Stripe vs Square: Which Payment Processor Is Best?
Anna is a retail expert writer for Fit Small Business with over six years of evaluating dozens of software for small business. She holds a double degree in Accountancy and Financial Management and is currently pursuing further education in financial and payment technology.
Andrea is a staff writer at Fit Small Business, focusing on payments under the Retail section.
This article is part of a larger series on Payments.
Stripe is a developer-friendly payment processor best for online businesses wanting to add a customizable checkout to their websites or sales applications. Square is an out-of-the-box point-of-sale (POS) and payment processing platform that’s better suited for small businesses needing an all-in-one solution.
When comparing Stripe vs Square, the main difference is that Stripe requires a bit of technical knowledge and customization to start accepting payments. Square is more user-friendly, easier to set up, and offers a free POS system and website with Square payment processing automatically built in.
- Square: Best for individuals, brick-and-mortar businesses, and basic online sales
- Stripe: Best for tech-savvy startups and growing ecommerce businesses, B2B, and international sales
Both Square and Stripe made our list of the best merchant service providers. Square was our choice for best overall, with a score of 4.43 out of 5, while Stripe came out as the best online payment processor, with a score of 3.80 out of 5.
Square vs Stripe Quick Comparison
 |  | |
|---|---|---|
3.80 out of 5 | 4.43 out of 5 | |
Best for | Businesses focused on online sales and international markets | New or small businesses, brick-and-mortar shops, businesses on a budget |
Monthly fee | From $0 | From $0 |
Processing fee | 2.7% + 5 cents to 3.4% + 30 cents | 2.5% + 10 cents to 3.5% + 15 cents |
Invoice fee | 2.9% + 30 cents plus 0.4% with 25 free invoice processing per month or 0.5% per invoice, depending on plan | 3.3% + 30 cents |
Average payout | Instant payout for 1% (min 50 cents) Standard 2 business days | Instant funding for 1.5% Standard 1–2 day funding |
Ease of use | Good | Excellent |
Customer service | 24/7 chat and phone support, email, resource library | Monday–Friday phone support, 24/7 automated chat support, seller community, and resource library |
Overall Score:
4.43 / 5
Pros
- Easy to set up
- Flexible POS system that grows with your business
- Seamless omnichannel selling
- No chargeback fee
Cons
- Not suited for large businesses
- Incompatible with most high-risk businesses
- Account stability issues; reports of frozen funds
Square is Best For
- Accepting mobile payments: Square offers affordable and high-tech mobile card readers, and feature-rich payment apps. It is our top pick for the best mobile credit card processors.
- Processing multichannel payments: Square makes it easy to sell in both online and offline channels. It is among our leading multichannel POS systems.
- New and small businesses: While Square is an excellent choice for businesses of all sizes, it is a great option for new and small businesses. Our best overall free merchant account, Square requires no cost for signing up. With its ease of use, businesses can immediately start receiving payments.
Overall Score:
3.80 / 5
Pros
- Highly customizable, extremely flexible, secure platform
- Hundreds of integrations and powerful, well-documented APIs
- Low-cost ACH processing
- 135+ currencies
Cons
- Service fee for invoicing and recurring billing payments
- Requires some technical expertise
- Add-on fees for other services
- Initial payout takes up to 7 days
Stripe is Best For
- Creating a fully customizable and secure checkout: Stripe comes with customizable security features for checkout carts along with strict PCI (Payment Card Industry) compliance in its free account, earning a place on our list of the most recommended payment gateways.
- Fast-growing ecommerce businesses or service providers: Software developers can scale their business’ checkout process using reliable APIs and integrations.
- Local and international B2B businesses: Stripe accepts international transactions for over 135 currencies and processes extremely small and large payments. It handles recurring billing, invoicing, and domestic ACH transactions. Stripe tops our list of best international merchant account providers.
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Now through June 30, 2023, receive 20% off your first Square Terminal with the code FSBSquare! Visit Square to redeem.
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Stripe was originally designed for online-first businesses and offers more technically advanced options for online payment processing. Square, on the other hand, provides more payment processing and operational management features for mobile and brick-and-mortar businesses, including a built-in website builder for those who want to expand to online sales.
Stripe and Square both:
- Allow businesses of all sizes to accept online payments
- Provide user-friendly solutions and top-rated merchant services
- Offer—not the lowest, but competitive—transaction fees
- Do not offer the stability of a traditional merchant account
Is Square compatible with Stripe?
No, Stripe is not available as a payment option within the Square point-of-sale ecosystem. Merchants that use Square hardware are locked into Square’s built-in payment processor. Stripe’s in-person payment service (Stripe Terminal) only works with a selection of accredited hardware.
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Stripe vs Square Pricing & Contract
| | |
|---|---|---|
3.75 out of 5 | 4.63 out of 5 | |
Monthly POS subscription | $0–$10 | $0–$60 |
Monthly ecommerce subscription | Varies (third-party) | $0–$72 with add-on programs |
Mobile card reader pricing | $59 | $0–$49 |
Terminal and register pricing | $249 | $149–$799 (all-inclusive) |
Card-present transaction fees | 2.7% + 5 cents, 2.9% + 30 cents for touchless | 2.5% + 10 cents to 2.6% + 10 cents |
Card-not-present transaction fees (keyed-in) | 3.4% + 30 cents | 3.5% + 15 cents |
Ecommerce transaction fees | 2.9% + 30 cents | 2.9% + 30 cents |
ACH transaction fee | 0.8%, $5 cap | 1% processing fee, minimum $1 |
Invoice fee | 2.9% + 30 cents plus 0.4% with 25 free invoice processing per month or 0.5% per invoice, depending on plan | 3.3% + 30 cents |
Recurring billing | 2.9% + 30 cents plus 0.5% per month or 0.8% per invoice, depending on plan | 3.5% + 15 cents |
Chargeback fee | $15 | $0 (waived up to $250 per month) |
Looking at the processing fees alone, Stripe holds its own against Square—though they both scored well for not having monthly or cancellation fees. However, Stripe lost some minor points for its hardware pricing and major points for its chargeback fee of $15, which Square does not charge for.
Stripe may beat Square for ACH transactions and invoice payments, depending on the dollar amount. This makes Stripe better for B2B sales, and it makes our list of the best B2B payment solutions.
Learn more about Stripe’s pricing and fees.
Overall, for affordability, Square beats Stripe. That’s because, as a payment processor, you only get the full potential of Stripe when it is integrated with third-party applications. If you want to have an online store, you will need to sign up with a third-party platform. Unless you use a free ecommerce platform, you will incur additional fees for the platform subscription. Meanwhile, Square offers a free, fully functional POS system and online store, with charges for upgrades and additions.
Another advantage that Square has over Stripe is that it waives chargeback fees up to $250 per month. You might still be charged by your bank for any chargebacks, but unlike Stripe, Square does not charge any other fees.
Learn more about Square’s pricing and fees.
Square vs Stripe Estimated Fees
Compare Stripe vs Square fees. Enter an estimate of your monthly sales data in the calculator below:
Stripe vs Square Payment Types
| | |
|---|---|---|
3.75 out of 5 | 4.75 out of 5 | |
Payment types | ACH payments, card-on-file transactions, virtual terminal*, invoicing, recurring payments, payment links, hosted checkout, buy buttons, buy now pay later, Tap to Pay for iPhone | |
Mobile payment | Requires integration | ✓ |
International payments | 135+ currencies, 47 countries Additional 1% fee | US, Canada, Australia, Japan, the United Kingdom, Republic of Ireland, France, and Spain only |
Marketplaces (eBay, Amazon) | ✓ | ✕ |
Social selling | Third-party integration | ✓ |
Ecommerce integrations | 239 | 97 |
*Stripe advises against using the virtual terminal on the Stripe Dashboard. PCI compliance is the responsibility of the merchant when using the virtual terminal.
Stripe may seem to have lagged behind Square when it comes to payment types. However, our evaluation takes into account all payment types they accept, and Square is more flexible in this aspect. Stripe, on the other hand, is best for remote payments and our best overall when it comes to online payment processing. When looking solely at online payment capabilities, we find Stripe the winner.
Flexibility gives Stripe the edge when it comes to online payment processing. Square falls behind Stripe’s breadth of technology developed for accepting online payments—such as its optimized hosted payments features and dynamic, machine learning-based, customizable payment authorization.
Stripe can easily handle heavier online transaction volumes with powerful functionalities to secure payment processing, including a fine-tuned range of fraud detection tools and customizable risk management features. (Source: Stripe)
If you only have occasional online sales, PayPal is another popular online payment processor. Read our Stripe vs PayPal review for more information.
For in-person payments, Stripe relies mainly on POS integrations and development to start processing transactions. Although Stripe now has a growing range of in-person and mobile payment solutions, including card readers, you will still need to integrate the Stripe Terminal SDK into your platform.
However, if you already have a POS system like Lightspeed or Shopify, then Stripe beats Square because Square Payments only works with the Square POS.
Stripe In-person Hardware Solutions
BBPOS WisePOS E | Stripe Reader M2 |
|---|---|
 |  |
$249 (optional dock $49) | $59 (optional dock, $19) |
Mobile card reader with built-in POS application best for online businesses selling in person at farmers markets and trade shows | Mobile card reader best for accepting EMV and contactless payments both on-the-go and countertop setup |
Stripe also offers another reader, the BBPOS WisePad 3, for non-US merchants.
Square offers a simple, complete sales system for your brick-and-mortar business with a handful of third-party sales channels, including social selling for expanding into online sales. It’s easy to work with, so it’s best for those needing a basic ecommerce setup.
Square beats Stripe for in-person sales because it is designed for accepting in-person payments out of the box. It has a complete POS ecosystem and key integrations, so users can start running their businesses with Square in minutes.
If your business is more or less evenly divided between online and in-person sales, Square is a user-friendly, one-stop shop. Its POS system works for mobile or PC, and you can sync inventories between your online store and your brick-and-mortar store. The POS system works for both retail and restaurants. While Stripe requires you to build your POS using its tools or to integrate into a platform, Square comes ready to populate with your business-specific information.
However, when you use Square, you are locked into its payment processor. Square is best used by those who are quite happy to stay within its ecosystem.
Square In-person Hardware Solutions
Square Reader for Magstripe | Square Reader for Contactless and Chip |
|---|---|
 |  |
First free, additional $10 | $49 |
Mobile card reader best for simple swipe transactions | Mobile card reader best for EMV and contactless payments |
Square Stand for Contactless and Chip | Square Terminal | Square Register |
|---|---|---|
 |  |  |
$149 or $14 per month for 12 months | $299 or $27 per month for 12 months | $799 or $39 per month for 24 months |
Best for businesses looking for a simple countertop setup using an iPad and mobile card reader | Stand-alone mobile POS best for taking orders, accepting payments and issuing receipts around the store | Full touch-screen POS with customer-facing display best for encouraging customer engagement |
Did you know? Both Stripe and Square support Afterpay, allowing customers to purchase in three to four installments. Merchants are charged a processing fee of 6% + 30 cents per transaction. Stripe had already been offering Afterpay as an alternative payment option before Square acquired the service.
Stripe vs Square Features
| | |
|---|---|---|
3.19 out of 5 | 3.88 out of 5 | |
Chargeback/dispute fees | $15 (non-refundable) | $0 (waived up to $250) |
Chargeback protection | Optional, additional fee of 0.4% per transaction | Included |
Advanced risk monitoring | 0–7 cents per transaction | 0–6 cents per transaction |
Dispute management | ✓ | ✓ |
PCI compliance | ✓ | ✓ |
Payment security | Level 1 PCI compliance Payment data encryption Built-in machine-learning fraud detection Customized payment risk evaluation 3D secure authentication Secure data migration Online identity verification | Level 1 PCI compliance Payment data encryption Proprietary tokenization Systematic security updates |
Offline payments | ✓ | ✓ |
API | ✓ | ✓ |
Developer tools | CLI, Visual Studio Code, live event monitoring, advanced SDKs | Sandbox, API explorer, live event monitoring, backend SDKs, secure payment SDKs |
Developer support | Documentation, YouTube tutorials, newsletter, live chat with developers, 24/7 support | Documentation, forums, Slack, contact support via online form |
Deposit speed |
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Customer support |
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Customization is key for Stripe’s advanced security features. Aside from built-in PCI compliance, chargeback protection, and dispute management, it has developed payment, hardware, and account protection tools that go beyond the standard. For instance, you can customize your acceptable payment risk by setting your own risk level scores. It also offers secure data migration, so you can safely transfer transaction details and customer payment information to and from different payment processors.
If you sell globally, you can use a variety of online identity verification options because Stripe can recognize IDs from over 33 countries. You can also manage all your registered card readers from a central fleet management dashboard.
Stripe is especially suited for developers, making it a good choice for tech-savvy businesses. While Square also offers APIs and SDKs to create customized in-app and online checkouts, Stripe’s range of apps, tools, documentation, and support is clearly more advanced.
With over 700 partner apps, Stripe is a clear leader in payment processing software for integrations. You can search for apps by name or use the menus to narrow them down by industry, need, and location. You’ll find popular apps like Salesforce, Harvest, Shopify, QuickBooks, and Eventzilla.
If you need to create your own app, Stripe offers API support with documentation, video tutorials, and live chat with developers through Freenode IRC. You can build, test, and manage your integration from your terminal through its CLI. Its Visual Studio Code extension lets you generate sample code, view API request logs, forward events to your application, and use Stripe within your editor.
If you are a small business or do not handle large-ticket sales, Square would be the better choice. It gives you standard security tools for handling online and in-person transactions and an option for advanced risk monitoring features that starts at 6 cents per transaction. This provides you with additional protection such as card, email, and IP address blocking, 3D secure authentication, and card processing overrides.
Square also waives chargeback and dispute fees and offers chargeback protection. However, chargeback protection for transactions is capped at $250 per month, which is why Square’s security is more ideal for small businesses.
Square offers an easy-to-use dispute management dashboard for tracking and responding to claims conveniently within the platform. It’s designed to efficiently handle online and in-person small ticket transactions.
If you need easy-to-use, industry-specific integrations, then Square is your best choice. Square is no slouch when it comes to integrations, working with 150 apps in its Marketplace. It’s easy to find apps by searching the categories, or if you know the name, type it in the search bar. Square also creates collections of recommended apps for specific purposes that you can browse. You’ll find integrations with popular software like QuickBooks, BigCommerce, Zoho, and Mailchimp. Some have free plans or free trials.
Square also has a strong API program, with a sandbox for testing, documentation, and SDKs. There’s a forum for reaching out to other developers or contacting support via Slack or an online form. While Square also makes it easy to connect to other software, it’s hard to compete with.
Stripe’s 700+ partner apps and famous developer-friendly platform.
Stripe vs Square Expert Score
We scored this category based on our own experience of ease of use and how affordable and transparent the pricing is. We also looked at the number and ease of integrations, as well as the input of real-world users as recorded in third-party user review sites like Capterra and G2.
Methodology—How We Evaluated Stripe vs Square
We test each merchant service provider ourselves to ensure an extensive review of the products. We then compare pricing methods and identify providers that offer zero monthly fees, pay-as-you-go terms, and low transaction rates. Finally, we evaluate each according to various payment processing features, scalability, and ease of use.
The result is our list of the best merchant services providers. However, we adjust the criteria for specific use cases, such as for different business types and merchant categories. This is why every provider has multiple scores across our site, depending on the use case you are looking for. For this in-depth analysis, we looked closely at how Stripe and Square performed.
Click through the tabs below for our overall merchant account evaluation criteria:
25%
Pricing
30%
Payment Types
25%
Account Features
20%
Expert Score
25% of Overall Score
We awarded points to merchant account providers that don’t require contracts and offer month-to-month or pay-as-you-go billing. Additionally, we prioritized providers that don’t charge hefty monthly fees, cancellation fees, or chargeback fees and only included providers that offer competitive and predictable flat-rate or interchange-plus pricing. We also awarded points to processors that offer volume discounts, and extra points if those discounts are transparent or automated.
For pricing and contract, Square scored higher with 4.63 out of 5 compared to Stripe’s 3.75 out of 5. Although both have no monthly fees and contracts, Square has an edge over Stripe for its hardware availability and zero chargeback fees.
30% of Overall Score
The best merchant accounts can accept various payment types, including POS and card-present transactions, mobile payments, contactless payments, ecommerce transactions, and ACH and echeck payments, and offer free virtual terminal and invoicing solutions for phone orders, recurring billing, and card-on-file payments.
Again, Square earned a higher score (4.75 out of 5) than Stripe’s 3.75 out of 5. There are only two things that gave Square the edge—its mobile POS and virtual terminal. Although Stripe can accept basic manual payments from its dashboard, using it has an add-on rate.
25% of Overall Score
We prioritized merchant accounts with free 24/7 phone and email support. Small businesses also need fast deposits, so payment processors offering free same-day or next-day funding earned bonus points. Finally, we considered whether each system has affordable and flexible hardware options and offers any business management tools, like dispute and chargeback management, reporting, or customer management.
Square again took the lead with 3.88 out of 5, while Stripe earned 3.19 out of 5. The POS system, business management tools, and available hardware gave Square the edge over Stripe.
20% of Overall Score
We judged each system based on its overall pricing and advertising transparency, ease of use―including account stability―popularity, and reputation among business owners and sites like the Better Business Bureau (BBB). Finally, we considered how well each system works with other popular small business software, such as accounting, POS, and ecommerce solutions.
Here is where Stripe did slightly better with 4.69 out of 5 than Square’s 4.38 out of 5. Stripe wins hands down when it comes to flexibility and customizations.
*Percentages of overall score
Stripe vs Square Frequently Asked Questions (FAQs)
Square is an all-in-one solution for small businesses that need a payment processor, a POS, inventory, and operations management tools. It is easy to use and requires very little technical or coding skills. On the other hand, Stripe offers a lot of flexibility and customizability. It has over 700 integrations, exceptional data security and global payment capabilities.
Stripe’s biggest strengths are its flexibility and customization. It has a robust API, supports payments in over 135 currencies, over 700 integrations, and high-level security infrastructure.
Square is best at providing an all-in-one solution–a range of payment processing options, a POS system, and various integrated tools.
Bottom Line
When debating between Square vs Stripe for your business, it comes down to one question: Are you a tech-savvy startup or a business owner looking for a user-friendly solution? For tech-savvy startups wanting lots of flexibility, Stripe is best for you. Meanwhile, Square offers a plug-and-play solution for accepting payments anywhere, along with a suite of free business management tools that is a better fit for most small businesses.
