Square Vs. PayPal: Which One Is Best? (2024)

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Leeron HooryContributor

Leeron is a New York-based writer with experience covering technology and politics. Her work has appeared in publications such as Quartz, the Village Voice, Gothamist, and Slate.

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Leeron HooryContributor

Leeron is a New York-based writer with experience covering technology and politics. Her work has appeared in publications such as Quartz, the Village Voice, Gothamist, and Slate.

See Full Bio

Written By

Leeron Hoory

Leeron HooryContributor

Leeron is a New York-based writer with experience covering technology and politics. Her work has appeared in publications such as Quartz, the Village Voice, Gothamist, and Slate.

See Full Bio

Leeron HooryContributor

Leeron is a New York-based writer with experience covering technology and politics. Her work has appeared in publications such as Quartz, the Village Voice, Gothamist, and Slate.

See Full Bio

Contributor

Rob WattsManaging Editor, SMB

With over a decade of editorial experience, Rob Watts breaks down complex topics for small businesses that want to grow and succeed. His work has been featured in outlets such as Keypoint Intelligence, FitSmallBusiness and PCMag.

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Rob WattsManaging Editor, SMB

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Written By

Rob Watts

Rob WattsManaging Editor, SMB

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Rob WattsManaging Editor, SMB

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Managing Editor, SMB

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Updated: Jun 4, 2024, 5:13am

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

Square vs. PayPal: At a Glance

Overall, Square is best suited for in-person and mobile transactions while PayPal is a better fit for e-commerce businesses. Many people know Square as the small card reader extensions for a mobile device. Meanwhile, it’s hard to make an online purchase without coming across PayPal.

Square

4.8

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.

Pricing structure

Flat rate

Monthly fee

Processing fees

From 2.6% + 10 cents

Learn More

On Square's Website

Flat rate

From 2.6% + 10 cents

Pros & Cons

Multiple POS hardware options
Best for in-store payments
No chargeback fee

Fewer options for international payment processing
No 24/7 phone support

PayPal

3.2

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.

Pricing structure

Flat rate

Monthly fee

Processing fees

From 2.29% + 9 cents

Learn More

Read Forbes' Review

Flat rate

From 2.29% + 9 cents

Pros & Cons

Accepts multiple forms of payment, including Venmo, PayPal and cryptocurrency
Recognizable name customers trust
Multiple e-commerce features

Lacking POS features
Extra fees for international credit cards
$20 chargeback fee

Square vs. PayPal: Credit Card Processing Comparison

	Square	PayPal
Swipe/Chip Transaction Fees	From 2.6% plus 10 cents per transaction	From 2.29% plus 9 cents per transaction
Keyed Transactions	From 3.50% plus 15 cents per transaction	From 3.49% plus fee of 9 cents
Customer Payment Options	Merchants can accept all major credit cards, Cash App, and prepayment options for appointments	Merchants can accept all major credit cards, Venmo, pay-later options and cryptocurrencies
Free Quote Online	No	No
Chargeback Fees	No fee	$20
Refund Fees	No fee (when a merchant issues a refund, the customer receives their full payment and the merchant receives the transaction fee in return)	Customers receive the full cost of service, but the merchant does not receive the transaction fee in return
Software Integration	Acuity Scheduling, GoDaddy Websites and Marketing, Wix, WooCommerce, Jotform (and more)	WooCommerce, Magento, Wix, BigCommerce, GoDaddy
International Fees	No additional fees for international credit cards	Additional 1.50% for all commercial transactions plus fixed fee based on currency
Invoicing	Yes	Yes

Square’s fee for swipe/chip transactions is 2.6% plus 10 cents per transaction while PayPal starts at 2.29% plus 9 cents and goes up depending on your package. Besides the difference in transaction fees, there are other variations in fees to be aware of. Keep in mind that PayPal charges a $20 fee for chargebacks, while Square does not. Additionally, PayPal charges an extra 1.50% for international transactions while Square does not. Finally, PayPal does not refund merchants the transaction fee when a customer issues a return, while Square does return the transaction fee to the merchant.

Regardless, PayPal is the leading company for e-commerce. The company offers more ways for customers to pay, including cryptocurrencies. Plus, customers recognize the PayPal name, which makes it more likely they will follow through with payment online.

Square Vs. PayPal: POS Comparison

	Square	PayPal
Transaction Fees	No monthly fees; 2.6% plus 10 cents per transaction	No monthly fees. Card present transactions cost 2.29% plus 9 cents per transaction. Manual card entry transactions cost 3.49% plus 9 cents per transaction.
Customer Service	Live chat, knowledge base and blog, no 24/7 phone support	Live chat and knowledge base, no blog (24/7 phone support not specified)
Tip Management	Yes	Not specified
Software Integrations	SKU IQ, Linktree, Acuity Scheduling, GoDaddy Websites and Marketing, Wix, WooCommerce, JotForm (and more)	Quickbooks, SalesVu, WooCommerce, Big Commerce (and more)
Cost for Card Readers	First reader is free and each additional card reader is $10	First card reader costs $29 and $79 for each additional device
Cost for Terminal	Starts at $299	Starts at $249
Built-In Payment Processing	Yes	Yes
Selection of Multiple Hardware	Yes	Yes (through Zettle, which it owns)
Learn More	On Square’s Website	Via partner site
Read Reviews	Read our Square Review	Read our PayPal Review

In general, Square is a better option to accept in-person payments while PayPal is a better option for e-commerce and online payments. Both Square and PayPal were rated one of our top ten POS systems in 2024, but Square received a significantly higher score.

One of the biggest differences between these two companies’ POS systems is that Square offers more business tools, such as employee management, while PayPal’s features are limited to payment. Square has a feature to schedule appointments within the app so that you can integrate your calendar with your payment platform. Customers can book online and you can send them reminders through the app. The software also enables you to keep client credit cards on file and schedule prepayment before visits.

PayPal’s transaction fees are listed as lower for card-present transactions—2.29% plus 9 cents compared with $2.6% plus 10 cents—however, PayPal does have more additional fees that are less apparent and harder to account for (such as a $20 chargeback fee and additional fees to process international credit cards).

The first card reader Square gives you is free. After that, each additional card reader is $10. With PayPal, card readers cost $29 and $79 for each additional device. Square offers a tip management tool and both companies offer multiple options for software integration.

Bottom Line

Square is a better option for small businesses that focus on in-person transactions. If you plan to receive payments primarily online, PayPal will more likely suit your needs. Square offers business management tools as part of its POS system, while PayPal’s is simpler. Additionally, PayPal issues more fees than Square, such as a $20 chargeback fee and higher fees for international credit cards. However, there are advantages to using PayPal for an e-commerce store or for online payments. PayPal is able to accept a wider range of payment options (including PayPal) and the additional options may help boost sales.

Top Square and PayPal Alternatives

There are many excellent payment gateways on the market. The best fit for your business needs to strike a balance of affordability and scalability. Here are some of the best credit card processing companies that you may also want to consider.

Company	Forbes Advisor Rating	Pricing structure	Monthly fee	Processing fees	Learn More CTA text	Learn more CTA below text
Payment Depot	4.7	Subscription	$59	7 cents to 15 cents plus interchange	Learn More	Via Payment Depot's Website
Stripe	4.4	Flat rate	$0	From 2.7% plus 5 cents	Learn More	Read Forbes' Review
Helcim	4.3	Flat rate	$0	From 0.15% plus 6 cents	Learn More	Via Helcim's Website

Frequently Asked Questions (FAQs)

What are Square and PayPal?

Square and PayPal both offer a variety of services but, at their core, they are credit card processing platforms. Their primary function is to securely verify customer funds and transfer payment to a merchant account, but they also offer additional features, such as platforms for online stores and physical POS hardware.

Who should use Square or PayPal?

Square is a great choice for small businesses that want to accept in-person payments. It offers free hardware that lets you make sales simply using your cell phone, with no monthly subscription fee. PayPal is excellent if you primarily operate online and need to be able to add payment options to an existing website or want to set up recurring donations for a nonprofit organization.

Which is cheaper; Square or PayPal?

PayPal has lower rates, starting at 2.29% plus 9 cents per transaction. Square’s fees are slightly higher at 2.6% plus 10 cents. But processing fees aren’t the only thing you need to consider; be sure to also factor in any hardware or software integrations you may require to meet the full scope of your needs.

Is Square a good credit card processing company?

Square was named one of the top 10 credit card processing companies in 2024. It is especially popular with small businesses because of its ease of use, free mobile card reader and lack of monthly fees.

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