Square vs. PayPal: Price, Features & What’s Best in 2019

Comparing Square vs. PayPal, Square offers better-integrated payment tools than PayPal, but PayPal pulls ahead in ecommerce payments, and online invoicing features are tied. PayPal’s 2.7% per-swipe fee is lower than Square’s 2.75% per-swipe fee. However, most users think Square’s free point-of-sale (POS) system and business management system makes its slightly higher fee worthwhile.

Overall, we consider Square the better overall option here. It has low flat-rate processing fees and no startup, monthly, or cancellation fees. You also get free POS software for your business and a free mobile credit card reader when you sign up. Start a free account.

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Square vs. PayPal Review at a Glance

When to Use Square

We recommend Square for businesses and individual sellers who want a low-cost way to sell anywhere, accept all types of payments, and manage everything in a centralized POS system. This includes:

• In-store retailers
• Sellers using mobile devices to accept payments
• Service providers sending invoices or using automated payments
• eCommerce store owners
• Multichannel sellers that combine in-store, online, and mobile sales

In your free Square account, you get access to all payment options plus a full suite of inventory, sales, customer, and employee management tools. You even get a free magstripe credit card reader upon signup. If you’re looking for a payment solution that lets you start with zero cost, supports all types of sales, and helps you manage your entire business, Square is the best solution for you.

With Square, your only costs are your credit card processing fees. These fees are very competitive with PayPal and can be even cheaper in some instances. However, what sets Square ahead of PayPal is its feature-packed POS software that lets you manage every aspect of your business: inventory, sales, employees, customers, and more ― all for free. Create a free Square account.

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When to Use PayPal

PayPal is an online payments powerhouse. If your focus is running an online store, you should seriously consider using PayPal as your payments provider. Online buyers love having PayPal as a payment option, and PayPal’s secure system integrates with virtually all ecommerce platforms.

You can do plenty with PayPal beyond online selling, too. PayPal Here is PayPal’s mobile payments service, and with it, you can accept payments using mobile devices and even set up in-store checkout registers with approved third-party hardware. PayPal even offers virtual terminal and recurring payments options, but both of these come with monthly costs, unlike Square which provides them for free.

If you sell online and use your ecommerce platform or an order management system to manage inventory, sales, and customers, PayPal’s POS won’t matter to you. However, if you want to tie together brick-and-mortar, online, mobile, and other types of sales under one roof, Square’s free POS beats PayPal hands down.

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When to Use an Alternative

If you’re looking for an alternative to Square and PayPal, check out Payment Depot. It’s a merchant service provider that provides payment processing at extremely competitive rates using a membership pricing model.

Payment Depot’s pricing is ideal for businesses that process over $20,000 per month. You just pay a flat monthly fee based on the size of your business plus the direct interchange fees. No markups, hidden fees, cancellation fees, or contracts. Unlike most merchant account providers, pricing is the same for online and in-person payments, and both types of payments are included with every membership. Read our Payment Depot user reviews to learn more.

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How We Evaluated Square vs. PayPal

At first glance, Square vs. PayPal are very similar. Differences become apparent when you consider the many ways that today’s businesses sell. Some businesses sell primarily online while others sell everywhere; in-store, via mobile card readers, and online.

Based on the many sales scenarios today’s small businesses face, we evaluated Square vs. PayPal using the following criteria:

• Account fees: Square and PayPal have free accounts, but PayPal charges a monthly fee for advanced features which are free with Square
• Credit card processing fees:  Both services offer a range of in-person and online credit card payment processing services with competitive fees
• Payout times:  PayPal makes funds available immediately while Square deposits take one to two business days
• Ease of use:  Both payment services offer simple mobile payment apps, plug-and-play ecommerce integrations, and intuitive online dashboards for setup and management
• Accept PayPal payments: Only PayPal lets your customers pay using their PayPal account online and for mobile sales
• Online Invoicing:  Both payment services include online invoicing features for free
• eCommerce integrations:  PayPal tops Square with almost universal ecommerce platform integration for payment processing; however, Square is a very close second
• Retail POS & business management features:  Square soundly tops PayPal in advanced business management features like retail a POS system, appointment scheduling, and free online store

Businesses that primarily sell online can benefit from PayPal’s near-universal ecommerce integrations. Sellers that want to sell everywhere; in-store, via mobile card readers, and online will appreciate the power of Square’s all-in-one sales, payment, and business management system. For most startups and small businesses, Square is our recommended solution.

Square vs. PayPal Pricing & Features

Now, we’ll take a closer look at how Square vs. PayPal compare in features and costs based on specific sales scenarios.

Best for Mobile Credit Card Processing: Square

Square tops PayPal in mobile payment processing for several reasons. PayPal’s mobile features can’t match Square’s robust mobile POS. Square delivers a full range of sales, inventory, customer, employee, and business management features, unlike PayPal’s rather basic item lists and payment tools. Square also operates in an offline mode to run payments without connection, unlike PayPal. That alone made this decision easy.

With a connection or without, Square’s mobile POS and card readers make it easy to accept credit card payments on-the-go via tablet or cellphone.

Aside from that, Square and PayPal are quite similar in mobile processing. Both let you accept payments using mobile devices like smartphones or tablets, and provide reliable, low-cost card readers. Their mobile payment processing fees are nearly identical as you can see below.

Square vs. PayPal: Mobile Payment Processing Fees & Hardware Costs

Mobile Payment Fees	Square	PayPal
Account Fees	$0	$0
Swipe, Tap & Dip Sales: Mobile payments & In-store POS sales	2.75%	2.7%
Keyed-in Payment Manually enter a card into mobile POS	3.5% + 15 cents per transaction
Card Reader Options	Square	PayPal
Magstripe Reader For card-swipe payments	Free with signup	Free with signup
Chip & Tap Reader Accepts more secure chip card and e-wallet payments	$49	$24.99

Both Square and PayPal offer many of the same mobile selling features, too, including:

• Support multiple mobile users on one account
• Accept all major credit cards, plus e-wallets payments like Apple Pay and Android Pay
• Accept swipe, chip cards, and contactless (e-wallet) payments
• Support a product list
• Record customer data and send e-receipts
• Record check and cash payments
• Include a variety of business sales reports

However, Square’s mobile sales features top PayPal in three key areas:

1. Square Mobile POS works offline: If you lose your cellular or Wi-Fi connection, Square lets you swipe cards and complete sales in offline mode. Square’s mobile POS app retains and updates data once the connection is restored. Without a connection, you can’t accept PayPal Here payments.
2. Square Mobile POS has more features: Square beats PayPal’s mobile POS in many areas, most notably in inventory counts, employee time tracking, and various customer management features.
3. Square Mobile POS includes a free virtual terminal: A virtual terminal is what allows you to key-in payments rather than swiping a card. You can key-in an occasional payment into PayPal’s mobile POS app. However, if you do this often, PayPal requires the virtual terminal feature to your account which costs $30 per month. Square includes this feature for free without limitations.

However, the PayPal Here mobile POS offers something that Square can’t top ― buyers can pay using their PayPal account. That may not be a big deal for some sellers, but if you’re leaning toward PayPal for other reasons, it’s a nice plus.

Best for POS Payment Processing & Store Operations: Square

Square soundly beats PayPal for managing in-store sales. Square’s major brick-and-mortar strength is its free, and quite robust, POS software. It delivers an array of business management tools geared to help retailers, dining establishments, service providers, and others run efficient, profitable day-to-day operations. Plus, it offers a range of sleek in-store checkout registers suited to any sales need and budget.

Square’s sleek iPad registers are a cost-effective fit for any sales counter.

PayPal is moving into the in-store sales arena and offers iPad-based registers, but its POS system has a long way to go. For managing in-store sales, Square’s full suite of inventory, sales, employee, and customer management tools beats PayPal here, period. Here’s how they stack up in costs and key features:

Square vs. PayPal: In-store Payment Processing Fees & Hardware Costs

In-store Payments	Square	PayPal
Account Fees	$0	$0 $30/month to access the virtual terminal to key-in payments
Swipe, Tap & Dip Sales: Mobile payments & In-store POS sales	2.75%	2.7%
Keyed-in Payment Manually enter a card into mobile POS	3.5% + 15 cents per transaction
POS Checkout Options	Square	PayPal
iPad POS Register	Square iPad Stand: $169 without iPad $498 with iPad (one-time purchase) Includes card reader, dock, and USB hub for adding a printer or cash drawer	Windfall iPad Stand $129 iPad not included Connects to peripherals like card readers, cash drawers, and printers; sold separately
All-in-One Registers	Square Register: $999 or $49/month for 24 months All-in-one register with shopper-facing display; card processing rates are 2.5% + 10 cents per sale	None
Other Card Reader Terminal Options	Square Terminal: $399 or $37/month for 12 months Accept chip, swipe, and tap payments, record cash and check payments, and print receipts; card processing rates are 2.6% + 10 cents per sale	None

If you run a retail store, Square’s free POS software puts a full assortment of management tools at your fingertips. PayPal Here provides some POS management features, but they are limited by comparison. One thing to note is that PayPal Here also accepts PayPal payments from in-store customers. This can be a nice plus but isn’t a game-changing feature for most retailers.

Here’s a side-by-side look at Square vs. PayPal for POS features that most brick-and-mortar sellers need.

Square vs. PayPal: POS Sales & Operations Management Features

*Advanced features available for low monthly fees.

Best for Online & eCommerce Payment Processing: PayPal

PayPal tops Square in online payments with seamless integrations with virtually all ecommerce platforms. Much of this is driven by the fact that PayPal is a widely popular payment choice of online shoppers.

Shopify is one of many ecommerce platforms that integrate with PayPal seamlessly for all online payment processing ― credit, debit, and PayPal.

In fact, studies show that accepting PayPal increases online sales by as much as 44 percent compared to credit cards alone. Add to that PayPal’s secure integration with virtually every ecommerce platform on the market, and PayPal is an excellent payment processing choice for online sellers. However, if you’re solely an online seller, you may want to consider some PayPal alternatives.

Square’s big downfall in the online payments matchup is that it doesn’t accept PayPal payments. However, Square is no online sales slacker. It works with many ecommerce platforms too. You can even start selling for free with the Square online store included in your account, something PayPal doesn’t offer.

PayPal vs. Square: Online Sales Features & Payment Processing Fees

If you want to use Square for your business but still accept PayPal payments online, there is a back-door solution. Most top ecommerce platforms let you accept PayPal payments even if you use another payment processor like Square for credit cards. You need to open a free PayPal Express Checkout account, and then connect it to your ecommerce platform.

Another online selling plus with Square is its full integration with top ecommerce platforms like BigCommerce and Ecwid. This connects your online store to your Square POS so that you can manage all of your sales, payments, inventory, and customers in Square. This all-in-one store management solution isn’t something PayPal’s POS software provides.

Best for Automatic Recurring Payments: Square

Square lets you set up recurring payments for free, whereas PayPal charges a whopping $40 per month for this service. Square soundly beats PayPal in this matchup for most small businesses that use recurring payments for things like repeat services, class tuition, or club memberships.

You can set up and manage recurring payments quickly within your Square invoices dashboard.

Both Square and PayPal handle automatic recurring payments for things like subscriptions, monthly services, lesson fees, tuition, and so on. However, PayPal’s recurring payments feature is more autopilot than Square and can handle high-volume needs. If you need to manage recurring payments on a volume scale, PayPal’s $40 per month fee is worthwhile because PayPal’s recurring payments are pretty set-and-forget.

Outside of volume needs, we’re calling Square the winner in this matchup since its recurring payments feature is free and simpler to use than PayPal, which requires some setup. To initiate recurring payments using Square, customers save their credit card information to Square’s secure vault and approve automatic payments, which is done through an online invoice. Once they do this, each time you generate the repeat invoice, it triggers the automatic payment.

Square’s recurring payments tutorial in your free Square account shows you exactly how to set this up.

Square vs. PayPal: Recurring Payment Features & Payment Processing Fees

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Best Online Invoicing Features: Tie

Square and PayPal both offer online invoicing for free with very similar invoice creation, payment, and tracking features, so we’re calling this Square vs. PayPal matchup a draw. Both Square and PayPal let you create invoices and email them to your customers. Customers can then click the “Pay” button to pay online conveniently.

Both Square (left) and PayPal (right) let you create, send, and manage online invoices for free.

If customers choose to pay another way ― say via check or cash ― you can record those payments to show the invoices as “Paid,” and you’re not charged a fee by either service.

Square vs. PayPal: Online Invoicing Features & Payment Processing Fees

* Requires $30 virtual terminal feature.

One place where Square pulls ahead of PayPal for invoicing is in the case of phoned-in payments. If customers call in a credit card payment for an invoice, you must enter this into an online virtual terminal to process the payment. You get a free virtual terminal feature with Square, but PayPal charges $30 per month for their virtual terminal service. Start a free Square account.

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Other than that, Square and PayPal are in a dead heat for online invoicing. Next, we’ll see how they compare if you need to set up automatic recurring payments.

Next, we’ll look at how Square and PayPal compare when it comes to trying several types of sales outlets under one roof as a multichannel seller.

Square: Best for Multichannel Sales Management

Square is our recommended solution for multichannel sellers because in-store, mobile, and online payments and sales tracking is part of one fully integrated service. Moving into another type of sales ― like if a retailer wants to start selling online ― you can start doing it with Square. There are no new integrations, accounts, or add-on services needed.

Your Square Dashboard is home to all of your sales processes and data, including in-store, mobile, and online sales.

Square and PayPal both accept a full range of payment types, as we’ve covered in detail earlier. This makes both services decidedly multichannel-friendly since both let you combine an array of in-person, online, and mobile sales under one payment processing roof. But of the two, Square has the more streamlined, ready-to-grow with your system.

Square vs. PayPal: Built-in Multichannel Selling Features

*Advanced features available for low monthly fees

With PayPal, you must pay for important multichannel payment features, like a virtual terminal or recurring payments. Plus, you must integrate your PayPal account with other systems, like Lightspeed Retail POS ― starting at $99 per month ― to get advanced in-store selling tools, or an ecommerce platform to sell online.

All of this takes time and costs money with PayPal, but not with Square. If you want to start using a free feature, like the free online store, mobile POS, or subscription payments, you sign up for a free account. Alternatively, if you want to extend Square’s free features with paid add-ons like customer loyalty programs, gift cards, employee payroll, or more, you turn on and pay for what you need, nothing more. Best of all, everything works since all of the pieces are integrated into a simple, streamlined system.

The Bottom Line

Unless you’re strictly looking for online and ecommerce payment solutions, we recommend Square over PayPal. It delivers the most integrated multichannel payment solution at the best price. Plus, you enjoy many free perks with your free Square account, like robust POS software, business management tools, a free ecommerce website, and much more. Get a free Square account.

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