When selecting a payment processing platform, small businesses often face the dilemma: Square vs PayPal, which is the better choice? Both platforms offer robust solutions for accepting payments online and in person, but your decision should align with your specific business needs, transaction volume, and hardware preferences.
In this comprehensive guide, we’ll delve into the features, fees, and capabilities of Square and PayPal, highlighting what makes each platform suitable for small businesses aiming to streamline payment processing, enhance online sales, and manage in-person transactions effectively.
Understanding Square and PayPal Payment Processing
Square: A Comprehensive Payment Solution
Square is renowned for its user-friendly hardware and integrated point-of-sale (POS) system, making it ideal for brick-and-mortar businesses. With devices like the Square Reader, Square Register, and Square Terminal, businesses can accept various payment methods, including credit cards, debit cards, and contactless payments such as Apple Pay and Google Pay.
Beyond payment acceptance, Square offers a suite of tools for inventory management, employee scheduling, and customer relationship management, providing a holistic solution for in-person transactions.
Read More: Square vs. PayPal: Which Is Right for Your Business?
PayPal: A Global E-commerce Powerhouse
PayPal, with its extensive global reach, excels in online transactions. It offers a secure payment gateway, enabling businesses to accept payments via credit cards, debit cards, and PayPal accounts. Features like PayPal Payments Pro provide advanced checkout customization and a virtual terminal for manual payments, catering to businesses with diverse online payment needs.
Additionally, PayPal supports recurring billing and subscription services, making it a preferred choice for businesses with subscription-based models.
Transaction and Monthly Fees Comparison
Understanding the fee structures of both platforms is crucial for small businesses:
- Square: Charges a flat rate of 2.6% + 10¢ for in-person payments. Online transactions incur a slightly higher fee. Square offers free access to its POS app and does not charge monthly fees for the basic plan, making it attractive for startups and low-volume sellers.
- PayPal: Typically charges around 2.9% + 30¢ for online transactions, with slightly lower fees for in-person payments. PayPal Payments Pro carries a monthly fee (approximately $30) but provides greater flexibility for larger businesses.
Both platforms may impose additional fees, such as chargeback fees and cross-border fees for international transactions.
Check Out: Square vs. PayPal
Hardware Options and In-Person Payments
For businesses with physical storefronts, hardware choices can influence the decision:
- Square: Offers dedicated devices like the Square Register, Square Terminal, and Square Stand, designed for easy setup and fast credit card processing. Its mobile card reader supports contactless payments and integrates seamlessly with Square’s ecosystem.
- PayPal: Provides card readers and POS hardware, but its focus is more on e-commerce. PayPal Zettle is its POS system, competing with Square’s offerings but is still gaining traction in some markets.
Accepting Multiple Payment Methods
Modern consumers expect flexibility:
- Square: Enables businesses to accept credit cards easily, both online and offline, with features to manage recurring payments and tailored payment options.
- PayPal: Offers strong support for online payments through its PayPal checkout and a broad range of PayPal payment methods, including PayPal Credit.
Choosing between Square and PayPal often depends on customer preferences; online shoppers may favor PayPal, while local customers might lean towards Square’s contactless payments in-store.
Explore: Square VS PayPal: Which Is Best For Small Business?
Streamline your Business Payments
Whether you’re selling online, in-store, or both. You need a website that integrates seamlessly with Square, PayPal, and more.
Online Sales and E-commerce Integration
For businesses venturing into online sales:
- Square: Supports online payments with an easy-to-use online store builder and integrations with major e-commerce platforms. Its pricing is competitive, and the option to unify offline and online sales through a single dashboard is appealing.
- PayPal: Remains a dominant force in e-commerce. Its payment gateway is widely supported by platforms like Shopify, WooCommerce, and BigCommerce. The convenience of paying with a PayPal account can boost conversion rates for online businesses.
Customer Support and User Experience
Efficient customer support is vital:
- Square: Offers 24/7 phone support and extensive online resources. Its intuitive interface is designed for small business owners who may not be tech-savvy.
- PayPal: Provides phone and email support, but some users report mixed experiences. However, PayPal’s extensive global user base means many issues have quick solutions online.
Recurring Billing and Advanced Features
For subscription-based businesses:
- Square: Supports recurring payments through its subscription tools, making it easy to bill customers automatically.
- PayPal Payments Pro: Provides robust subscription billing and advanced merchant tools, including a virtual terminal for manual payments.
Final Thoughts
The answer to “best for small businesses, Square or PayPal?” depends largely on your business model:
- Square: Ideal for businesses needing seamless in-person payments, an integrated POS system, and simple pricing.
- PayPal: Suited for businesses focusing on online transactions, global reach, and diverse PayPal payment methods.
Many businesses find value in using both platforms, leveraging Square for physical retail and PayPal for online sales.
