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Square VS PayPal

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Melissa Johnson

Melissa Johnson

Melissa Johnson has been writing about payment processing and mobile payments since 2014, and has been quoted in articles for Credit Karma and The Next Web, among others. She graduated from The University of Kansas in 2010 with bachelor's degrees in English and journalism.
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79 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Irwin Judson

    The presenter gave opinions clearly and honestly it seems.

    It is a shame he used some jargon in places (e.g. SDK and API) without explaining them, plus another category of online business I never have heard of, so I have no idea what he said in those components of his presentation.

    I have been using mobile Square for years. It is wonderful, but if you get lost you might as well take the client’s info by pen and paper and enter it later. Very difficult to recover quickly.

    I provided service to an American firm not knowing how, or even if, they intended to pay. I chose PayPal as I did not know my Square account would work for their method so I chose the more obviously “American” PayPal.

    PayPal has been a nightmare with whom to register our business, but since we haven’t done any transactions yet I don’t have an opinion so far on that.

    Considering the presentation and my experience so far with Square and PayPal, we will be shifting totally to Square.

    Thanks to the Merchant Maverick!

      Alex C

      We are a non-profit organization and accept payment via credit card. Currently using PayPal for online payment. Can we open an account with Square or PayPal for card-swipe payment ? Does PayPal have the offline service like Square ? Does either one have lower service charges/rates for non-profit organizations ?

        Jessica Dinsmore

        Hi there Alex,

        For in-person payments, there’s no discount with either Square or PayPal. PayPal offers a discount for online payments, but Square doesn’t. If you’re already using PayPal, I would recommend sticking with PayPal Here just to keep everything unified. However, that said, PayPal doesn’t have an offline mode like Square. PayPal is fractionally cheaper than Square, but you’d have to be processing several thousand dollars a month in person to see any sort of substantial saving.

          Luz

          Hi, I use square now, but I do not like the fact that you will receive a 1099 if you have 200 transactions in a single year. Does Paypal Here have a single year transaction limit? I do agree on the IRS reporting limits, just not the transactions limit. My business sells a lot of small items sales.

            Jessica Dinsmore

            Hi Luz,

            If you are processing 200 transactions AND at least $20k in sales per year, you should expect to get a 1099-k from either Square or Paypal. It appears to be pretty standard across the board, with the exception of Massachusetts and Vermont, who have a lower reporting threshold. That said, if you process 200 transactions, and don’t hit the $20k mark, you shouldn’t be receiving the 1099-k.

              Tonya

              I use square as my POS and paypal pro for online reservations for my tourism based company. I am thinking of switching to Square now for the online reservations to save myself the $30 a month from Paypal, however my question is does Square allow for pre-authorizing credit cards from online reservations without charging like Paypal? And if they do is there any fees?

                Jessica Dinsmore

                Hi Tonya!

                Interesting question! It looks the closest thing Square supports is pre-payment with Square Appointments. We don’t often say this, but you might actually be able to do this with Clover. You may want to look at getting Payment Depot or National Processing and get a Clover Flex or the Clover Mini and you could probably benefit from interchange-plus pricing.

                  boris borovsky

                  I’m And independent hairstylist. So essentially I rent a chair in the salon, And run on business. I have been using PayPal since already had it set up from doing business on eBay. But my question is i more specific Regarding my industry and fees.
                  Thank you

                    This comment refers to an earlier version of this post and may be outdated.

                    Jessica Dinsmore

                    Hi Boris,

                    Thanks so much for reaching out! If you want to send us an email with your specific question, we’ll do our best to answer it! You can reach us at service@merchantmaverick.com.

                      This comment refers to an earlier version of this post and may be outdated.

                      Julie Ketron

                      I’m a Independent Consultant for Pink Zebra. I’m currently using PayPal business. I’m not happy with the company. Was wondering should I switch to Square?

                        Cynthia Greene

                        I have a brick and mortar but would like to sell thru facebook using the email address. I am small so only using Square point of sale right now. Would my best option on facebook be to use paypal or square as payment. I know that in Square I can build my future website plus send free invoices but cannot pay with paypal. So thinking ahead but as for FACEBOOK which is my best option for the customer paypal or square using email ? Thank you.

                          This comment refers to an earlier version of this post and may be outdated.

                          Jessica Dinsmore

                          Hi Cynthia!

                          Thanks for your question. In order to manage a shop on Facebook you would have to choose either PayPal or Stripe — the alternative might be to use Facebook Messenger to send invoices for orders that are paid for in Square, but that would be difficult to manage logistically.

                          PayPal would probably be a workable option if you’d like to centralize things by selling online through Facebook and also sending invoices — but there’s a third option that perhaps you haven’t considered: Shopify.

                          With the Shopify Lite plan ($9/month), you get access to the mPOS, plus a Facebook shop and the ability to create “buy” buttons for a website, as well as send invoices. The only shortcoming would be that to work with barcode scanners, receipt printers, or cash drawers, you’d also have to pay for the Retail Package ($49/month). Otherwise you can send receipts via email or SMS, and just use a manual cash drawer. The good news is that if the online channel does take off and do well, upgrading to a full fledged Shopify plan will make selling online super easy. And, you can set Shopify up to accept PayPal payments as a secondary option to Shopify Payments. This would be our recommendation. Good luck!

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                            Ree

                            Starting a new side business where we will have sporadic transactions throughout the year however sometimes the transactions will be large orders (over 10k on one transaction for example). I’m looking for a processor, I fear our funds will be put on hold etc. since we’d be sporadic and at times, large amounts.

                            Is the best I can do is contact the merchant before the transaction occurs to let them know it is a legitimate charge? I was looking into merchant accounts (not aggregators) but didn’t want a lot of fee’s but am open to one that will go smoother for us all around. Thanks.

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                              Melissa Johnson

                              Hi, Ree!

                              Based on the criteria you’ve given me, I would suggest CDGcommerce or Payline Data as a merchant account provider for you. That’s absolutely the way to go to reduce your chance of a funding hold. I would also suggest looking at invoicing for the largest transactions rather than just swiping a card. You can check what invoicing services work with CDG and Payline when you talk to the sales team. They’ll also be able to advise you on the best ways to mitigate your risk given your situation.

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                                Josie

                                I’m just starting off as a book seller and plan to sell to both individuals and schools (both on my online website store and in person). I’ve seen concerns regarding funds held by both Square & PayPal for unusual volume. Would Square or PayPal – or a merchant account be best to avoid “a hold” on my funds as a startup business?

                                Also – which ecommerce tool is best for selling to nonprofits (i.e., schools)?

                                Thank you for such an informative article and great comment page!

                                  This comment refers to an earlier version of this post and may be outdated.

                                  Melissa Johnson

                                  Hi, Josie!

                                  Generally speaking, merchant account are always going to be more secure than a third-party processor such as Square or PayPal. However, it’s a matter of trade-offs: merchant accounts are more secure but they are usually only cost effective when you’re dealing with about $10k per month in credit card transactions. Below that and PayPal and Square tend to be more affordable, and some merchant accounts won’t approve you at all. You also have to jump through fewer hoops to get an account set up with PayPal or Square. And for context: PayPal has 17 million merchants and Square has well over 2 million. So the complaints about holds are valid, but I don’t think account issues happen as frequently as people imagine them to, just based on complaint volume. You have to look at the overall user base, too.

                                  I think that using invoices would help protect you for large orders. Square actually has some really cool tools for uploading contracts to your invoices. However, that’s not a perfect solution. One of the reasons transactions get flagged and held is a very sudden, very large sudden spike in business. Steady growth over time will actually help off set this, but if you’re selling 10 books a month and suddenly you get a single order for 1,000 books, that might signal that something is wrong and lead your processor to hold funds.

                                  As for ecommerce tools: it doesn’t really matter who you’re selling to. So there really aren’t any tools or services that are designed to help you sell to nonprofits and schools. Just make sure you have a well designed site with all of the relevant details and information. You might put up a notice and tell them that bulk orders are available by invoice or something. (It’s hard to be specific without any other details about your business.)

                                  So it really comes down to priorities. Can you afford monthly fees for a merchant account? If you can get a merchant account, are the costs comparable to Square or PayPal, or will you pay more? Is that acceptable to you? Do you want tools like Square, which offers a free website and built-in invoicing plus a mobile POS? Or would you rather pick a merchant account and then pick your website provider and your invoicing tool? (Also worth noting, some merchant accounts offer a unified platform like Square’s with all the tools built in).

                                  I know it’s not a definitive answer, but I do hope this helps you get started!

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                                    Steven Berger

                                    Hello

                                    I’m starting my credit repair business and I planning on having a website. I would like your input on which merchant service would be the best. I will have a monthly recurring fee. Thank you!

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                                      Jessica Dinsmore

                                      Hi Steven,

                                      It looks like you may need a high risk merchant account, actually. Square bans credit repair businesses and Paypal bans “certain types” of credit repair businesses. Stripe isn’t an option either. I’d suggest reading through this post on high risk providers to find some suitable options. You can also give our filtering tool a try for a more tailored recommendation. I know this probably isn’t the news you were hoping for, but I hope you find it to be helpful. Best of luck to you!

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                                        Joan Scott

                                        Hi Melissa
                                        I am a crafter and sell my wares at various craft shows. People have asked me to start taking credit cards and I would like to do that. A friend advise me that PayPal gives direct funding immediately and the square takes a couple days. I prefer the PayPal but I’m not really sure how to go about doing this. I don’t have a PayPal credit card but I do have a PayPal account with my credit card linked to it. How does this work?

                                        Joan

                                          This comment refers to an earlier version of this post and may be outdated.

                                          Melissa Johnson

                                          Hi, Joan!

                                          Honestly, either solution will work for you, though in my experience more artists seem to prefer Square. Square also has slightly more inventory management and invoicing features that you might find useful as a crafter!

                                          PayPal offers “immediate” funding in that it’s available in your PayPal balance almost right away. It’s not in your bank account. However, if you have the PayPal for Business debit card, you can spend your PayPal balance anywhere that accepts MasterCard/debit cards. In addition, you can instantly transfer your balance from your PayPal account to your bank account for $0.25 per transfer.

                                          Square generally takes 1-2 business days depending on the time of day when the transaction is processed (there’s a cutoff time, which is fairly standard for most businesses). If you want your money right away, you can initiate an instant deposit for 1% of the transaction value. However, there are limits (minimum and maximum amount and more stringent limits for new sellers).

                                          If you go the PayPal route, you’ll need to make sure you get a Business account to use PayPal here, not just a personal account. Upgrading is easy, but you should make sure you upgrade and get everything with PayPal Here squared away well ahead of your next show. Likewise, make sure you apply for a Square account up front and early, too!

                                          Also, when you start accepting credit cards, please make sure you opt for an EMV/chip card reader! It’s really important that every merchant be able to accept chip cards to protect themselves against fraudulent transactions.

                                          I hope this helps!

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                                            Glenda Hance

                                            Hi,
                                            We are planning our 30 year class reunion this year. I would like to know which option Square or PayPal, would be best for people to pay online? I’ve researched both, and to me Square would be the BEST choice, but would love your input. Thanks in advance.

                                              This comment refers to an earlier version of this post and may be outdated.

                                              Melissa Johnson

                                              Hi, Glenda!

                                              I think in your case, both PayPal and Square would be really good options. As far as online payment options, they’re pretty evenly matched. It really depends on how you want to set things up. Do you already have a website? Do you need to build one? (Square has a free website that you could use, though the design options are pretty limited. With PayPal, you’d have to set up your own site, which is pretty easy with software like Weebly.) Would you rather direct people to something informal such as paypal.me or cash.me to send their money, or do you need something that’s a bit more structured where they purchase official tickets? Do you want people to be able to make donations in addition to buying tickets? (PayPal might be the better option for donations because creating donate buttons is very easy.) In both cases you can get a card reader to accept card payments at the door, too.

                                              I know this isn’t much of an answer, but there are so many variables that it’s hard to say definitively without knowing all the details!

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                                                Rach

                                                Hi there, I am starting a dress hire business and at this stage I don’t have any clue when it comes to payment processing. I’ve just download your free email course to get me started. Thank you.
                                                I will have 2 options where the customer can view and try on and pay and also and an online hire service where customer will view the garment via Instagram and direct message me with their inquiries and if happy to proceed I send the garment via postage. Can you please reccomend your preference please in this situation. Also I need to take a copy of credit card details just in case the garment is late or damaged. What is the best way to do this?
                                                Thank you in advance 😉

                                                  This comment refers to an earlier version of this post and may be outdated.

                                                  Melissa Johnson

                                                  Hi, Rachael!

                                                  I’m sorry to say I don’t have an easy answer for you because the type of business you’re describing faces several kinds of risks. In an ideal world, a processor that supports pre-authorization and capture would work. But most processors, including PayPal, have a limited time frame for those pre-auths and place limits on how much you can increase the transaction size beyond the initial amount. Square does offer invoicing and card on file capabilities, which could work — but generally speaking, charging customers for additional amounts without their authorization can get your account terminated. So you’d be facing possible lost income. Square doesn’t support pre-authorizations for anything except its Appointments software, either.

                                                  This is one of those cases where I think your best bet is to talk to a few processors directly and see what they recommend and whether they’ll support your business model. Square, obviously, would be a good start. Helcim and CDGCommerce are also worth looking into!

                                                  At the very least, I also recommend having an actual webstore, not just Instagram. This will help you with appearing legitimate, both to customers and to processors. There’s nothing that says you can’t also post to Instagram to attract customers! You’ll also want to make sure you have a very strong contract prepared that outlines the costs and fees and penalties, and make sure your customers read and sign it when you complete a transaction.

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                                                    Rachael

                                                    Thankyou Melissa, you have given me much to think about. ;-)))

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                                                      Deanna

                                                      Not really a review but more of questions!

                                                      I am in DS. Usually all of my online sales are thru PayPal by invoicing. I however have 2 customers that buy from me that don’t have an email so I take their card info and manually type it into square. I don’t mind the wait to be put into my account usually 24 hours! I just recently learned about PayPal having a free reader. Since I really don’t use it I was thinking about switching to the PayPal reader that way it is just put on my business card. But since I plan to start doing events to get my business out there now I’m not so sure if I should stay with square or go with paypal. Right now my card reader does not do even close to $500. Because like I said most of my sales are thru PayPal invoicing. So guess my question is which would be better for me?

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                                                        Jessica Dinsmore

                                                        Hi there!

                                                        I think it would be smart to condense your payment processing into one service. Both Square and PayPal offer invoicing and a free card reader (but you should get an EMV reader; it’s worth the extra cost). The one thing to consider is that if you’re going to continue relying on a virtual terminal for customers who don’t have emails, Square is actually a better option. Its virtual terminal is free. PayPal has one, but it costs $30/month, which is absolutely not worth it for you. Square gives you Card on File and recurring invoicing options and no additional charge, which I think would be to your benefit!

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                                                          Bill Schmidt

                                                          My wife and I own a vacation rental business in the Caribbean and we typically use Paypal for invoicing and taking credit cards for guests. Recently we started also taking reservations and transactions for cabs, cooking services, etc… a whole host of additional services which we offer as part of the whole experience. Our guests want to pay at the time the services are provided… which means on the Caribbean island while they are there. We do allow then to establish a line of credit before hand to be settled at the time of their stay, but it is more convenient to be able to take credit card transactions on the island. Getting this to work has been very problematic as the local banks in the Caribbean wont even talk to us unless we provide some minimum amount of business. Our experience is that Paypal and Square do not work outside of the USA… so where to go from here?

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                                                            Jessica Dinsmore

                                                            Hi Bill,

                                                            Unfortunately there is no quick and easy fix that we are aware of. We agree that the way you are currently handling payments is probably the best method for your situation. Best of luck to you!

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                                                              Debbie

                                                              Question: we are a small company, using credit card payments from customers only 1 or 2x a month (the rest we receive by checks).

                                                              I was told we could just process Square inbound payments using a computer–no other hardware needed. Is that true? I have gone directly to Square to ask but via phone their system only allows existing customers with codes!

                                                                This comment refers to an earlier version of this post and may be outdated.

                                                                Jessica Dinsmore

                                                                Hi Debbie,

                                                                I think what you are looking for is Square’s virtual terminal. You may also want to check out their invoice feature as well. I hope that helps!

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                                                                  ariella Ingraffia

                                                                  I’m in a service field and really there’s just a couple of people every month who forget their checkbook or cash so I wouldn’t really be using a credit card reader for much maybe 500 a month do you think Square is still the best for me

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                                                                    Jessica Dinsmore

                                                                    Hi Ariella,

                                                                    Yes, it sounds like Square would be a great option for you!

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                                                                      Nette

                                                                      Melissa,
                                                                      Thanks very much for sharing your time and insights!
                                                                      Divine Blessings,
                                                                      Linette

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                                                                        Jimmy

                                                                        I had a Square but terrible customer support. After using Square for a year it one day would not allow me to log on. Said email address was wrong. Tried contacting customer support but support is not available without email address, which I had not changed but Square did not recognize. Tried ordering replacement but got message that my email was already linked to a device. Catch 22. There is no support!

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                                                                          Nathan

                                                                          Excellent write-up Melissa, yet I still find myself on the fence in knowing what is the “best combination” of applications to support my needs; i.e. mPOS paired with best accounting/book keeping SW plug-ins.

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                                                                            Trevor

                                                                            Thanks for the helpful and thorough review!

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                                                                              Brian Powers

                                                                              Square’s register function does not have a calculator function, ie. I want to sell 2.5 yards of fabric at 12.99 per yard. I have to do the calculation separately then enter it. Paypal allows me to do the calculation in the register. Is there any workaround to the Square register to allow me to do this? Customer support for the last 1 1/2 years has said, “this is a good idea, and we’ll look at it,” and of course, they haven’t.

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                                                                                Melissa Johnson

                                                                                Hi, Brian!

                                                                                I’ve got a couple of suggestions. This is a topic that’s actually come up in Square’s community seller forum, and something other users suggested is price points: you can pre-program the costs for particular lengths (1/8, 1/4, 1/2, 1) and then just plug in the quantities until you get the right measurement.

                                                                                https://www.sellercommunity.com/t5/Using-Square/I-sell-fabric-is-there-a-way-after-scanning-bolt-to-choose-1-2/m-p/13158

                                                                                Square also has variable price points — which might work if you’re looking to keep sales records and don’t mind plugging in the cost manually still.

                                                                                https://squareup.com/help/us/en/article/5328-item-variants-or-price-points

                                                                                I hope that helps! IT would be nice to see Square add pricing by weight or yard in the future though, for certain.

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                                                                                  Courtney Hulsey

                                                                                  I’ve been using paypal for several months and was really happy until PayPal started holding over $500 in “Rolling Reserve.” My business is small, and new. $500, right now, can make or break a month for me. Does the Square do anything like that: hold your money, that clients have already paid, in a reserve for 30, 60, or 90 days?

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                                                                                    Jessica Dinsmore

                                                                                    Hi Courtney,
                                                                                    You might want to check out the “Account stability issues/funding holds” section in our review of Square. Unfortunately Square has been known to put holds on funds as well. If you want to shop around, we have compared a handful of top rated mobile payment companies here with links to each of their reviews for further reading.

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                                                                                      Charlie

                                                                                      I have the card reader from square and never got the one from paypal however is like to go through paypal. Can I use the square reader with the paypal app?

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                                                                                        Chloe Bahal

                                                                                        Hi Charlie,

                                                                                        Unfortunately the card readers are not interchangeable, so you won’t be able to use the Square reader with Paypal Here.

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                                                                                          melissa

                                                                                          Up until today I’ve been very happy with Square. I use Square for on-site purchases when customers come to my studio and also for custom orders, I send out a Square invoice. My website uses PayPal and I have never had an issue. My biggest frustration with Square was this morning when my password didn’t work – the same password that I’ve had for three years. I finally requested a reset and the verification code they sent didn’t work. And yes, I began to freak out because there is literally NO WAY to contact Square if you can’t access your account. They require that you ‘log in’ to contact them – well how do you log in if your password isn’t working??? The fact that Square’s customer service can’t be accessed if your account goes down is just plain bad business. I spent most of the morning trying to resolve this and finally after the third verification code I was able to access my account. But this has caused me serious concern over continuing to use Square.

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                                                                                            IVy

                                                                                            I just signed up for Square, im still hesitating with Square and paypal.

                                                                                            When I received Square payment does it go directly to my bank account?

                                                                                            For Paypal. If I invoice my clients I can accumulate it thru paypal and transfer the balance to my bank account?

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                                                                                              Chloe Bahal

                                                                                              Hi Ivy,

                                                                                              Great questions. Yes, when you sign up with Square, you will have the opportunity to sync your bank account. For PayPal, yes, you can transfer the balance to your bank account once your clients pay you. I hope this helps.

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                                                                                                Michael Keller

                                                                                                Hey so, with “square,” am I able to capture payment remotely? I’m working in e-commerce, and can go door to door for my marketing services today, but I would like to be able to live anywhere in the world and travel, so is it possible to type in payment through square, if they send their information?

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                                                                                                  Chloe Bahal

                                                                                                  Hi Michael,

                                                                                                  Yes, you will be able to accept card-not-present transactions but the transaction fee is going to be higher. I hope this helps and if you have further questions please let me know.

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                                                                                                    Kim

                                                                                                    I was told that customers cannot securely key in their own credit card information using Square. I want to be able to email my customers an invoice and allow them to pay online….and then receive an email when the payment has been made. This can be done using PayPal but can it be done using Square?

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                                                                                                      Chloe Bahal

                                                                                                      Hi Kim,

                                                                                                      You can send invoices with Square. Here is more information on how to do that. I hope this helps and if you have further questions please let me know.

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                                                                                                        Jorge O

                                                                                                        After what I just went through in the last couple of days with Pay Pal I will forever discourage people to get PayPal and go with square. I run my own PC repair/support business…I was approved, having already been with PayPal almost ten years I thought it the best way to go…well listen up…. My first three transactions were with typing in the credit card, since I usually work from home, and of course, their cc reader hadn’t arrived… What was that for???!! , after your first $500 PayPal actually holds the amount for 30 days or more. I called the representative and I was like “well I’ve had PayPal for years so what’s the problem” they proceeded to tell me “that’s how it works until you develop better selling habits??” I run a computer help and repair, where I remote into my clients servers, or PCs and fix the problem, so accepting a credit card payment over the phone shouldn’t be a biggy?? Right?? Wring! So basically I did two days or about $1,500 worth of of work, they gave me the first $500 and the other $1,000 is in there or in my pending balance for the next 30 days, just because I typed in the credit card. Mind you I sent them the receipts for the transactions. This is incredible, and a joke. I think it’s horrible 30 days?? This day and age maybe 2 or 3 days for it to clear, I can even do seven for it to clear with the bank but really 30 days???smfh Square took me through a two day process and after sending them my ID and a copy of my receipts everything went smoothly. It goes into my bank account after a day or so, or I can choose to have it immediately sent to my account for a 1% fee. The choice is clear. Hope you don’t babe l make same mistake.

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                                                                                                          Keira

                                                                                                          I just went through the same thing Jorge, and was looking for feedback about switching from PayPal to Square. Does anyone know if Square does the same thing? I had no idea PayPal would hold my funds for 30 days from a $500 transaction. The other issue I’ve had with PayPal, that I’m hoping Square doesn’t do, is the ONE time I did the manual key in, it held my funds then too.

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                                                                                                            Melissa Johnson

                                                                                                            Keira, you’re very likely to see similar behavior from Square. They are both third-party processing services, meaning that instead of you having your own unique merchant account (which is what traditional processors used), all accounts are lumped (or aggregated) into one large account shared by everyone.

                                                                                                            On the plus side, it means you don’t have to do much to create an account and start processing. However, because the fraud/underwriting departments don’t do much research or assessment if you or your business model, they’re a lot more finicky about holding funds for transactions. We unfortunately don’t have any information about exactly what criteria either company uses to identify problematic transactions, but manually entering large transactions is usually enough to create a red flag. Likewise, sudden large transactions can raise suspicions — particularly when you’ve got very little processing history or you’ve only processed small transactions until that point.

                                                                                                            Depending on what industry you work in, sometimes it’s better to get a high-risk merchant account. And no matter what industry, use invoices or the virtual terminal features instead of keying transactions into the mPOS app if you can.

                                                                                                            Hope this helps!

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                                                                                                              Ana Castillo

                                                                                                              Excellent review for Square vs. Paypal! One thing u left out. U didn’t explain if the device used such as the little square reader can be used for either or. I’m looking to purchase a physical square reader but if I use the app for PayPal will it still work even if I’m using the square device and the app. Is there such a thing?

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                                                                                                                deanna

                                                                                                                found your article, thanks for the info. however i don’t know when this changed but the paypal reader is no longer free. The reader is 14.99 and they also have a chip card reader for a whopping 149.00

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                                                                                                                  Mark

                                                                                                                  NOT happy with PayPal. If I sell over $500.00 in a given week, they hold my funds for 30 days. I called and they said they couldn’t do anything about it. Has anyone else had an issue with this? I’m thinking of changing to Square.

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                                                                                                                    David

                                                                                                                    I have used Paypal for years now and have been fairly happy with them until recently. Paypal does have easy to reach customer service which is nice but the problem is the person your reaching isn’t much help. The Paypal staff seems to be very clueless and confused about their own pollicies. With my experience with Paypal I’ve learned its more of a company for Buyers not Sellers. There are many strange policies Paypal go by. For instance just recently I sold an item on Etsy. It was a custom made custom ordered item specificly built just for this customer. On the Etsy listing we quote 3 weeks for delivery. We did our part we built the item, shipped it, and had good comunication with the customer all within the quoted time frame. For some reason at the very last minute as the item was still in transit the customer chose to cancel the item. Which of course we don’t offer cancelations on custom built items. The customer filed a claim on Paypal because they did not want it anymore. When the item arrived the customer refused delivery. By doing so it basicly is like the customer never recieved the item and we never shipped it in the eyes of Paypal. Even though we had proof it was there but customer said they did’nt want it. Because of that refusal to accept the package Paypal sides with the customer and refunds their money. We’re out time to build the item, money for materials, and shipping fee to ship the item…. Now stuck with a custom built sign with a long unusual last name carved into it that we will Never get rid of. Paypal customer service Rep called it a loop hole in their system. I have encountered many strange situations similar to this from Paypal. Now I dont know what Square would do in that situation but I would hope they would not allow a last second cancelation like this to happen to their seller becuase of a loop hole in the system. Paypal just is more of Buyer favored site.

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                                                                                                                      Cheyanne

                                                                                                                      David,

                                                                                                                      I could not agree with you more. A customer of mine also filed a chargeback under the false claim that he never authorized my company to charge his card. I sent the proof to PayPal as requested. (Email correspondence between the client and I who give his authorization and permission) The representative at PayPal informed me that I had nothing to worry about because I had the correct documents as proof. About 3 days ago, I saw the money withdrawn from my PayPal balance! When I called customer service they informed me that the client’s bank decided to issue him a refund so they had to deduct the money from me.

                                                                                                                      I was so angry because I have to suffer for this. Even though I provided all documents requested – PayPal refused to cover my loss. They don’t care about small businesses! It’s such a shame that I’ve given them so much money to be treated like this! Not to mention they even threw on a $20 chargeback fee on my account as well.

                                                                                                                      I have moved to Sqaure. I do hope it will be better with this Merchant.

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                                                                                                                        Lidia Kenig-Scher

                                                                                                                        Indeed a great article. I have been using Paypal for years, and I find the company easy to use and available on the phone when needed. My only complaint is actually their card readers. The little triangle stinks! I have to swipe several times some times, which is useless. I usually bring 2 or 3 to my sales. I’ve seen people use the square reader and it seems like a breeze. The delay in depositing is not so good, but I plan for it.

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                                                                                                                          Alex

                                                                                                                          I have been using PayPal Here for several months and wanted to switch to Square for a more robust POS. I called to sign up with Square and when I said my average transaction would be less than $10, they said transaction fees would be 2.75% + $0.15 per transaction. Is this the same for every quick-serv merchant that has smaller transactions?

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                                                                                                                            Melissa Johnson

                                                                                                                            Hi, Alex!

                                                                                                                            Unfortunately, yes. as far as mobile/pay-as-you-go options are concerned, PayPal is the only one that offers a micro-transaction pricing option. 2.7%-2.9% is pretty much standard across the board. A few places might have marginally lower rates (check out Intuit GoPayment or Spark Pay, for example) but they aren’t as robust as far as the app goes.

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                                                                                                                              Alex

                                                                                                                              Thanks for the prompt reply. Square’s biggest draw is that 2.75% flat fee and I can’t find anywhere that outlines the additional .15 per transaction other than what the sales rep said. If you sign up online do they freeze your account or change pricing once they see what your sales transactions are?

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                                                                                                                                Megan Erickson

                                                                                                                                My mom is going to start a website and Facebook page for her crafts. She sells homemade crafts (such as these cute trendy banners for weddings, showers, parties, home decor, etc.) mostly to local people and meets them and they pay with cash. However, she is looking to expand her business to having it online and having people purchase her products with a debit/credit card. She wants to know which is most safe for her to use? Thanks, if you can help!

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                                                                                                                                  Chloe Bahal

                                                                                                                                  Hi Megan,

                                                                                                                                  I would recommend taking a look at Square.

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                                                                                                                                    Denise Smith

                                                                                                                                    I’ve used PayPal for years and have recommended it to several entrepreneurs. Paypal does have a debit card which , merchants can use to access money immediately. The card is accepted by most companies that accept Mastercard, although I have run across some companies who don’t accept it. However I have now decided to use square for two reasons. Reason one the new Emv reader and lower cost, reason two direct deposit to my bank. Since I haven’t used square long I can’t say whether I prefer it or not.But for right now I’m going to continue to have paypal on my website and use square for in person sales.

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                                                                                                                                      Sharon Bennett

                                                                                                                                      With Square can customers purchase online from my website?

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                                                                                                                                        Chloe Bahal

                                                                                                                                        Hi Sharon,
                                                                                                                                        Yes, your customers should be able to purchase online. Here is more information on how you can integrate online purchasing with Square.

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                                                                                                                                          Teresa

                                                                                                                                          Not sure if you mentioned it, but I have the PayPal Here with the (free) debit card, and not only is their swipe rat a tiny bit lower than square’s, but they give you 1% back on what you spend each month, too. 🙂 So, in reality, your swipe rate lowers.

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                                                                                                                                            Billy Bob

                                                                                                                                            Only Paypal has a Windows Phone app (as of early 2016). Yes, some of us still use Windows Phones. I don’t want to carry a separate phone just to swipe credit cards.

                                                                                                                                            If Square had a Windows Phone app I would use them over Paypal. I don’t like having to “manually” transfer funds from Paypal to my bank. (Square deposits directly into my bank automatically). But no Windows Phone app. Nothing is ever perfect, is it?

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                                                                                                                                              Teresa

                                                                                                                                              I’m pretty sure you can link your PayPal account to your bank account and/or debit… Although, the easiest thing to do is just have PayPal send you a debit card. It is definitely worth it. 😉

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                                                                                                                                                Perry Strength

                                                                                                                                                What about a security comparison? Square boast PCI Compliance, whereas PayPal Here is silent on the issue.

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                                                                                                                                                  Shane

                                                                                                                                                  I will be moving to square. Two big points with square is the ability to track inventory with their system and the automatic transfer to your bank account. I am sure their customer support will become better as more people start using them.

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                                                                                                                                                    Lucine

                                                                                                                                                    Thank you so much for the comparison. It’s very helpful.

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                                                                                                                                                      cecilia

                                                                                                                                                      Thank you for sharing the insight! I was just wondering which credit card reader to get, to get ready for my upcoming sales events at major dance studios! The last thing I want is hearing potential customers saying ‘ oops I don’t have any cash’, and watching them walk away…
                                                                                                                                                      Personally I think that, if you’re just starting out, have a small transaction volume, then you really can’t lose choosing one over another.

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                                                                                                                                                        katie

                                                                                                                                                        Great article. Very helpful. So if I’m reading it write; the only real downside to Paypal is the $25 chargeback fee.

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                                                                                                                                                          John

                                                                                                                                                          I’ve been using PayPal for almost 10 years, and frankly I’m delighted to move to Square. PayPal is painful to deal with. They withhold funds if the wind changes direction, and are quick to take take funds from your account. The biggest drawback that hasn’t even been mentioned in this review is that PayPal is effectively its own bank. If you want to use your funds, you might have to move them to your bank, which takes up to 4 days. Square deposits money directly to your bank account, which I find way more convenient.

                                                                                                                                                          I’m thrilled to have a realistic contract-free alternative to PayPal!

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                                                                                                                                                            Lois

                                                                                                                                                            This was a great article. I’m just starting my first retail business and am trying to figure out which way to go.

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                                                                                                                                                              Holly Le

                                                                                                                                                              This is a great article and it helped me narrow down my decision of which credit card reader to use for my organic bodycare biz, small biz since we just started a couple months ago.! Thank you for posting 🙂

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                                                                                                                                                                Amad Ebrahimi

                                                                                                                                                                Anytime Holly! Glad to help. 🙂

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