash App, ACHOnline checkout, virtual terminal, POS hardware, invoicing, Venmo
Customer service24/7 support by phone, chat, and emailPhone, chat, and Resolution Center

Who is PayPal for? 

PayPal is best suited for brick-and-mortar retail businesses and nontechnical e-commerce businesses.

Who is Square for? 

Square is best for professionals and freelancers who have recurring billing, and restaurants and e-commerce businesses with in-house web developers.

PayPal vs. Stripe service comparisons

In this section, we take a closer look at the services each provider offers and how they stack up against one another. 

Plans and pricing

PayPal plans and pricing

For your business to accept payments via PayPal, you need to have a PayPal business account. To get that, you first need a personal PayPal account. Both accounts are free and easy to set up. 

PayPal has five major programs that you can mix and match according to your needs: 

Payment programUsed forRates
PayPal CheckoutPayments online (through your website, e-commerce platform and/or apps)3.49% + $0.49
PayPal Virtual TerminalPayments by phone or mail, or in person if manually entered3.09% + $0.49
Regular PayPalAccepting payments on the PayPal app, with a link on social media, or by sending a link with PayPal.Me2.9% + $0.30
PayPal Invoicing and SubscriptionsSending customers invoices for one-time or recurring billing3.49% + $0.49
PayPal ZettleBrick-and-mortar and mobile POS salesCard present: 2.29% +$0.09
Keyed-in card numbers: 3.49% + $0.09
QR code under $10: 2.4% + $0.05
QR code over $10: 1.9% + $0.10

None of these programs charge merchants a monthly fee. The modular nature of PayPal’s offerings makes it easy to choose only what your business needs. In addition to regular PayPal payments, PayPal allows you to 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.

Square plans and pricing

Square’s plans each have different capabilities. Most of the plans have a rate of 2.9% + $0.30 per transaction. However, some also have monthly fees attached. Below is a summary of Square’s plans.

Service planMonthly feeRateFeatures
Free$02.9% + $0.30
  • Unlimited products 
  • Ability to sell on Instagram and Facebook
  • Pickup, delivery and shipping options
  • Self-serve ordering
  • SEO tools
  • Sync with Square POS 
Professional$122.9% + $0.30
  • Everything in the free plan
  • Custom domain (free for one year)
  • No Square ads
  • Custom font uploads
  • Password-protected pages
Performance$262.9% + $0.30
  • Everything in the Professional plan
  • Ability to accept PayPal
  • Abandoned cart functionality
  • Advanced reporting
  • Product reviews
  • Gifting options
Premium$722.6% + $0.30
  • Everything in the Performance plan
  • Lower processing rate
  • Discounted shipping
  • Real-time shipping
Did You Know?

Square provides free web hosting to new online stores. A free SSL certificate is included.

Square allows you to accept all major credit cards, PayPal (only on the Premium plan), Apple Pay, Google Pay, and its proprietary digital wallet, Square Pay.


The winner here comes down to how you plan to accept payments and what type of business you operate. We like the flexibility of PayPal’s modular offerings. If you are a brick-and-mortar business, PayPal offers the lowest rate. However, PayPal’s invoicing, subscriptions and online payment rates are significantly higher than Square’s. The other issue is volume. If you have a high transaction volume, you may end up saving money by using Square. For low-volume businesses, the monthly fee can make a big difference in overall cost. 

In the end, if you operate an e-commerce business, especially one with a high transaction volume, or if you are a professional or freelancer who issues invoices, Square is your best bet for pricing. Brick-and-mortar businesses will likely find more favorable pricing with PayPal.


Before choosing any credit card processor, make sure you understand the fees and rates each credit card processing company charges.


PayPal processing

PayPal gives you a plethora of ways to get paid. A great feature of PayPal is its intuitive button generator, which can be quite useful for e-commerce businesses. This can detect if the customer has Venmo, and if they do, it will display a button allowing them to pay with Venmo. This can help increase sales, since people who have these payment methods available to them prefer to use them, and seeing their payment method of choice helps ensure a convenient payment experience for customers.   

All business payments go into your personal PayPal account. You will be able to see all of your transaction data in your business account dashboard. Still, when it comes time to transfer the funds to your business bank account, you have to portion out your business revenue from any personal income in the account. You can only have one PayPal business account, so it is not suitable for entrepreneurs with multiple businesses. 

It is free to transfer money from your PayPal account to your bank account if you do 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.


Since it is available in 202 countries and 25 currencies, PayPal easily enables international commerce. It also accepts various payment types from local markets around the globe.

One of the major complaints that PayPal merchants have is that PayPal has frozen their accounts or held their money because of suspected fraud. PayPal is sensitive to potential fraud, and this can cause cash flow issues for merchants when they cannot access their sales revenue. It also has a high chargeback fee of $20.

Square processing 

Square provides multiple ways for merchants to accept payments, including online and via invoicing, hosted checkout payment pages, point-of-sale (POS) systems, and virtual terminals. In addition to major credit cards, Square allows you to accept Apple Pay, Google Pay, Samsung Pay, Cash App, and ACH for invoices.

Square holds your sales revenue in a Square Checking account. If you want money transferred to another bank account, you can get it within one business day, or instantly for an additional fee.


Square is much less likely to freeze or hold your money, so it’s our choice in this category. It is also quicker to transfer your money from Square to your bank account.


PayPal security

Security is already embedded for customers paying with their PayPal account, since they only need their login and password. No card information or bank details are transmitted, and PayPal keeps those encrypted on its servers. It confirms all transactions by email. PayPal uses end-to-end encryption and machine learning to reduce fraud. 

PayPal includes Seller Protection at no additional cost, which protects your PayPal balance while disputes are being investigated. PayPal is also PCI compliant. Additionally, its standard Zettle card readers accept EMV (chip) cards, offering a higher level of security, and come equipped with a PIN entry pad for debit transactions, making them more secure.

Square security

Square has end-to-end encryption of customers’ payment information, helping it maintain PCI compliance. Square provides PCI compliance for no additional fee. Its card readers are EMV compliant, which means that they accept chips, thereby decreasing fraud opportunities. In addition, Square uses machine learning models to ferret out and isolate suspicious transactions. Square has no chargeback fees and, in a dispute, represents you with the issuing bank.


You are in safe hands with both PayPal and Square. So, when it comes to payment security, PayPal and Square are both winners in our eyes.


PayPal software

As far as software goes, Zettle is entirely separate from every other PayPal payment method. If you have a multichannel business, you can use Zettle for everything.

Zettle provides POS software with a front-end experience for cashiers to select products or services for checkout. It also has a robust back end that shows transactions on every payment method (in person, online, etc.), creates sales reports, sends invoices, allows you to sell and accept gift cards, sends digital receipts, issues refunds, and helps manage inventory. 

If you do not accept in-person POS sales, you can use the PayPal Business app to view transaction information. You can access PayPal Business on the mobile app or by logging in from your computer. It offers transaction data and sales reports, as well as the ability to transfer money, issue invoices and estimates, and keep track of customers. 

To integrate PayPal with an online shop, you will likely need a web programmer. The integration allows the entire transaction to take place on your website rather than temporarily redirecting to the PayPal site, like it would with the simplified no-code method.

Both the Zettle and PayPal Business apps are easy to use and free to download.

Square software

If your business sells through multiple channels, Square makes it easy to see all of 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 multi-party 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 also integrates with Square’s mobile card readers.

Did You Know?

The Square software is a complete CRM system, linking purchases to customer profiles and inventory across all payment methods.


PayPal and Square have very similar software capabilities, especially when it comes to POS, so that would be a tie. The Square software seems to be a little more specialized for restaurants, so Square wins on that front. If you are a freelancer or another type of business that generates invoices, the ability to do that and send estimates from the mobile app is a plus, which gives PayPal the edge.


PayPal hardware

Zettle’s card reader is wireless and accepts swiped, chipped, and tapped (NFC) cards, 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 costs $29; additional units are $79 each. 

Since it is wireless, the Zettle card reader can be used as a fixed or mobile solution. These are some additional hardware options:

Hardware typeCost
Charging dock$49
Cashier station iPad stand$159
Portable receipt printer$269
Wired receipt printer$299
Cash drawer$119
Wireless handheld scanner$229

Square hardware

Square designs and builds its own card processing hardware. It has the compact Square Reader for mobile payments, which plugs into a smartphone or tablet’s headphone jack (for Android) or charging port (for Apple). The Square Reader only allows you to swipe the magnetic stripe cards and does not support chip cards or NFC (tap) capability. Your first Square Reader is free when you sign up with Square. 

The Square Reader for Contactless & Chip is another mobile card reader that connects to your mobile phone or tablet via Bluetooth. It allows you to accept not only credit cards, but also Apple Pay and Google Pay. It costs $49. The Square Terminal uses Bluetooth and accepts cards by swiping, tapping, and inserting for even more functionality. It can also print receipts. The Square Terminal is $299.

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, or $39 a month for 24 months. These are some other hardware options:

  • USB receipt printer for $299
  • USB barcode scanner for $119
  • 16-inch USB cash drawer for $249


For mobile payments, PayPal’s hardware is superior. Its mobile card reader is comparable to the Square Terminal in functionality, but much cheaper. However, if you have a brick-and-mortar store or restaurant, you may prefer the Square system, because it is more attractive with a sleek and integrated look and includes a customer-facing digital interface. Unfortunately, this style comes with a hefty price tag. Overall, we say PayPal has the edge in this category.


Learn more about what Square has to offer in our comprehensive Square review.


PayPal integrations

PayPal’s Zettle system integrates with BigCommerce, QuickBooks, Shopify, SalesVu and WooCommerce. Zettle card readers can interface with most third-party POS systems. 

Since PayPal was the leader in this type of online payment technology, it is already integrated with most e-commerce solutions and shopping cart products. All you need to do is put your specific information in there to link it. Here is a list of its e-commerce integrations:

  • Big Cartel
  • CS-Cart
  • 3dcart
  • BigCommerce
  • Magento 
  • Shopify
  • Volusion

Square integrations

Square integrates with hundreds of apps, including industry-specific apps in the retail, restaurant and personal care sectors. Here are some examples:

  • Shopventory for inventory management 
  • WooCommerce, BigCommerce and Wix for e-commerce
  • Shippo for fulfillment, shipping and returns
Beauty and personal care
  • Square Appointments for scheduling, payments and staff availability
  • Jotform, Cognito Forms, and IntakeQ for forms and waivers
  • Square KDS for restaurant management
  • Postmates for delivery
  • Kyoo for mobile ordering, kiosks and curbside pickup
  • BevSpot and PeachWorks for food and beverage inventory management
  • Homebase and QuickBooks Time for employee time tracking

Square also integrates with platforms for more general use across industries, such as these:

  • GoDaddy for web hosting
  • Mailchimp for email marketing
  • Gift Up to create gift cards
  • ZipRecruiter for hiring
  • TapMango for loyalty and marketing


For the sheer volume of integrations, Square is the winner. However, some of these integrations may require a programmer to get them up and running. The non-techies may prefer pre-integrated PayPal for ease of use. 

Customer service

PayPal customer service

PayPal provides customer service by phone, instant messaging, or online with its Resolution Center and community resources. Generally speaking, we found that customers complain the service is not great, with their biggest complaint being the long holds on accounts with no ability to quicken the process of releasing funds.

Square customer service

Square support is available by phone, email, live chat and social media. Square’s customer service record is spotty. For regular, day-to-day operations, the systems seem to work well, but when there is a problem, merchants may have difficulty getting help resolving the issue.


For customer service, Square squeaks by as the winner.

Approval and setup

PayPal approval and setup

If you have a personal PayPal account, it takes only a minute to add a business account. If you’re starting one for the first time, it is only a little longer. PayPal does not have a list of business types it will not work with, but it is risk-averse and tends to hold funds for operations it deems high-risk.

Setup time varies based on whether you have an e-commerce operation or a brick-and-mortar location. Since PayPal is pre-integrated with many online shopping carts, it is quick and easy to get up and running with PayPal for e-commerce. 

Square approval and setup 

As with PayPal, Square’s application is online and only takes a few minutes to complete. Once you are approved, it is relatively easy to set up your Square account. The time it takes depends on what level of functionality your business needs. If your main revenue stream is online sales, you will likely need a web developer to help you set it up. Square does offer Square Checkout, which does not require coding, as well as prebuilt third-party solutions that make it quick and seamless to set up. 

Unlike PayPal, Square has a long list of business types that it is unwilling to serve. 


For its turnkey integration and setup for nontechnical merchants, we give PayPal the edge in this category.

PayPal vs. Square summary

  • Square is best for fixed-location, in-person retailers and restaurants because of its specialized software and numerous platform integrations. 
  • Square has slightly better customer service and is less likely to hold or freeze your money.
  • PayPal is best for mobile in-person transactions because of its versatile and affordable mobile card reader.
  • PayPal is better for nontechnical e-commerce business owners who do not have a web developer on their team.
  • PayPal is a better choice if you have a lot of millennial or Gen Z customers, because it allows you to accept Venmo.


Is there a monthly fee for Square? 

Only if you get the most basic plan. Otherwise, the monthly fee ranges from $12 to $72.

Can you set up automatic transfers of money from your PayPal account to your bank account? 

Yes, you can contact PayPal’s business support department to set up a feature called Auto Sweep. This may help with problems related to freezes and holds of funds. 

Do you need to have a company set up in order to take payments with PayPal?

No, anyone can get a PayPal business account. When you are setting up your account, choose “sole trader” as your business type if you haven’t set up a company.

Image Credit: monkeybusinessimages / Getty Images
Jennifer Dublino
Jennifer Dublino
Contributing Writer
Jennifer Dublino is a prolific researcher, writer, and editor, specializing in topical, engaging, and informative content. She has written numerous e-books, slideshows, websites, landing pages, sales pages, email campaigns, blog posts, press releases and thought leadership articles. Topics include consumer financial services, home buying and finance, general business topics, health and wellness, neuroscience and neuromarketing, and B2B industrial products.