Square vs PayPal

Choose between two leading merchant services and start reaping the benefits of a streamlined payment process.

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When it comes to choosing between Square and PayPal, it can be a close call. Both companies are paving the way in payment solutions for small businesses with no binding contracts and reasonable transaction fees.

However, with similar features and pricing, it can be difficult to differentiate between the two platforms. Here we break down the features these platforms share, and how they differ, in a bid to make your decision that little bit easier.

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What do Square and PayPal offer users?

Square and PayPal offer up payment processing solutions for small businesses and individual merchants. Covering both in-person payments and e-Commerce transactions, both companies can aid in streamlining your card payments throughout your business.

You can find out more about what Square's got to offer in our review.

What are the key differences between Square and PayPal?

  1. Square provides more point of sale (POS) hardware for bricks and mortar stores whereas PayPal currently only offers a card reader.
  2. PayPal enables international payments whereas Square's payments are restricted to Australia.
  3. Square offers an all-in-one solution including payment processing and website building, whereas PayPal can only be integrated into already existing websites.

What features do Square and PayPal share?

On the surface, Square and PayPal look like the same merchant service. It's only when you dive a little deeper that you start to uncover the differences between the platforms. Before we start exploring the nitty-gritty detail, here's what both platforms have in common:

  • Free POS app that is compatible with most devices supporting IOS and Android.
  • Accept different types of payments including Visa, Mastercard and contactless.
  • Detailed reporting of daily transactions and payments.
  • Refunds and partial refunds can be issued to customers.
  • Discounts and deals can be applied to transactions.
  • Supports barcodes and Stock Keeping Unit numbers (SKUs) for stock keeping.
  • Prints, emails or texts receipts for in-person and online transactions.
  • Recurring billing for repeat or regular payments.
  • Item library to keep track of what you're selling with product descriptions.
  • Invoicing to request payments from customers.

Which has the better card reader: Square Reader and PayPal Here?

Both Square and PayPal facilitate in-person payments with a compact card reader, known as Square Reader and PayPal Here. Here's a quick comparison of the two:

SquarePayPal
Price$59 + GST$90 + GST
Transaction feeFrom 1.9%From 1.95%
DepositsWithin two business days to your bank accountImmediately to your PayPal account
Payments accepted
  • Visa
  • Mastercard
  • American Express
  • EFTPOS
  • Google Pay
  • Apple Pay
  • Samsung Pay
Sign up now.
  • Visa
  • Mastercard
  • American Express
  • Google Pay
  • Apple Pay

It's worth noting that Square also has a lot of POS hardware, which can come in handy if you're setting up a brick and mortar store. Here's a quick run-through of what Square offers other than the Square Reader:

  • Square Terminal. Compact and wireless device that accepts card payments and print receipts.
  • Square iPad Stand. Create a payment terminal from your iPad with a swivel stand and card reader.
  • Accessories. Anything from receipt printers to cash drawers and barcode scanners.

How do the POS apps compare?

Square and PayPal both have a POS app, which allows you to keep track of sales and change any settings from your iPad.

Square's POS system is highly praised for its ease of use. This user-friendly app allows you to access all of the payment information in real-time and make any adjustments you might need to your payment processing on-the-go.

A few added features Square's app offers up include inventory management abilities, including low-stock alerts and bulk loading. You'll also be able to build up a customer database and connect with additional apps including Square Loyalty and Square Marketing. You'll need to pay to use these additional features but they can be useful for developing a marketing strategy.

While PayPal's app is useful for users, it lacks some of the additional features you'll find on Square and doesn't have the same sophisticated interface.

How do Square and Paypal differ in e-Commerce?

Despite being primarily a POS system, Square is hard to beat when it comes to offering an all-in-one solution for small businesses. With a fully integrated system, Square allows you to process your in-person and online payments, as well as your website all from one platform. PayPal doesn't offer website-building capabilities, but as such a well-known platform, it can be seamlessly integrated into plenty of third-party building platforms.

PayPalSquare
CostN/AFree and paid plans available
Key features
  • Lots of third-party integrations are compatible with PayPal.
  • Custom checkout solutions.
  • Donation buttons are available.
  • Free website building platform.
  • Website hosting.
  • Payment integration systems.
  • Beginner-friendly.
  • Limited customisation.
  • Integrates with popular website building platforms like Wix, Weebly, and BigCommerce.
  • Square Online Checkout enables customisation options.

Can you trade internationally with PayPal and Square?

Being able to trade internationally can be make and break for some small companies that are hoping to expand their sales across the Aussie borders. At the moment, Square doesn't support international transactions, whereas PayPal does.

How does pricing work?

Luckily for modern sellers, neither Square nor PayPal asks customers to enter into a contract. You'll simply need to pay a percentage on the card transactions that go through your business. When it comes to payment processing, PayPal and Square demand very similar fees. Where they differ is in charges such as chargeback fees and virtual terminal hosting.

SquarePayPal
Card reader$59 + GST$90 + GST
Swiped, tapped or contactless1.6% through Square Terminal

1.9% through Square Reader

1.95%
Online payments2.2%2.6% + $0.30 for domestic transactions

3.6% + fixed fee for international transactions

Virtual terminal payments

2.2% per transaction

3.6% + $0.30 for domestic transactions

4.6% + fixed fee for international transactions

Chargeback feeN/A$15
Recurring payments2.2% per payment2.6% + $0.30 per domestic transaction

What support do Square and PayPal offer?

Unfortunately, neither Squarenor PayPal receives particularly high praise for their customer support. While both offer up a number of customer support channels, it can sometimes be difficult to reach a human to speak to on both platforms.

When you sign up with Square, you'll have access to their Support Centre and Seller Community. Both of these provide invaluable sources of information when it comes to fixing common problems or answering frequently asked questions. To contact them directly, you have the choice of speaking to an advisor over the phone, emailing or heading over to live chat.

PayPal offers similar channels of support including the PayPal Hub Home and PayPal Community Forums. While you can contact an advisor over the phone or via email, many users report that the quickest way to get a response is over either Facebook or Twitter.

Pros and cons of Square and PayPal

Square

Pros
  • All-in-one payment system
  • Website builder and online store
  • Easy to set up
  • Fast bank deposits
Cons
  • Not suitable for international sellers
  • Unreliable customer support

PayPal

Pros
  • Well-established brand that is trusted by consumers
  • Instant deposits into PayPal account
  • Enables international payments
Cons
  • Extra fees for virtual terminal and chargebacks
  • Less hardware available compared to Square
  • Some transaction fees are higher than Square

Bottom line

While PayPal and Square may look similar on the surface, they have subtle differences that could affect your company and it's profits. Understanding the key features of both will have you better prepared to pick to the right payment processing merchant for your needs.

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