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Paypal vs. Stripe vs. Square: The Ultimate Match-Up

You’ve heard of Paypal, Stripe, and Square, but which one is best for your business? Each service has its own advantages and disadvantages, so putting all three services through their paces will bring you the ultimate match up.

Highlights of each platform at a glance
Although Paypal, Stripe, and Square are similar to one another, each service has unique features that help distinguish it from the competition.
• Paypal: Paypal has the advantage of being extremely popular and easy to use for both businesses and consumers. According to research from TSYS, 12 percent of US consumers prefer Paypal to other payment methods. That makes it a clear choice for companies that want to offer their customers a convenient way to pay.
• Stripe: Stripe is excellent for online credit card processing and is perfect for a brand-new startup. You can use Stripe’s application programming interface (API) to build a custom experience for your customers. This option is free through Stripe while Paypal will charge extra for customization.
• Square: Square is the best choice for businesses with both offline and online sales, especially restaurants or businesses in the hospitality industry.
Drawbacks of each platform at a glance

Each service has limitations and disadvantages that require consideration.
• Paypal: Paypal charges an additional monthly fee for customized e-commerce integration, while Stripe does not.
• Stripe: Stripe can be integrated into some platforms such as Weebly or WIX with a minimum of skill. However, integration with other platforms typically requires programming skills. If you lack coding skills, you’ll likely need to hire a developer (or freelancer) to implement Stripe into a website. Crucially, Stripe offers no support for Paypal payments. That can be a turn-off for some customers.
• Square: While Square’s fee structure is similar to that of Stripe, Square’s slightly higher transaction rates will start to bite when your business grows above $17,000 in monthly revenue.
Variables to consider

Before delving into the ultimate match-up, it is important to note that there are many variables to consider.
• Are you establishing an online business or transitioning your existing business online?
• Do you handle offline and online payments?
• Do you have coding skills or the budget to hire a developer?
As you’ll see, in certain circumstances all three services can be perfect for startups and those with limited or no programming skills. You will only start to see a difference in fees when sales begin to climb.

The Ultimate Match-Up

To thoroughly compare all three of these services, you need to look at three key areas:
• Ease of use: How difficult is the service to set up and implement?
• Features: What can and can’t each service offer?
• Pricing: Which seemingly innocuous costs can scale poorly?
Match-Up #1. Ease of use


Paypal is arguably the most accessible service to use. It’s simple to set up an account and use PayPal on any website via either HTML or via API. As the payment method favored by 12 percent of US consumers, Paypay has a vast number of partners, including approved consultancy firms, Shopify, WordPress, Squarespace, Zapier, Magento and more. Paypal integrates with almost everything you want.

Paypal is great for non-technical people and has a clean and intuitive user experience (UX) and user interface (UI). This ease of use extends to your customers as well; Paypal’s OneTouch is arguably the easiest way for any customer to pay online.


Stripe is just as easy as Paypal for non-technical people to use. It integrates with Shopify, WordPress, WooCommerce, Squarespace, Bubble, Zapier and many more. A crucial difference between Stripe and Paypal is that Stripe’s API lets you customize your payment experience, whereas Paypal charges you extra for this service. You can install additional services such as Sigma if you want to track your data or Relay if you’re going to sell other people’s goods through your app or website.


Square is best for companies that need extra services to help manage their entire business such as inventories, vendors, and wages. Square integrates with Quickbooks, IFTTT, Vend, TouchBistro, WooCommerce and more. Square’s point of sale software is incredibly simple for staff such as shopkeepers or sales staff to use.

While Square’s free online store is very basic, the company makes it very easy to connect your website to Square. They group everything according to your level of expertise. So, for example, you can connect Square with WIX, Weebly or GoDaddy sites without needing to write any code. Some skills are required if you want to integrate Square with an open source partner such as WooCommerce or Opencart, however prebuilt Square integrations are available.

Match-Up #2. Payment Platform Features


As you might expect from the company which took digital payment processing mainstream, Paypal offers one of the best payment experiences for customers, mainly via its OneTouch service. The easier it is for consumers to pay, the higher the chances of a completed sale. From a business perspective, Paypal offers full service, but its tracking features and reporting are not as comprehensive as those of other services. Enterprises are more likely to choose Braintree, for example.

One stand-out feature of Paypal is that it offers loans of up to 18 percent of your through-Paypal revenue.


Stripe is a well-known platform that does many of the things you would expect. It accepts debit and credit cards, as well as AliPay, Android Pay and Apple Pay. One added advantage of Stripe over both Paypal and Square is that it accepts the cryptocurrency Bitcoin as well as Automated Clearing House (ACH) payments. ACH can be useful if your business offers bulk financial transactions.

A crucial advantage of Stripe is that its API can be customized, whereas services such as Paypal charge an extra monthly fee for customization services. Stripe also leads the pack in value-added services. Stripe Atlas lets any company incorporated as a US firm and set up a US bank account, even if they are outside the US. Stripe offers a full complement of legal and financial services.

Stripe has better subscription tools than Square and offers better fraud protection, but its inventory management tools are inferior. Stripe is better for tech-savvy merchants who have coding skills or the budget to hire programmers. For example, you need to have an integration such as Flint Mobile if you want to accept in-person payments with Stripe, and it costs more than other mPOS offerings. Stripe has no virtual terminal, for example.


Whereas Stripe is more limited to eCommerce applications such as websites and mobile apps, Square is a great choice if you want to handle offline payments. Square offers four main solutions:
• A free app and card reader: This iOS and Android app is a great general-purpose point of sale (POS) software.
• Square eCommerce: This is free and integrates with popular platforms, plus has API for customization.
• Square for Retail: For $60 per month, Square provides specialized software for retail stores.
• Square for restaurants: Also $60 per month, aimed at full-service restaurants.
Square’s point of sale (POS) system is outstanding as it enables you to handle both online and offline payments through the same platform. It can manage all the main debit and credit card services that you would expect and it also helps you to process fees for services via its unique calendar and booking system. For example, if your customers want to book and pay online, Square has use-case advantages over Paypal and Stripe.

In common with Paypal, Square also offers added value services such as virtual loan systems. Square offers loans based on your business’ sales and offers loans of between $500 and $100,000. Unlike regular loans, repayments are fully automated and directly deducted from your sales. So far, over 130,000 small businesses have taken advantages of these loans, according to Square.

Square is great for businesses who lack technical expertise or the budget to hire people. Its tools are easy to use, and it’s great if you want to sell anywhere but don’t want to build a complicated system of integrations. Square lacks subscription tools, and fraud protection isn’t as good as Stripe.

Match-up #3: Pricing


Paypal is available in three different tiers, depending on your needs. The first tier is a free way to add a Paypal portal to your website via HTML. Your customers can complete their transaction via Paypal. There is no monthly fee, but there is a variable transaction rate starting at 3.4 percent plus 40 cents for monthly revenue under $1,500. If your business clears between $15,000 and $55,000 per month, Paypal’s rate drops to 1.9 percent plus 30 cents. Paypal recommends that you contact them for a custom quote if your business’ revenue is higher than $55,000.

If you want custom API integration, you need to pay $30 per month for Paypal’s second tier. That means you can custom-integrate your website’s checkout process and get a custom quote for transaction rates. Paypal’s third tier, designed for customers who want to add Paypal to their existing credit card processing system, has the same transaction rates as the first tier.

If you want to use Paypal to handle offline sales, there is no monthly fee for accepting chip and PIN or contactless payments via Paypal. Paypal has a free app and card reader device, just like Square. Paypal charges between 1.5 percent and 2.75 percent per chip and PIN transactions, depending on your overall sales volume. Manually entering the card details or swiping the magnetic strip is charged at 3.5 percent and 15 cents per transaction, the same rate as Square.


Stripe differs from Paypal in that it doesn’t require a monthly fee. However, it charges a flat 2.9 percent plus 30 cents per transactions, and there are no tiers or custom quotes. On one hand, the absence of a monthly fee means that your business won’t lose money if you aren’t selling. On the other hand, if you are handling large payment volumes, the transaction fees will soon start to add up.

Stripe charges 2 percent per international sale, which is higher than the other services. The chargeback rate of $15 is competitive.


Square charges the same 2.9 percent plus £0.30 for online payments as Stripe, making comparison very straightforward. However, Square charges 2.75 percent for any swiped card transactions, including inserted chip cards, contactless (NFC) payments and prepaid gift cards. This fee rises to 3.5 percent plus 15 cents per transaction for “card on file” transactions, manually keyed-in card payments, and virtual terminal payments.

Square sends you a magstripe reader for free when you sign up, but if you want an additional chip card reader, that’ll set you back £29 while a contactless and chip reader costs $49.

If your business generates over $18,000 in monthly transactions, other service providers could save you money. However, Square provides loans and software based on your sales volume, so you need to balance these benefits with potential cost savings.

Best for frictionless customer experience: Paypal

If you’re looking for the most straightforward option for both your business and your customers, Paypal is your go-to option.

Best for new online businesses and startups: Stripe

Stripe lets you customize your e-commerce process without the monthly fees that Paypal charges. Its strongest selling point is the Stripe Atlas service, which helps any business operate as a legal business entity in the US. Stripe isn’t suitable if you want to accept offline sales, and its most significant drawback is that it doesn’t accept Paypal through the same system.

Best for small businesses with both offline and online sales and physical outlets: Square

Square’s advanced and intuitive POS system is superior to both Paypal and Stripe for handling offline sales. Square lets you centralize all payment processing, making it ideal for businesses with online and offline sales. However, Square is less cost-effective if your company handles over $18,000 in monthly revenue.

Final thoughts

Ultimately, choosing the right service comes down to your business needs. If you want ease of use and are in the business of selling physical goods, Square is hard to beat. If you need advanced data, robust tools and flexibility, Stripe’s greater number of supported integrations will stand you in good stead.

Paypal Vs. Stripe Vs. Square: the Ultimate Match-Up
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