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PayPal has a long history of competition with the likes of Square. PayPal’s popularity is still strong while newer players like Square have made big leaps in terms of features and price, but there are some things that make PayPal better than its competitors.
The “square vs paypal investment” is a debate that has been going on for years. The two companies are in the same industry, but have some differences in price and features. Which one is better?
Square and PayPal are popular payment acceptance platforms that are suitable for most small companies. In addition to point-of-sale (POS) and internet sales, both may be utilized as merchant services. The main distinction is in how they are used. Square’s POS system and add-ons are ideal for in-person sales and company growth. Meanwhile, PayPal’s Zettle is a powerful point-of-sale system that focuses more on online and international payment processing. Unlike Square, it’s also a wonderful complement to other payment processors.
- Square is the best option for mobile and in-store transactions.
- PayPal is the most popular option for online payments and ecommerce.
When to utilize an alternative: If you handle more over $20,000 per month, a regular merchant account rather than Square or PayPal will save you money. Payment Depot is our top pick for low-cost credit card processing.
At-a-Glance Comparison between Square and PayPal
Takeaway: Two of the top credit card processing firms are Square and PayPal. PayPal offers cheaper transaction costs than Square and a greater worldwide reach. Square, on the other hand, provides a more robust collection of business tools for small firms who do in-person transactions. (To learn more about Square and why small companies adore it, see our article.)
When Should You Use Square?
For small companies who offer items or services in person, whether in-store or through mobile, Square is a better option than PayPal. It’s particularly effective in the following situations:
- Stores with a physical location
- Booths or a farmers market
- Eateries, food trucks, and quick-serve restaurants are all available.
- Salons, spas, and gyms
- Shops that provide repairs
- Smaller B2B companies
While its internet presence isn’t as large or well-known as PayPal’s, it does include a synchronized web shop, social selling buttons and links, invoicing, and a virtual terminal for phone orders.
You receive all payment choices as well as a complete array of inventory, sales, customer, and staff management capabilities with your free Square account. When you join up, you’ll also receive a free magstripe credit card reader. Square is the ideal payment solution for you if you’re searching for a payment solution that allows you to start for free, supports all forms of sales, and helps you manage your whole company. If you require more sophisticated features as your business grows, Square has over 100 connectors as well as premium add-ons to its plans, like payroll and banking.
Square’s free tools are remarkable, but the company’s payment processing costs are higher than PayPal’s (except when it comes to invoices.) Furthermore, unlike PayPal, Square does not provide discounts to NGOs. It also has fewer nations in which it operates.
Square should be visited.
When Should You Use PayPal?
When it comes to online or international payment processing, PayPal outperforms Square. It’s also the greatest option for supplementary payments. PayPal’s charges are lower, and it offers substantial savings to NGOs.
PayPal recently purchased Zettle, a widely utilized and well-regarded POS system in Europe, to replace PayPal Here. Zettle, like Square, covers all of the essential retail features and boasts great inventory management. Square, on the other hand, lacks some of the functionality and connections that make it ideal for small companies and the best option for in-person sales. To discover more about PayPal’s POS solutions, read our entire review.
If your principal sales are made online, however, PayPal is the superior option. It’s a flexible system with configurable links and buttons that work with anything from Facebook to emails to customer support chat. PayPal may be found here. to learn more about the benefits and drawbacks of using PayPal for small companies, or to sign up for a free account.
Visit PayPal
The Reputations of PayPal and Square as Money-Holding Services
All credit card processors maintain the right to put money on hold or terminate accounts at any time. This might happen if you misrepresent your company, have a lot of chargebacks, have a rapid increase in the frequency or quantity of payments you handle, and so on.
Both Square and PayPal have a large amount of complaints about monies that have been kept in their accounts. PayPal, on the other hand, has the worse reputation of the two, not just because of the high amount of complaints, but also because of how useless customer service was in addressing the issue. Despite this, both suppliers have good customer satisfaction ratings.
PayPal is the most cost-effective option.
Even with the August 2021 adjustments, PayPal’s rates are typically better than Square’s (which are reflected in this article). The flat additional amount is lesser as well as the percentage portion of the fees. With smaller-ticket products, this makes a considerable impact. On invoicing, Square may be less expensive. This is a pricing comparison for the United States. If you conduct business in other countries, PayPal offers various flat additional amounts for each country. Furthermore, PayPal provides substantial savings to charity, making it a preferable option for many 501(c)3s.
While both provide free POS software, PayPal needs a paid account in order to use its virtual terminal, hosted checkout pages, or chargeback protection. These are free of charge from Square.
Square’s card readers are less expensive, but PayPal’s most basic unit does more. When it comes to POS systems, the costs are near enough to be insignificant.
Square is the best option for mobile.
The bottom line is that Square’s mobile app is superior than PayPal Zettle since it offers more features. Square is also rated higher by real-world consumers on iOS and Android.
Why Is Square Better Than PayPal for Processing Mobile Payments?
For mobile sales, Square’s POS system and credit card processing make it the preferable option. The POS system is designed to make it simple to ring up sales on a smartphone or tablet, and it has all of the same features as the desktop version, including reporting. When the internet is restored, the offline mode allows you to continue taking payments and have them sync when the internet is restored. Square was voted best mobile POS and best mobile credit card processing on our list.
The chip and tap reader from Square is less complicated than Zettle’s, but it costs $49 apiece. (Image courtesy of Square)
When Should You Use PayPal to Process Mobile Payments?
Zettle is also on our list of top mobile POS, and PayPal is one of the best credit card processors for mobile, so you’re still getting a terrific solution if you choose PayPal over Square. This is particularly critical if you wish to accept payments through PayPal, which Square cannot do. While you may use the same Zettle account across numerous platforms, it does not discriminate between locales the way Square does.
Zettle’s card reader is more advanced than Square’s basic model. To add a pin pad, you’ll need to upgrade to Square’s $299 card reader terminal.
The initial card reader from Zettle costs $29, with subsequent ones costing $79 each. (Image courtesy of PayPal)
Square is the best for POS.
Takeaway: Square’s POS system outperforms PayPal Zettle because of its adaptability and depth of features for speciality shops.
Zettle vs. Square: Why Is Square Better?
Square has point-of-sale solutions for a wide range of industries. While the regular version offers certain features for ringing up restaurant products, such as open checks, the free Square for Restaurants program adds clock-in, table management, and item auto-86ing. Meanwhile, Square Appointments, the salon version, allows you to create an appointment schedule. Zettle isn’t even close to having this range of abilities.
Square is readily integrated with over 100 applications aimed at businesses of all sizes. There are even some for the medical area, insurance, and fieldwork. It also has its own set of add-ons. Meanwhile, we discovered nine Zettle integrations.
Square also comes with a free virtual terminal. This is ideal for accepting phone payments or running a mail-order business. PayPal’s Pro plan, which costs an extra $30 per month, is the only way to get this.
Square sells hardware and software to businesses in the retail, restaurant, and spa industries. (Image courtesy of Square)
When Is It Time to Use PayPal Zettle?
Zettle, like the smartphone version, is a wonderful alternative to Square, particularly if you wish to accept PayPal payments. Users praise the system’s user-friendly interface, which they describe as “simple and straightforward to use.” Although there was a restaurant version of Zettle in Europe, PayPal does not mention it on its US website.
At present moment, Zettle does not provide cross-border sales, although it does operate in a variety of nations. Square, on the other hand, is limited to six countries.
What about PayPal in this case? Zettle is gaining new clients thanks to PayPal. While PayPal’s US site said that it will continue to assist Here customers, users in Australia have reported that the service has been discontinued.
Zettle is taking the place of PayPal Here. (Image courtesy of PayPal)
PayPal is the best option for ecommerce and online payments.
Takeaway: It was a close call, but PayPal remains the superior option for online sales. It has a wider reach, is approved by multichannel sales platforms such as eBay, and can be integrated into a variety of applications.
Do you want additional customization options? Take a look at Stripe. Its API and SDK programming are top-notch, making it ideal for standalone online payments and niche applications like app monetization. See how Stripe stacks up against Square and PayPal.
Why Is PayPal a Better Ecommerce Option Than Square?
While Square is firmly tied to its POS equipment, PayPal may function as a stand-alone payment processor. This means you may accept PayPal payments from consumers almost anywhere, including third-party sales sites like eBay. When selling over the internet, its capacity to manage cross-border payments and currency conversions is crucial.
PayPal’s “layaway” or partial payment methods are a distinguishing feature. The PayPal Pay in 4 mechanism, for example, may be used to set up high-ticket products. Customers may pay for an item in four installments using this method. PayPal will take care of this for you. It may also provide credit to consumers. There may be some fees.
Your customers have two partial-payment alternatives with PayPal Checkout. (Image courtesy of PayPal)
What’s New
Afterpay, one of the first buy now, pay later (BNPL) systems, is being acquired by Square. Following the purchase, Square is expected to provide more competitive consumer-facing payment plan choices, similar to PayPal’s Pay in 4 service.
PayPal may not publish all of its connectors as thoroughly as Square, but if you search for a certain ecommerce software, chances are it will have a PayPal integration. You can, however, configure your buttons to appear on any website. (Square supports button programming as well.)
When Should Square Be Used for Ecommerce?
For hosted checkouts, PayPal charges a fee. If you want hosted checkouts, Square is the way to go. Square also interfaces with over 100 online commerce platforms. All of the third-party delivery alternatives are very noteworthy. This is a wonderful approach to extend your consumer base if you own a restaurant. (Read on for additional information on the top delivery services.) In addition, although PayPal offers programmable buttons, Square offers a website builder to assist you in creating a stunning online shop that works in tandem with your Square POS system.
Square features a website builder that is simple to use. (Image courtesy of Square)
Square is the best option for invoicing.
Takeaway: These two systems are useful for invoicing since they enable you to design and send bespoke invoices, manage recurring payments, and send reminders. Square, on the other hand, is the less expensive option.
Why Is Square the Best Invoice Format?
When you need a totally free invoicing system that allows ACH transfers, Square is the way to go. It allows you to give several estimates, request a deposit, and schedule partial payments based on milestones, among other things. When paying via ACH, the fee is 1% of the invoice, with a minimum of $1, making it less expensive than PayPal. Otherwise, each billing will cost 2.9 percent plus 10 cents.
Square allows you to create numerous estimate invoices, divide payments, and more. (Image courtesy of Square)
When Should You Use PayPal?
PayPal, like Square, allows you to create appealing, branded invoices for one-time, recurring, or partial payments. It has a payment rate of 76 percent on the first day after receiving the invoice. It allows e-checks rather than ACH transfers, unlike Square. It charges 3.49 percent + 49 cents regardless of how your consumer pays. As a result, it is more costly than Square.
PayPal claims that 76% of its bills are paid the same day. (Image courtesy of PayPal)
Square is the best payment processor.
Takeaway: These payment processors are both safe and simple to use. Square clearly outperformed PayPal in terms of features, including security and adaptability, as well as having less complaints about cash held in escrow. Square is the best payment processor for small firms performing domestic transactions, despite PayPal’s popularity and worldwide reach.
Why Is Square the Best Payment Processing App?
Square comes in first place on our ranking of the finest merchant services for 2021. While its rates are greater, the variety and tools it offers more than make up for it. Furthermore, it continues to broaden its products, including not just a kitchen display system and contactless QR coding, but also corporate services. It most recently incorporated banking, allowing for the creation of checking and savings accounts. You may also have your money handed out to these accounts more quickly.
Square’s chargeback protection is also noteworthy. It not only works with you to resolve problems, but it also waives the first $250 in chargeback costs every month. If you’re just selling once in a while, this should enough; if not, it’ll still come in handy. If you’re worried about chargebacks and transaction concerns, Square offers a risk management service for an extra fee.
Square also provides banking and human resources services. (Image courtesy of Square)
When Should You Use PayPal?
When selling worldwide or combining PayPal with another payment processor, PayPal is without a doubt the finest option. It also assists and protects sellers in disputes. For physical purchases, it includes a chargeback protection service that costs an extra 0.4 percent every transaction.
PayPal does not share client credit card information with you, which is an intriguing distinction between Square and PayPal (although you do get data like contact and shipping information). This might be comforting to your consumers, who may not want their credit card details released openly, but you can pay for access to this information if you need it.
PayPal also offers financial services to its consumers. It provides a working capital solution as well as a company credit card. Working capital allows you to get a head start on projected credit card sales. After that, you repay the “loan” with a proportion of future sales.
For certain businesses, PayPal Working Capital is a feasible alternative to credit or loans. (Image courtesy of PayPal)
Tied for best customer service
Customers are generally happy with both PayPal and Square customer assistance, despite concerns of frozen payments and terminated accounts. Both have strong user knowledge bases, with a searchable database of tips, how-to articles, and other information. Each includes a few images as well as some videos.
PayPal came in third position while Square came in fourth place in a JD Powers survey of customer satisfaction for merchant services in the United States in 2020. Only BB&T Merchant Firms and US Bank Payment Solutions were able to defeat them, and they triumphed against most large banks, QuickBooks, and well-known services such as First Data.
Still not persuaded that one or the other is the best option for your company? Other excellent options may be found on our list of the top merchant accounts.
Conclusion
You’ll receive a robust payment processor with a free, fully-featured POS system and online sales capabilities, including social selling, whether you utilize Square or PayPal. Both have concerns regarding unclaimed money, but high customer satisfaction.
While PayPal’s rates are less expensive than Square’s, Square is a more comprehensive service altogether. It offers free restaurant and salon POS software, as well as add-ons for everything from customer loyalty to payroll and banking services. It’s the most comprehensive solution available at an affordable price. Create a free Square account right now.
Square should be visited.
The “square vs stripe” is a comparison of Square and PayPal. The article compares the price, features, and what’s best in 2021.
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