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Stripe vs. PayPal vs. Square: Which Is Right for Your Business?
Square’s pricing is best, but Stripe and PayPal have other features you may want in a payment service provider.
Assistant Assigning Editor | Taxes, retirement, small business, Social Security, estate planning, home services
Tina Orem is an editor at NerdWallet. Prior to becoming an editor, she covered small business and taxes at NerdWallet. She has a degree in finance, as well as a master's degree in journalism and a Master of Business Administration. Her work has appeared in a variety of local and national media outlets. Email: <a href="mailto:torem@nerdwallet.com">torem@nerdwallet.com</a>.
Ryan Lane is an editor on the small-business team and a NerdWallet authority on student loans. He spent more than a decade as a writer and editor for student loan guarantor American Student Assistance and was a managing editor for publisher Cell Press. Ryan’s work has been featured by The Associated Press, USA Today and MarketWatch, and he previously co-authored the U.S. News & World Report Student Loan Ranger blog. Email: <a href="mailto:rlane@nerdwallet.com”">rlane@nerdwallet.com</a>.
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⏰ Estimated read time: 6 minutes
Stripe, PayPal and Square are payment service providers, or PSPs, that help small businesses accept payments in person and online. Stripe may be best for small businesses that prioritize customization, and PayPal may be better for small businesses with an international customer base. But if price is key, Square may be your winner.
Payment service providers give small businesses a way to accept payments through a payment gateway and a merchant account. Here are some things to keep in mind as you shop for a PSP:
What kind of pricing structure you want: interchange-plus, flat-rate or tiered. Your industry, sales volume and priorities will influence your answer.
Whether you need an integrated point-of-sale system. If you’re selling online, this may be less important.
What industry you’re in. That may influence your pricing and options.
Stripe is a popular payment service provider that allows small businesses to accept credit cards, mobile wallets, ACH payments and more. There are a lot of ways to integrate Stripe into your e-commerce site because it’s built with developers in mind. It also provides a payment terminal for in-person card transactions if you have a brick-and-mortar store.
Stripe supports global transactions, can process over 135 currencies and supports multiple languages, including Chinese, Spanish, French, Dutch and Italian; this can be valuable for small businesses that want to expand overseas. Stripe’s services work with major e-commerce platforms such as BigCommerce and WooCommerce.
Stripe has two primary payment processing products.
Stripe Connect
Stripe Connect can process over 135 currencies and complete transactions in over 30 countries. Connect is highly customizable, letting small businesses control signup, onboarding and payout timing, and get financial reporting. Pre-made user interface components exist, or you can customize everything using the Stripe API.
Stripe Checkout
Stripe Checkout streamlines checkout on mobile via an API that creates a Stripe-hosted payment page. It works across desktop and mobile, as well as with Apple Pay and Google Pay, and you can customize the buttons and background color. Discounts, sales tax and email receipts are also supported. It works in over 25 languages.
PayPal features overview
PayPal lets small businesses accept and process payments in person and online. It offers two payment gateway services: PayPal Payments Standard and PayPal Payments Pro. PayPal’s services work with major e-commerce platforms such as BigCommerce, Wix and Shopify. You'll need a PayPal Business account to get started.
PayPal Payments Standard
This product may be best if you don’t have coding experience or a developer on your team, as you’ll simply need to copy and paste a line of code or install a plug-in that works with your existing shopping cart. Either option should only take 15 minutes, according to PayPal’s website.
PayPal Payments Pro
This is a customizable checkout solution that also provides access to a virtual terminal so you can accept credit cards online, via mobile or with devices that don’t have an external card reader. Also, you can accept payments in 25 currencies from 200 countries, accept phone payments, and get simplified PCI compliance.
Square may be known best for its point-of-sale software and its little white tile that plugs into checkout systems, but Square is also a payment service provider. It works with credit cards, debit cards, corporate cards, prepaid cards and reward cards.
Card payment acceptance with the Square app is available only in the United States, Canada, Japan, Australia, the Republic of Ireland, Spain, France and the United Kingdom. It doesn’t support payment card processing in U.S. territories, nor does it support cross-border card payments (i.e., you can’t receive card transactions if you’re outside the country where you activated your Square account).
Square integrates with Wix, BigCommerce, GoDaddy and other e-commerce platforms. The company’s APIs allow for customization. Businesses can also invoice customers digitally and take card payments without using the Square POS.
In addition to using its POS hardware systems for in-person payments, Square can process payments three ways.
Online payments
Square offers online payment services that you integrate into your online store or mobile app. You can also get a free e-commerce website and add pickup and delivery services or sell on social media.
Remote payments
Square lets small businesses create and send digital invoices to customers, and those customers can then pay with a card or via ACH. You can also send customers a payment link by text or email.
Here’s how these providers compare on monthly fees and transaction fees.
Monthly fees
Stripe
$0 for standard Stripe Connect.
$2 per account for Stripe Express (for marketplaces) or Stripe Custom (the white-label option that allows businesses to customize the checkout process).
PayPal
$0 for standard service.
$5 for PayPal Payments Advanced.
$10 for Advanced Fraud Protection service, buyer authentication service or recurring billing service.
$19.95 for account monitoring service.
$30 for Payments Pro, Payments Pro Payflow, Virtual Terminal or recurring payment tool.
Square
$0 for Square POS, Restaurant, Retail and Appointments Free plans.
$29 for Square Appointments Plus plan.
$69 for Square Appointments Premium and Square Restaurants Plus plans.
$89 for Square Retail Plus plan.
$165 for Square Restaurant Premium plan.
Custom pricing for Square Retail plan.
Transaction fees
Stripe
2.7% plus 5 cents for in-person transactions.
2.9% plus 30 cents for online transactions.
3.4% plus 30 cents for manually keyed transactions.
4.4% plus 30 cents for international card transactions.
PayPal
2.29% plus 9 cents for in-person and QR code transactions.
3.49% plus 9 cents for manual-entry card transactions.
2.99% plus 49 cents for invoicing (payment made with card).
3.49% plus 49 cents for invoicing (payment made with PayPal).
Square
2.6% plus 10 cents for in-person transactions.
2.9% plus 30 cents for online transactions.
3.5% plus 15 cents for manually keyed transactions.
3.3% plus 30 cents for invoices.
These rates are for businesses that process less than $250,000 per year and have an average ticket size under $15. If your business is larger, Square will do custom pricing. Note that sometimes the custom rates are more than 2.6% plus 10 cents.
Other fees
Stripe
Additional 1% fee for currency conversion.
Disputed charges incur a $15 fee.
Small businesses can also design custom packages. Rates vary depending on volume discounts, multiproduct discounts and country-specific rates. Pricing is also quote-based for the custom Connect plan.
PayPal
Other fees, including chargeback fees and mobile card reader fees, are on PayPal’s merchant fees page.
NerdWallet’s ratings are determined by our editorial team. The scoring formula takes into account the type of software being reviewed (such as accounting, point of sale, invoicing or payroll) and the software’s range of features, cost, integrations, customer support and more.
NerdWallet’s ratings are determined by our editorial team. The scoring formula takes into account the type of software being reviewed (such as accounting, point of sale, invoicing or payroll) and the software’s range of features, cost, integrations, customer support and more.
NerdWallet’s ratings are determined by our editorial team. The scoring formula takes into account the type of software being reviewed (such as accounting, point of sale, invoicing or payroll) and the software’s range of features, cost, integrations, customer support and more.
NerdWallet’s ratings are determined by our editorial team. The scoring formula takes into account the type of software being reviewed (such as accounting, point of sale, invoicing or payroll) and the software’s range of features, cost, integrations, customer support and more.