Square Vs PayPal

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As e-commerce continues to dominate the world economy, finding the most effective online payment application has become an extremely important task. Online payment services have proven to be a valuable tool for businesses of all types and sizes. This includes community-based companies to large-scale, global corporations. Square and PayPal are two of the most well-known payment service applications. The debate of Square vs PayPal over which provides the best experience for businesses rages on.

Square

Square was founded in 2009 as a way to combine company services and mobile payments into a concise, simple service. Used for a wide variety of services including processing credit and debit card payments, tracking sales and inventory, providing refunds, and compiling sales data, Square has quickly grown into a billion-dollar-a-year industry. Small businesses, in particular, have gravitated toward Square, finding its complex set of service options bundled into a simple and low-cost application very beneficial.

PayPal

PayPal was originally launched in 1998 by Confinity, officially getting its name when it merged with X.com in 2000, one of the earliest online banking companies. PayPal gained notoriety as one of the primary payment options for eBay. Eventually it became so successful that eBay purchased the application in 2002 and made it the official money transfer service of the website. In 2015, it became an individual service provider. PayPal provides businesses and consumers with several different functions including money transfers, credit and financing services, and separate provisions for in-person and online transactions.

Square vs PayPal – Main Differences

Although Square and PayPal offer consumers and businesses several similar service options, they do have some major differences. Being aware of these differences in Square vs PayPal is vital when choosing the best service provider for your business.

Square vs PayPal Fees

While there are several differences in the fee structures between Square and PayPal, the biggest overall difference between the two applications is that PayPal has monthly fee payments, whereas Square does not. Another key difference is that PayPal tends to be a little more expensive per transaction. Below are the most common fees associated with both service providers:

  • Chargeback

Square – None

PayPal – $20

  • QR Code Payments

Square – 2.9% + $.30 per transaction

PayPal – 2.7%

  • Virtual Terminal Keyed Entry

Square – No Monthly Fee, 3.5% + $.15 per transaction

PayPal – $30 per month, 3.5% + $.30 fixed fee

  • Recurring Invoice Billing

Square – No Monthly Fee, 3.5% + $.15 per invoice

PayPal – $10 per month, 2.9% + $.30 per invoice

  • Physical Card Transaction

Square – 2.6% + $.10 per interaction

PayPal – 2.7% + $.30 fixed fee

  • Business/Store Payment Terminal

Square – Starts at $299

PayPal – Starts at $249

If you are a business processing more than $5k/month, talk to an expert here at Payline Data. Using our interchange plus pricing method, you will save between 30-40%!

International Services

One of the biggest differences in Square vs PayPal is the service options for international business and payments. Card payments through Square can only be processed in the US, Canada, Australia, UK, Japan, Ireland, and France, and can also only be processed by residents of the home country the Square account is registered with. Cross-country card payments are also not supported by the application, even between the 7 Square-supported countries. However, it is important to note that cash transactions can be processed while traveling internationally. PayPal, on the other hand, is very international-friendly and contains few of the restrictions of Square. With the ability to process all types of cash and card payments options in over 200 countries and 25 different currencies, PayPal is the ideal option for international businesses and consumers.

In-Person/Point of Sale Payment Services and Transactions

Bothl have standard credit card scanners for in-person selling including free plug-in readers. Bluetooth readers are also available for NFC payments in both applications to process payments from Apple Pay and Google Pay. However, the similarities for Square vs PayPal end here as PayPal has few other options for in-person/point of sale transactions. Alternatively, Square has many other helpful features. While PayPal does have a basic terminal to process payments, Square includes options for a Square Stand for an iPad, and a Square Terminal for basic transactions. Lastly, they have a Square Register which is a completely integrated point of sale terminal designed to handle all types of payments and transactions. All of Square’s point of sale systems include proprietary technology specifically designed for superior in-person customer experience, far outpacing any in-person/point of sale options offered by PayPal.

Financing and Credit

Both Square and PayPal offer financing and credit options for users. This includes merchant cash-advance short-term business loans with a maximum repayment period of 18 months. Square limits these short-term business loans to $100,000. On the other hand, PayPal allows a business to take out a short-term loan for $125,000 for its first 2 loans, and up to $200,000 for any additional loans. PayPal also provides other types of business loans through its subsidiary LoanBuilder. LoanBuilder gives a much greater selection of loan options for businesses to choose from.

Software Integrations/Add-ons

Square and PayPal each take a markedly different approach in how they incorporate different integrations and add-ons to enhance their software. Block (formally known as Square) generally chooses to create and develop their very own separate software to meet the needs of their customers, while PayPal instead usually decides to partner with several different service providers and companies. While both approaches have their inherent advantages and disadvantages, Block’s, aka Square’s, approach allows for a more seamless and simplified customer experience. This is by allowing consumers to customize their interface without having to sign-up and set up applications for other service providers. For example, Square comes with its very own e-commerce site for companies, an ideal option for new or smaller businesses.

Square vs PayPal – Which is Better?

Both Square and PayPal offer a different set of advantages and disadvantages for businesses and determining which is best.

Square is a better option for businesses looking for a superior in-person customer experience with its masterful array of top-notch point of sale hardware and software. It is also better for businesses looking for a more streamlined approach to formulating an e-commerce presence. This is because it comes with its very own e-commerce website and other add-on features. Square is also a little less costly to use than PayPal. It doesn’t have monthly or chargeback fees, while also costing a little less per transaction.

PayPal is a better option for businesses that are operating internationally or are planning to do so. It is better for businesses looking for financing as it offers a more diverse set of short-term business loans than Square. It also is a better option for businesses who have existing relationships or accounts with other 3rd party applications such as Shopify.

If you are a business processing more than $5k/month, talk to an expert here at Payline Data. Using our interchange plus pricing method, you will save between 30-40%!


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