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Our Verdict
Our Verdict
If you’ve ever bought something on the internet, you probably have come across PayPal at some point during the online shopping process. As a customer, it’s an easy method to make payments. But when you’re evaluating PayPal from the perspective of a business owner, there are many more factors to consider, including how the payment processing platform stacks up with competitors. Read our comprehensive PayPal review to decide if it’s the right option for your company.
Pros
- Accepts multiple forms of payment, including Venmo, PayPal and cryptocurrency
- Recognizable name customers trust
- Multiple e-commerce features
Cons
- Lacking POS features
- Extra fees for international credit cards
- $20 chargeback fee
- Additional cost for hardware
Via partner site
3.5
Our ratings take into account a product's cost, features, ease of use, customer service and other category-specific attributes. All ratings are determined solely by our editorial team.
Transaction Fees
Between 1.90% and 3.50%
Point-of-sale (POS) Card Readers
First reader is $29, then $79 for each additional device
Customer Service
Excellent
Table of Contents
- PayPal At a Glance
- Other Benefits
- Fine Print
- How PayPal Stacks Up
- Is PayPal Right for You or Your Business?
- Frequently Asked Questions (FAQs)
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PayPal At a Glance
PayPal is rated one of our top 10 point-of-sale (POS) systems for 2024. It’s also one of our top 10 credit card processing platforms (although it ranked higher for POS systems). PayPal enables small business owners to process payments through a platform customers trust.
PayPal offers many services for business owners, and the extent of their services can be a little confusing if you’re just getting started with payment processing. In short, PayPal lets you accept payments on a website—an e-commerce store, for example. You can also use PayPal to accept in-person payments, such as for a retail store or a stand in a holiday fair.
On PayPal, merchants can accept all major credit cards, Venmo, pay later options and cryptocurrencies. The fees vary based on the transactions. Here’s how the fees break down:
- Digital payments, such as PayPal, Venmo and cryptocurrency: 3.49% plus 49 cents per transaction
- In-person payments with a PayPal QR code: 1.90% plus 10 cents per transaction above $10; 2.4% plus 5 cents per transaction $10 and below
- Online credit and debit card payments: 2.59% plus 49 cents per transaction
- In-person card payments: 2.29% plus 9 cents per transaction
To accept in-person transactions, you’ll need, at the very least, a card reader. PayPal offers many options for hardware through the company Zettle, which it owns. The first card reader you purchase will cost $29 and after that, the cost increases to $79 per reader.
Other Benefits
PayPal offers a Seller’s Protection Program for eligible merchants. If a buyer disputes a transaction, this will ensure you are protected as a merchant.
Fine Print
PayPal has a few fees that may not be initially clear. In addition to a $20 chargeback fee, PayPal does not refund the transaction fee when customers return their purchases. If your company is frequently processing returns, these fees can add up. Square, on the other hand, does not have a chargeback fee and will refund your transaction fee when a customer makes a return.
How PayPal Stacks Up
| PayPal | Square | Stax by Fattmerchant | |
|---|---|---|---|
Keyed Transactions | 3.50% plus fixed fee of 15 cents | 3.50% plus 15 cents per transaction | 15 cents per keyed transaction (with a monthly subscription) |
Swipe/Chip Transaction Fee | 2.29% plus 9 cents per transaction (via Zettle) | 2.6% plus 10 cents per transaction | 8 cents per swipe transaction (with a monthly subscription) |
Invoicing | Yes | Yes | Yes |
Software Integration | WooCommerce, Magento, Wix, BigCommerce, GoDaddy, and more | Acuity Scheduling, GoDaddy, Wix, WooCommerce, JotForm, and more | QuickBooks Online plus a developer API |
Customer Service | Live chat, phone support, knowledge base, no blog | Live chat, phone support, knowledge base and blog | Live chat, phone support, knowledge base and blog |
International Fees | Additional 1.50% for all commercial transactions plus fixed fee based on currency | No additional fees for international credit cards | No additional fees for international credit cards |
Cost for Card Reader | First reader costs $29 ($79 for each additional device) | First reader is free ($10 for each additional device) | Varies based on the subscription |
Learn More | |||
Read Reviews | — | Read Square Review | Read Stax by Fattmerchant Review |
One of the big differences between PayPal, Square and Stax by Fattmerchant is the transaction fees. PayPal’s fees are similar to Square, while Stax’s fees are much lower because it uses a subscription model where merchants pay a minimum of $99 per month. If your business is generating less than $5,000 per month, it makes more sense to go with a company like PayPal or Square that does not charge a monthly subscription fee.
Keep in mind that PayPal charges an extra fee of 1.50% to process international credit cards while Square and Stax do not. Square’s card readers are also significantly cheaper, with the first one free and each additional one costing $10. All three companies offer more extensive hardware options for in-person payment processing.
Is PayPal Right for You or Your Business?
The diverse range of features, as well as the name recognition, makes PayPal a good option for merchants to consider. Square is more geared towards in-person transactions and may be a better fit if this is the majority of your transactions. Meanwhile, PayPal is the most widely recognized processing platform for e-commerce, and the name recognition may make customers more likely to follow through with a purchase.
Frequently Asked Questions (FAQs)
What is POS?
POS stands for point of sale, which refers to the moment a customer decides to make a purchase. This includes a “Buy Now” button, a cash register at a retail store or a card reader at a restaurant. POS includes both software, such as apps, and hardware, such as card readers.
How do I choose the right POS system for my business?
The best POS system for your business depends on a variety of factors, including the type of business you have, your budget and the features you need. For many situations, it makes sense to invest in the best system you can afford and, preferably, the system can grow with your business.
How much does PayPal cost?
The cost depends on your business needs and is not a one-size-fits-all answer. Regardless of whether your customers pay through an in-person card reader, an invoice or an online shopping cart, you will have to pay a transaction fee for each charge you make. These fees vary depending on the method of payment—for example, keyed transactions cost 3.50% plus a fixed fee of 15 cents while swipe/chip transactions cost 2.29% plus 9 cents per transaction (via Zettle).
Is PayPal Secure?
Yes, PayPal is as secure as it gets for a service of this kind. The company offers an extensive set of protection policies for both buyers and sellers, and every transaction is monitored by its system for suspicious activity. Other features include top-level encryption and multifactor authentication.
What kind of customer service does PayPal provide?
PayPal offers phone support, live chat and a knowledge base. Keep in mind that you’ll have to be logged in to a PayPal account to be able to utilize this support.
Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circ*mstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.
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