Stripe vs. PayPal vs. Square

Swipsesum details all you need to know about Stripe vs Paypal vs Square. Get more information on the best payment solutions for small business.

you're familiar with PayPal, Square, and Stripe. These three are big players in the payments industry and for good reason.

They’re easy to set up and intuitive to use for both online transactions and in-person transactions. That makes them a great way to get your company up and running right away.

All three of these services boast:

  • User-friendly interfaces
  • The ability to accept many payment methods
  • A simplified overall merchant experience

Those shared qualities mean business owners should take the time to recognize the important differences between these payment processors. Then, decision-makers should choose the provider that best aligns with their business goals.

At Swipesum, we’re passionate about finding the best payments solution for each unique business, whether it’s Square, Stripe, or PayPal. We’ve created this quick reference guide to three of the most popular payment services providers out there. Book your free consultation to learn more.


Industry stalwart PayPal allows your business to accept in-person and online payments through a variety of payment options. From debit and credit card payments to Apple Pay, you can accept payments in just about any way a customer could desire.

Everything is handled directly through PayPal’s software, including invoicing. This helps to ensure you're paid promptly.


Because PayPal is so well known, you’re offering your customers a trustworthy way of paying that in turn makes your business look more credible. Your customers know their information will be safe. When it comes to Stripe and Square, consumer awareness is steadily increasing but isn’t quite yet at the PayPal level.

Plus, since most people already have an existing PayPal account, they won’t have to do any extra work when it comes time to check out.

In addition to accessibility and security, PayPal also offers a wide variety of payment options. If your business is run online, in-store, or both, PayPal can support your payment needs. All you have to do is purchase a card reader for your smartphone or tablet.

Then, you can accept credit cards, debit cards, and even contactless payments in-store with minimal prep work. For online businesses, PayPal easily integrates into any website. You can accept even more payment options like PayPal credit or Venmo.

The best part about PayPal for small businesses that are just getting started is that you don’t actually have to do much work. They handle all the processing, all you have to do is pay and get paid. That’s a key point to keep in mind when debating Stripe vs. PayPal vs. Square.


There are some not-so-great aspects of PayPal, though. The biggest drawback is the price tag.

You're paying for the convenience of all-inclusive software, and that may not be possible for your business if you're just getting started. Mobile and card swipe sales will cost 2.7% of each transaction, while online and invoiced transactions will pull 2.9% and $0.30 from your revenue.

You may not have to pay a startup or termination fee as you do for some processors. However, PayPal’s non-negotiable transaction fees are higher than you might find with a traditional payment processor.

PayPal makes it possible to run your business without a merchant account or separate gateway. Yet, their structure requires a lot more waiting on your part. PayPal payments can take 3-5 days to arrive in your business account, whereas a traditional processor can complete the same deposit in as little as 5 hours.

Running days behind on deposits can make the day-to-day operations of a small business a struggle. In the same vein, because PayPal does much of the work, there isn’t a lot of flexibility for growth or contract changes.

Whether you are making 10 transactions a month or 10,000, you’ll see the same rates. If you’re looking to expand some day, it may be easier to just invest in your own payment processor.


Square is the trendy younger brother of PayPal.

While offering a lot of similar functionality, Square is best known for its convenient hardware and software bundles. Merchants can walk into any electronics store, pick up a Square system, and have a working payments system in a matter of hours. Square’s products look good, too.

With simple options like Square Point-of-Sale (POS), or more complex systems like Square for Retail, they offer great flexibility for many different kinds of businesses.


Like PayPal, one of the biggest advantages of using Square as your payment processor is the convenience and ease of use.

It won't take too much time to set up, and you can start selling right away with the free smartphone/tablet magstripe reader included in your service. Additionally, although not quite as widespread as PayPal, Square's brand is broadly recognized and trusted by consumers. You're unlikely to have have many security concerns.

The platform also offers two different service options, one being specifically designed for retail. Square for Retail offers a set of intuitive tools that are already integrated with the system specially designed to manage multiple vendors as well as front and back of house work.

If you’re just getting started, the Square POS is a cost-effective way to run your business from your smart device without needing to invest in additional hardware.

Finally, Square won’t require any clutter in your store. You won’t need unwieldy checkout hardware — everything related to payment processing can be run on smart devices.

This distinction has given Square a positive reputation among small businesses (including hip coffee houses and local designer goods). Square has a certain level of trendiness that makes it more appealing to merchants and customers alike.


Like its big brother PayPal, the greatest con for Square is the price tag.

In addition to paying high fees on every transaction, you also have to pay for Square-specific POS terminals and online systems. Every system comes with a different processing rate. The basic Square POS will take 2.75% off of every transaction. Square for Restaurants, meanwhile, will take 2.6% plus $0.10 per transaction.

Knowing what service you’ll need is crucial to the decision-making process. The free magstripe reader from Square sounds great, but you can’t run a whole business with it. You’ll likely have to take on additional hardware costs fairly quickly.

Square also has the downside of lack of control. If you use Square, you are all in, including terminals, online buying, and the actual payment processing. You won’t be able to change any one part of your payments setup, you’ll have to change the whole thing. If you need a more flexible solution for payment processing, you might have to look somewhere else.

And finally, since Square is run through smart devices and apps, you may run into problems with older customers who don’t understand how the technology works. They may even be wary of using it. Be sure that the aesthetic and reputation line up with your business before taking the plunge with Square.


Stripe, the new kid on the block and perhaps the “techiest” of the three, is a software for online businesses.

It is rooted in a mission to fix payment problems with code as opposed to finances.

Stripe is relatively new, having only been launched in 2011. However, it has grown quickly into a major force in the industry.


One of the biggest advantages of the software is that you don’t really have to know anything about finances to run it. That could save you from having to hire someone to do that for you, in addition to your payment processor.

All of the applications associated with the software, including revenue management, fraud protection, and a billing API that integrates with already developed websites, are found in the same place. That makes the system easy to use.

In addition to this ease of use, Stripe doesn’t require much setup (if any) on your end, and you’ll be able to start making transactions right away. These are key points to keep in mind when considering Stripe alternatives and Stripe competitors, bringing us back to the central Stripe vs. PayPal vs. Square debate.

Other pros center around the mission of the platform. Stripe is committed to a more sustainable future by becoming an environmentally conscious and carbon-neutral company. If that is something important to your own business mission, it’s something to consider.

Stripe is also dedicated to offering its services globally, which makes it easier for you to sell your goods and services outside U.S. borders. If you’re an online-only business, this could be a big advantage.


The most obvious downside of Stripe is that it only offers software for online businesses. If you have a brick-and-mortar store, or you do a combination of in-store and online purchases, Stripe just won’t work for you.

Like the other options, Stripe also comes with a pretty steep price tag that only really works for small businesses that need the convenience that Stripe offers. To make things more complicated, Stripe offers different service tiers, meaning that small businesses might have to pay a hefty price to get the features they need.

While the pricing tiers are certainly more flexible than what PayPal or Square might offer, the limited features of the lower tiers might hinder your mobility.

Finding a Traditional Processor

Every small business has different needs, and it may very well be that one of these services meets those needs perfectly.

These companies are successful for a reason, and they do offer comprehensive services for small companies who are looking to stay small. However, if none of these all-in-one systems pique your interest, you may want to seek out a traditional processor to meet your business goals.

Selecting a processor and payments setup can be a daunting task, but feel free to consult the payments experts at SwipeSum if you need any help. We specialize in finding the best solution for your unique business at the lowest rate, guaranteed.

Consultations are completely free, so you’ve got nothing to lose. Visit to begin your free consultation.

Taft Anderson

Taft Anderson

Taft Anderson is the former Product Marketing Manager of Swipesum. A graduate of Washington University in St. Louis' Olin Business School, Taft is a content and branding expert.

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