Square vs. PayPal: Card Reader (POS), Business Accounts, Fees

Adam Rozsa

22.03.24 (last updated)

7 minute read

In the world of payment processing, Square and PayPal are two powerhouse names that almost need no introduction. Whether your business is brick-and-mortar, an online store, or a mix of both, the two offer reliable solutions for accepting payments from anyone and anywhere.

But let’s take a closer look at both options, so you have a better understanding before making a decision on your payment processor. We'll also talk about Wise Business, which is a great way to accept and make payments internationally.

Looking for an safe and reliable international business account?

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Find what you're looking for here:

Square vs. PayPal: Card reader
Square vs. PayPal: Fees
Square vs. PayPal: International Payments
Square Business Account vs. PayPal Business Account
Bottom Line: Square vs. PayPal
PayPal vs. Square Frequently Asked Questions

Square vs. PayPal: Card reader

To start, both PayPal and Square offer card readers for in-store sales.

PayPal offers a card reader and also a terminal to process in-store payments. The cheapest option is the chip and swipe reader, PayPal Zettle. Zettle costs $29 for the first card reader and $79 for each additional one.¹ In addition, the PayPal Terminal costs $199. It's important to note that PayPal takes a fee per transaction of 2.29% + 0.09$.¹

With Square, you have many card reader options to choose from based on the needs of your customer base. For instance, you can get Square's lowest-tier card reader for free. You only pay for the costs per transaction: 2.6% + 0.10$.² Though this is a great option for entrepreneurs and new small businesses, you may want to get something that can take more payment types. The second generation Square Card Reader costs $59 and accepts contactless and chip card payments.² If you want to take a step up, they offer their Square Terminal at $299. ²

Comparing the Mid-Range Card Readers for Square and PayPal

To compare and contrast, we’ll look at the two mid-range options offered at a similar price: the Square Reader 2nd Generation and the PayPal Zettle.

Both of these mid-range options accept contactless and chip card payments. For magnetic stripe customers, Square users will need to use a small, backup swipe reader, which is free when you sign up. The magnetic strip option is also missing for PayPal Zettle, which might require that you keep a backup option for magstripe customers. In the past, they offered the PayPal Here reader that had the ability to accepts swipes. However, this option was recently discontinued.¹³

Both of Square and PayPal's mid-range readers will not work independently. Both devices require that you connect—via Bluetooth— to a smartphone or tablet that has their payment processing applications installed.

To take a payment, simply enter the amount or select a product from your preloaded product library and then select the card payment option. From there, the app will process the payment via Wi-Fi or over a phone network. If your internet is down, both services offer an offline mode, so you can take a payment and process it later.

Square vs PayPal: Fees

Square vs. PayPal: Fees

For processing fees, Square and PayPal have a lot of similarities. They both offer their services with $0 monthly fees and charge the same or similar transaction fees for online sales and swipe, chip, and keyed-in transactions.

The biggest differences in fees are with processing international payments and on chargebacks. For a breakdown of all the fees, let’s have a look at this table:

	Square Fees	PayPal Fees
Monthly fee	$0¹¹	$0⁸
Online transaction fee	2.9% + 30¢¹¹	2.59% - 3.09% + Fixed Fee, depending on payment type⁸
Currency conversion fee	Not available	Fixed fee per currency +, 4.00% currency conversion fee (or such other amount as may be disclosed to you during the transaction)⁸
Fees for swipe, contactless and chip transactions	2.6% + 10¢ ¹¹	2.29% + 9¢ ⁸
Fees for keyed-in transactions	3.5 % + 15¢¹¹	3.49% + 9¢ ⁸
International card fee	$0¹¹	1.5% ⁸
International payment fee	Fee Unavailable (However, it may be the same as Square's online transaction fee.) *Note that the POS is not recommended to use outside of the US and you can accept cards only with your Square app from international payers (US, Canada, Australia, Japan, the United Kingdom, Republic of Ireland, France and Spain¹⁴)	1.5% international card fee + fixed fee per currency + 4.00% currency conversion fee (or such other amount as may be disclosed to you during the transaction)⁸
Chargeback fee	$0⁶	Fixed fee according to currency ($20 for USD)⁸

Square vs. PayPal: International Payments

Currently, Square is available in the US, Canada, Australia, Japan, the United Kingdom, Republic of Ireland, France and Spain.¹⁴ However, your account and the currency in which you process payments is locked to the country where you open the account.⁴

Also, cross-border payments are not allowed—meaning you can process debit cards and credit cards from other countries when in your Square account’s active country, but you cannot take payments while traveling abroad.⁵ And Square has no fees associated with chargebacks.⁶

On the other hand, PayPal charges a fixed fee on chargebacks based on the currency—currently $20 in the US.⁷

With PayPal, you’re free to accept other currencies and process payments while traveling, but there’s a catch. PayPal charges a fixed fee per currency plus a 3-4% currency conversion fee, or another amount disclosed to you during the transaction.⁸ Those fees can really start to add up if you’re processing a lot of international payments.

Unless you're in a country where Square accepts international payments, you're stuck with PayPal. But, this may not be your best option! Find out how Wise Business compares to PayPal on International Fees:

The true cost of sending USD to GBP

Looking for a safe and reliable international business account?

Get a Wise Business account >>

Square Business Account vs. PayPal Business Account

Square and PayPal both offer business accounts. In this section, we'll give a short description of each one and include a list of the fees that you can expect after getting their accounts.

Square Business Checking Account

Before you can open a Square checking account, you’ll need to meet certain requirements. If you’re already selling on Square, you can get your business checking account immediately. On the other hand, if you don't have Square, you’ll have to join Square as a seller first. This is the primary obstacle to getting a Square account.

A large benefit of the Square checking account is that there are no monthly fees, minimum balance requirements, overdraft fees, or foreign transaction fees (However, International availability is still limited).

Another primary benefit of the Square business checking account is that you don’t get charged any fees for making instant transfers into it after getting paid via your Square POS.

You can only transfer earnings into US bank accounts and debit cards. This may mean that you want to get an international business account, such as Wise Business, to help you manage and move your money overseas.

Square Debit and Credit Cards:

Square offers a debit card to go with your business account at no additional cost.¹⁷ The Square credit card also has no fees.¹⁸

PayPal Business Account

PayPal for Business is a business payment solution designed for businesses of all sizes, especially small businesses. It's primary benefit is that you don't need to pay monthly fees, pay a fee to sign up, or maintain a monthly minimum account balance.¹⁶

Another benefitof PayPal Business is that it has a large presence in the payments market and can be used to accept payments online from a variety of sources.

A business account has a few features that you can take advantage of: ¹⁵

Operate under a company/group name
Accept payments from various sources and connect your account to various ecommerce providers
Expand access to your account to up to 200 employees
Access all other PayPal products

PayPal Business Debit and Credit Cards: ¹⁹

The PayPal Business Debit MasterCard has a number of fees. Let's go into the main ones:

Fee Type	Amount
ATM Withdrawal - US	$2.50 + Amounts charged by ATM Owner
ATM Withdrawal - International	$2.50, regardless of whether currency conversion fee is applied
International Transaction Fee	2.5% of the purchase amount from a non-US seller or 2.5% of the amount withdrawn from a foreign ATM. This fee applies even if there is already a currency conversion fee
Transfers to your PayPal Business Account	$3.74-$3.95 if you swipe your debit card at participating stores and add funds to your PayPal Business Balance. Fees may also be charged to your account, depending on the store

The PayPal debit card does offer 1% cashback on spending.²⁰

The PayPal Business Credit Card also offers cashback benefits: 3% cashback on all PayPal purchases and 2% cashback on everything else.²¹

Bottom Line: Square vs. PayPal

It’s hard to say which company is better. Square is very easy to use and has a lot of great features and integrations. Plus, their fees are very straightforward and transparent. But there’s the issue of establishing your business on the international market, and their fees on micropayments can be a dealbreaker if that’s the core of your business.

Ultimately, it depends on what you need the services for. If your business deals mainly in domestic transfers, there isn’t much difference between the two. For international cards, Square doesn’t charge a fee and PayPal does. At the same time, Square does have a low-cost business account that allows users to hold and spend money domestically all from one place.

PayPal, on the other hand, does accept international currencies which can help you expand your business. And their brand is globally recognized, which can put any security concerns about a transaction at ease and give your business clout.

However, international payments are not available with Square, except for a few select countries, and you can’t receive money in a different currency. And while PayPal does take other currencies, the fees can start to add up very quickly as shown in the table above.

PayPal vs. Square Frequently Asked Questions

Let's go into some of more frequently asked questions around PayPal vs. Square.

Are PayPal and Square competitors?

Yes! Though PayPal has an advantage on ecommerce with their international options, both companies offer card reading and online payment solutions built for small to mid-range businesses.

Does Square have a monthly fee?

No. Square only charges fees based on transactions. Their fees are transparent, and there are no monthly fees.¹¹

Is Square Pay Safe?

Square offers Square Secure with every account which offers fraud monitoring and fraud experts who will reach out if they see suspicious activity. Also, Square does not charge a chargeback fee when a customer disputes a charge.¹²

Is Square a legitimate company?

Square is a legitimate company offering secure payment processing services for businesses. They’re registered with the BBB and listed on the New York Stock Exchange with the symbol SQ.

Need to manage, send, or receive international payments? Try Wise

Square checking accounts let business owners manage their finances with ease and simplify payment processing. But, Wise Business can be a good option if they need to send payments across currencies. Since Square currently accepts payments from a limited set of countries, you may want to tap into Wise Business where you can operate your company in 40+ currencies.

Square customers can either connect their POS account directly to Wise or transfer funds from their Square Checking account into their Wise Business account.

Get local account details in up to 8+ currencies, such as USD, AUD, CAD, EUR, and GBP for a one-time fee
Get payments (non-wire) for free with local account details
Hold money in up to 40+ currencies and save on expenses with Wise’s transparent and low-cost fees
No monthly fees or minimum load requirement on the account

Open a free business
account with Wise >>

US account opening is free while other markets may vary

Sources:

All sources checked on 23 March 2024

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.