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Square and PayPal are two of the most popular point-of-sale systems (no, POS doesn’t stand for “Piece of Shit,” it’s “Point of Sale”!) favored by small, service-based, and medium-sized businesses. Both platforms offer quick, secure, and user-friendly ways to process payments online in various scenarios. Whether you’re planning to launch an eCommerce store or simply want to sell products on Facebook, choosing a dependable payment processor is essential. There are several factors to consider when selecting a payment solution for your business. To help you decide, here’s a comprehensive comparison that highlights their features and differences.
Square vs. PayPal: An Overview
PayPal is a widely used payment gateway facilitating personal transfers, online shopping, and charitable donations. It enables users, merchants, and organizations to send and receive money via their accounts. Square is also an excellent payment platform suitable for point-of-sale transactions and online payments. Both services enable selling, purchasing, and transferring funds across various channels while syncing your banking and cash flow data seamlessly.
Some common features include:
- Comprehensive POS solutions
- Online sales capabilities
- Social media selling tools
- Shareable payment links via email and SMS
- Invoice creation and buy buttons
- QR code payment options
- Refunds and discounts processing
- Mobile apps for Android and iOS devices
- Cash drawer integrations
- Virtual terminal for phone payments
- Subscription and invoicing management
- Employee management features
- Automated reminders for payments
- Tools tailored for small businesses
- API access for custom integrations
While these similarities make both platforms appealing, there are notable differences. Square tends to excel in point-of-sale solutions, whereas PayPal is often the preferred choice for online and cross-border payments. Here’s a closer look at their main features.
Key Features of Square vs. PayPal
Below is a side-by-side comparison of their key offerings.
1. POS System
Choosing the right POS app involves considering your business size and needs.
If your operation is primarily online, you’ll require different features than a brick-and-mortar shop. Do you need tools for managing inventories or printing sales receipts? Here’s how Square and PayPal stack up.
Square:
Square POS offers remarkable flexibility in how customers can make payments, making it a versatile choice across different industry sectors. It’s suitable for restaurants, retail stores, appointment-based services, and even entertainment venues like cinemas. Beyond basic payment processing, Square’s POS supports adding multiple devices, managing different locations, and combining team members with ease. It also allows remote payments via invoices and over the phone.
Connect your mobile device directly to your computer effortlessly.
There are numerous add-on options available, such as Square Payroll, Square Marketing, Square Loyalty, along with a free invoicing application. The system also includes an integrated suite of features encompassing payments, item management, inventory tracking, analytics, ecommerce, and customer relationship management (CRM).
Square offers a built-in website builder with an intuitive drag-and-drop interface, allowing you to create a professional business website that syncs automatically with your in-person sales data. This helps simplify the process of managing online orders, inventory, and sales analytics.
For restaurants, this platform is especially useful to display menus online, facilitate contactless QR code ordering for dine-in, and support takeout options. Additionally, gift card integration with the POS system and Square dashboard makes redemption easy. The system also provides robust protection against disputes, fraud monitoring, payment encryption, and PCI compliance, ensuring your transactions remain secure.
Key features of Square’s POS include accepting various payment types, including contactless options, supporting online orders via platforms like Instagram or phone, managing pickup and delivery, and offering a free website builder. The system also includes built-in appointment scheduling, proprietary hardware options, and a comprehensive suite of tools for smooth payment processing, staffing, customer bookings, inventory, and sales management.
Moreover, Square’s system is straightforward, offers an offline mode, and requires no long-term commitments, hidden fees, or recurring charges. For larger online enterprises processing over $250,000 annually, discounted subscription plans are available, with customizable pricing options to reduce costs further.
Get started with Square.
PayPal:
Similar to Square, PayPal provides a POS system called Zettle. Funds from your Zettle card transactions are automatically transferred to your PayPal merchant account. You can also integrate this with PayPal’s ecommerce payment features to grow your business.
PayPal emphasizes giving users “total control” over their sales through a comprehensive suite of analytics. You can customize how you view, analyze, and share sales data, making it easier to interpret your business performance. The system also manages inventory in real-time, letting you monitor stock levels accurately. You can set production costs and sale prices directly on the platform, simplifying inventory control and pricing strategies.
You have options to import products in bulk from spreadsheets, organize items into groups, automatically update stock levels, and add images and descriptions. Barcode scanning and product grouping features further streamline inventory management. The system enables you to build detailed customer profiles, including payment preferences, email addresses, purchase history, and loyalty program status.
Additional capabilities include tracking all sales and refunds in one centralized location, and identifying your best-selling products to ensure they remain in stock, helping you optimize your inventory and sales strategies effectively.
- Manage staff efficiently with options to organize sales data by specific dates or employees.
- Incorporate features that make the checkout process quicker and more seamless.
Overall, the POS system is designed to be simple, fast, and easy to learn with minimal training required. There are no long-term contracts or monthly subscription fees, but you will be charged a standard fee for each PayPal Zettle transaction.
PayPal also provides customized pricing tailored to specific businesses.
A quick comparison of fees between PayPal and Square POS systems shows that PayPal charges a $29 fee for the initial card reader, with each extra reader costing $79. In contrast, Square’s first card reader is free, and additional ones are priced at $10 each. Transaction fees for PayPal are 2.29% plus $0.09 per transaction, with no monthly fees, whereas Square charges 2.6% plus $0.10 per transaction, also without monthly charges. The starting cost for terminals is $249 for PayPal and $299 for Square.
The final choice leans towards Square. Although both platforms offer functional POS solutions, Square has an advantage due to its free appointment scheduling software and offline capabilities. It also provides specialized tools for restaurant businesses and supports management across multiple locations.
2. Hardware Options
Square Hardware:
Square’s hardware lineup features an intuitive interface, making it quick and reliable to process sales, with minimal learning needed. They offer a range of devices suitable for various business needs, including:
- Square Register – An all-in-one POS system with dual screens, integrated software, and built-in payment processing.
- Complete POS terminal – A comprehensive credit card machine for payments and receipts in one device.
- Contactless and chip stand – Accepts contactless payments like Apple Pay and chip cards anywhere.
- Square magstripe reader – Swipes credit cards using your smartphone or tablet.
- Square Stand – Converts an iPad into a full POS terminal capable of accepting payments.
These hardware tools are designed to enhance customer experience and ensure smooth operations regardless of location. While they do not require additional devices to function, some accessories need a lightning connector for compatibility. The costs vary, with the Square Register being the most expensive at $799 for 24 months of service, and the contactless chip stand costing $169 for 12 months. The Register also includes a two-year warranty, whereas other tools come with a year-long limited warranty.
PayPal Hardware:
PayPal offers hardware options compatible with its POS system, though with fewer choices than Square. The available devices include:
- Cash Registers – Stylish and professional for an efficient checkout process.
- Credit Card Readers – Portable, battery-powered devices suitable for all-day use.
- Various POS accessories – Such as receipt printers and barcode scanners.
These devices can be integrated with your website, helping deliver quick, secure checkout experiences for customers.
You can connect PayPal hardware with smartphones or tablets via Bluetooth, which offers versatile options for processing payments. PayPal also provides free customer support through email and phone to help resolve business issues quickly.
Besides offering free overnight shipping across the U.S., PayPal ensures fast hardware replacements with minimal wait times. Their pre-assembled store kits include top functionalities tailored for small, medium, or large businesses, and they support various accessories such as POS printers, barcode scanners, and receipt paper.
PayPal’s interface is designed to be intuitive, making it easy for users regardless of their educational background to get started. This simplicity enhances its overall appeal among diverse user groups.
Final verdict: Square.
3. Online Payments
Both PayPal and Square are prominent names in the online payment industry. Let’s explore which service might be best suited to your business needs.
Square:
Square enables businesses of all sizes to accept card payments without additional charges. It uniquely offers a free website creation tool that seamlessly integrates with its payment system. Square also provides various hardware options for accepting payments, all without transaction fees.
You can send digital invoices or receipts directly to customers via text or email, and even facilitate instant payments upon appointment booking. Additionally, Square allows you to generate shareable links, buy buttons, or QR codes for online selling, enhancing your sales capabilities.
The platform supports fund transfers to linked bank accounts starting the next business day at no cost, or instantly for a fee. Transaction fees include 2.6% plus 10 cents for in-person card payments, 2.9% plus 30 cents for online sales, and 3.5% plus 15 cents if you manually enter card details. It’s advisable to evaluate fees with Square’s calculator before processing transactions to help with budgeting. Square also offers free dispute management services for chargebacks and has built-in security features to protect your transactions.
PayPal:
PayPal is a household name in online payments, widely recognized for its ease of use when sending and receiving money. You can make transactions without sharing sensitive financial information, as linking a bank account suffices. Payments are conducted using email addresses or mobile numbers linked to PayPal accounts.
In addition to standard PayPal accounts, the platform offers PayPal Payments Pro—a premium service that enables businesses to accept credit cards, PayPal Credit, and other PayPal transactions. It allows embedding customizable shopping carts, processing phone payments, and managing online invoices across 26 currencies in over 200 markets. Funds received are usually available in your PayPal account within minutes, which you can transfer to your bank or use directly for business expenses. Managing transactions is straightforward using PayPal’s user-friendly dashboard.
There are no fees for domestic purchases, but the Payments Pro plan costs $30 per month. International transactions incur an extra fee of 3% of the transaction amount, with higher rates for currencies like USD, AUD, BRL, and NZD, which add approximately 4% above the standard exchange rate.
A dispute fee applies if a buyer submits a dispute claim. For example, you’ll need to pay 12 AUD for transactions in Australian dollars or 7 EUR for Euro transactions, among others. You will also incur consumer fees when withdrawing or transferring money out of your PayPal account.
PayPal employs high-level security measures such as advanced encryption, TLS 1.2 connections for login, and 24-hour fraud monitoring to safeguard all online and offline card transactions. Additionally, they implement anti-spoofing, anti-phishing protections, and offer two-factor authentication to prevent identity theft.
Final Verdict: PayPal.
PayPal is the preferred option because of its extensive reach across multiple countries, currencies, and third-party marketplaces. While Square has its advantages in certain areas, such as free website creation and customizable checkout options, PayPal’s broader global presence makes it a more versatile choice for most businesses. You can also embed customizable PayPal checkout pages into your online store, but this feature requires a paid subscription.
When selecting an ecommerce payment processor, it’s important to ensure the features provided align with your business needs. Square and PayPal are two of the leading providers in this space, each offering distinct tools to support your online sales.
Square provides a comprehensive set of ecommerce features suitable for selling both physical and digital products through your website. You can create a website using a variety of templates designed for different types of businesses—including retail, restaurants, service providers, and nonprofits. These templates help you connect with your target audience, build your brand, and effectively showcase your products and services. The website builder is free and doesn’t require coding skills, making it ideal for startups and small businesses with limited budgets. You can customize your site with branding elements, embed your Instagram feed, display store locations and contact info, accept online orders or donations, and even integrate appointment bookings. Additionally, Square enables you to create shareable links, buy buttons, and QR codes, allowing you to sell and collect payments online without even setting up a website. These links can be easily shared via email, social media, or messaging apps to reach potential customers efficiently.Businesses are transforming their Instagram feeds into online shopping carts, making it easier for customers to discover products and make purchases directly from social media. Companies have various methods to serve customers and process orders, including using QR codes for quick ordering, as well as offering shipping, pick-up, and delivery services to meet different needs.
Marketers can also leverage their platforms to highlight discounts, special offers, seasonal sales, and new product arrivals, attracting customer interest and boosting sales. Additionally, Square ensures that your ecommerce website remains accessible and fully functional across a variety of devices such as iPads, laptops, desktops, Android smartphones, and multiple web browsers, providing a consistent shopping experience.
PayPal:
PayPal offers a robust suite of ecommerce tools suitable for small to medium-sized businesses. Unlike Square, PayPal does not provide a platform for building an ecommerce website directly. Nonetheless, it remains a major player in online payments due to its extensive reach. PayPal is integrated into thousands of online marketplaces and prominent ecommerce platforms like eBay and Amazon, making it easy to accept payments from international customers. Its widespread recognition as a trusted payment gateway encourages consumer confidence and facilitates seamless transactions.
You can implement PayPal on your website, such as Shopify, by adding its payment button or invoice features. The platform allows you to customize checkout pages, embed buy buttons, and display purchase details, enhancing the shopping experience. This flexibility means you don’t need an ecommerce site to use PayPal; you simply partner with the right provider to set up invoicing or integrate it into your existing online presence.
PayPal’s integrations with numerous applications simplify transaction management, enabling businesses to monitor sales, transfer funds, and make payments from one centralized platform. Invoices can be sent with multiple payment options or services can be charged via clickable links, providing convenience for both sellers and buyers. With the option to deposit sales proceeds directly into your business accounts and customize the checkout experience, PayPal is often regarded as the top choice among online payment solutions.
International Sales:
Square accepts payments from all US-issued credit cards and popular international cards like Visa, Mastercard, Discover, JCB, and UnionPay. However, its focus is on domestic transactions and tap or scan payments, with current support limited to countries such as the US, Canada, Australia, the UK, Japan, Ireland, and France. Hardware approvals are also confined to the US, which may pose limitations for international expansion.
In contrast, PayPal operates in over 200 countries and supports transactions in 26 currencies, making it the preferred method for international ecommerce. Transferring money via PayPal is quick and straightforward, regardless of geographical distance, and recipients can withdraw funds at their convenience. PayPal’s service Xoom offers additional options for international transfers, including direct bank deposits, doorstep cash pickups, mobile top-ups, and bill payments worldwide.
While PayPal is generally free to use, transaction fees are applied for international payments, with specifics outlined in its merchant fee structure. These fees include fixed charges for international transactions and a percentage fee, typically around 1.5%, plus currency conversion costs. Despite these charges, PayPal remains the leading solution for global, cross-border ecommerce due to its widespread availability and ease of use.
Mobile App:
Square provides a comprehensive mobile point-of-sale application that simplifies accepting various forms of payment, managing inventory, and tracking sales. Available on both iOS and Android devices, the Square Point of Sale app can be downloaded from Google Play, the Apple App Store, and Amazon. The app allows merchants to accept chip, PIN, and contactless card payments through a Square Reader, with funds usually reflecting in the linked bank account by the next business day.
Additionally, the app supports adding products to a sales grid, including options such as gift cards, discounts, and reward redemptions, streamlining the checkout process. It also enables users to create and send invoices or receipts via text message or email, enhancing customer communication. For repeat customers, the app allows saving customer profiles, making returning transactions quicker by auto-filling details and sending automatic receipts.
The POS app further provides reporting features to help manage sales, analyze customer trends, and monitor business performance, making it a versatile tool for small and mobile businesses seeking efficient payment processing and sales management on the go.Focusing on customer insights, the platform provides detailed data on repeat customers, their purchasing habits, spending amounts, visit patterns, and visit frequency.
Other features offered include:
- Acceptance of Visa, MasterCard, and American Express payments.
- Customizable product options with specific names, prices, and images.
- Functions to apply discounts and process refunds easily.
- Real-time tracking of inventory levels.
- Offline mode functionality for use without internet connectivity.
- Seamless integration with Square’s card reader devices.
- Compatibility with receipt printers, kitchen ticket printers, barcode scanners, and cash drawers.
Square offers a Dashboard app that delivers live updates on daily sales summaries, sales by category and item, and overall business progress.
Square also provides dedicated mobile POS applications tailored for retail and restaurant establishments, specifically Square for Retail and Square for Restaurants. Currently, these apps are only available for iPhones.
Square’s employee management tools allow automated wage distribution, comprehensive reporting and analytics, and wage tracking, simplifying staff management processes.
Under reporting, Square offers Square Analytics and Advanced Reporting features. These tools deliver insights into sales summaries, sales trends, item-specific sales, payment methods, deposits, and more. The Sales Summary report details net and gross sales, refunds, revenue, and fees, while Sales Trends enable comparisons over daily, weekly, and monthly periods. The Item Sales report provides detailed data on overall sales, discounts, total items sold, and other metrics.
Additional reporting tools include tax reports for managing tax obligations and understanding taxable versus non-taxable sales, as well as an activity log that tracks complaints, voids, discounts, refunds, and other transactions. Advanced filtering options let you categorize item sales by device, employee, payment method, and more, helping you analyze top-grossing categories and sales performance comprehensively.
PayPal Reports:
PayPal provides a variety of reports including statements, transaction histories, and account summaries that are accessible for download. These reports detail account activity such as total debits and credits, starting and ending balances, and the currency used. You can also utilize User Audit reports to monitor fund movements and the funding sources linked to your PayPal account. Reports can be customized by date range, activity type, transactions, invoices, and other filters. Advanced options include Money Management and Order Fulfillment reports, which are useful for reconciling accounts and tracking order statuses, shipping progress, and pending transactions. Available in formats like PDF, CSV, TAB, Quicken, and QuickBooks, these reports require a secure PayPal file transfer account to access.
Final Verdict: It’s a Draw.
Square Advantages and Disadvantages
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PayPal Benefits and Drawbacks
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Summary Overview
Square and PayPal are recognized leaders in POS software and online payment solutions. Both platforms facilitate easy online payments, in-person credit card processing, and offer various tools to streamline financial operations, though each has specific strengths.
Square is particularly popular for in-person and credit card transactions. It offers a comprehensive POS system, offline functionalities, a free website creator, and specialized apps for restaurant and retail sectors.
PayPal excels in online and cross-border payments with its extensive international support, multiple currencies, and lower processing fees, making it ideal for global transactions.
For more detailed comparisons, check out the article on StepThroughThePortal.com about Stripe versus Square and see which platform fits best for your business needs.