Square vs. PayPal Here
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The mobile payments space has undergone a major transformation in the past few years. Small contenders have come and gone, new names have emerged. But it feels like the big names — such as Square and PayPal Here — have gotten bigger.
Square (see our review) has been a giant in the mobile payment processing since its inception in 2009. Claiming an estimated 2 million merchants, Square has made it possible for anyone to accept credit card payments and grow their business with a dazzling and ever-growing suite of tools and apps. PayPal is a behemoth in all forms of commerce, and it’s dominated the online payments space in particular, with about 8 million PayPal for Business users. In 2012, it ventured into mobile payments with the PayPal Here app (see our review), which works with the rest of the PayPal Suite.
When you compare Square vs PayPal Here, you’ll see that have a hefty share of the mobile payment market and instant recognizability for consumers. They also have many similar offerings. To make a potentially long story short, Square has earned a 4.5-star rating for the sheer value it provides, while PayPal has earned a respectable 4 stars. However, depending on what capabilities you need, either could be a great choice.
Table of Contents
Products and Services:
Square and PayPal Here are both mobile Point of Sale (mPOS) services, requiring just a cell phone or tablet to accept credit cards. They’re great for merchants at conventions and trade shows, street vendors, repair businesses, professional services, restaurants and retail boutiques… Basically anywhere that you may not have an actual register, or don’t need a large, complicated POS system, either service will give you what you need.
As far as core features are concerned, you’re going to get the same experience from both. That includes:
- Accept all forms of credit
- Keyed transaction support
- Record cash transactions
- Issue full and partial refunds
- Apply Discounts
- Item library with product descriptions, images, and variants
- Barcodes and SKUs
- Receipt printing
- Receipts via email/SMS
- Cash drawer support
That said, Square’s app is very nearly a full-fledged POS, and it offers several additional services free of charge — inventory management with counts and low-stock alerts and a virtual terminal for example. You can add services such as employee management and customer loyalty, to. Not only that, but everything synchronizes seamlessly in the Square Dashboard. If you want the freedom to create a register setup and use the same app for your mobile sales, you can do that with Square almost effortlessly.
There’s just one shortcoming: Square has put a lot of effort into its eCommerce offerings of late, but it’s still not the most robust option out there. If your online sales are as important to you as your mobile sales, PayPal might be the better option for you.
If you want add-ons, PayPal Here isn’t nearly as robust as Square. Its inventory features are more limited (there’s no count except with an add-on service). and most notably, PayPal Here’s item library doesn’t sync with the rest of your PayPal setup. There’s no offline mode, a fact that continues to dismay me.
However, Paypal’s eCommerce capabilities are easily the best on the market. If selling online as well as on mobile devices is a priority for you, you shouldn’t overlook the value and compatibility PayPal offers.
In the end, if you’re just looking at mobile, I think these solutions are pretty well matched, but Square can do just a bit more, and that’s why it ultimately comes out on top. If you want to take either solution to a counter top, Square still offers more functionality — but if you’re selling online as well, PayPal has a distinct advantage. I think it’s important when choosing an mPOS you look at your technical needs as well as how the app of your choosing fits into the rest of your business. Omni-channel solutions are becoming far more common and they can be a very effective way to manage payment processing and orders across all these different channels.
For a mobile setup, really, all you need is a compatible smartphone or tablet and a credit card reader. You can send your customers digital receipts from either PayPal Here or Square. But if you want a full-fledged register, you can have that, too — that means receipt printer, cash drawer, the whole shebang.
Supported Phones and Tablets:
Both PayPal Here and Square are designed to work on Android and iOS devices — tablets and smartphones. However, you’ll get maximum capabilities out of Square if you’re running an iPad. On the other hand, PayPal Here supports a small assortment of Windows devices as well. You’ve got a fairly large list of supported devices on both, and few compatibility issues on either part.
Supported Card Readers:
You can still get a free magstripe reader from PayPal Here and Square for signing up. However, at this point it’s very prudent for you to get an EMV (chip card) reader. They aren’t free, but it will remove a huge liability from your business.
PayPal’s only other carder reader option, its EMV reader, is my favorite device on the market right now: The Miura M010. It’s a Bluetooth-enabled all-in-one reader (meaning it supports EMV, NFC/contactless and magstripe). Not only that but it’s fairly comfortable to hold in your hand. you can even get a cradle with built in charger for a countertop setup. Check out all the reasons I like it in my unboxing review.
Square has a larger assortment of devices to choose from. There’s a headphone jack EMV/magstripe reader as well as its Contactless + Chip Card reader, which supports NFC and EMV but not magstripe transactions. It also has a dock but it isn’t exactly friendly to handheld use. You can also get the Miura M010 for Square. however, whereas PayPal’s version supports both Android and iOS, Square’s only works with iOS. See how Square’s hardware stacks up against other options.
As far as price, that’ll be something you’ll have to decide for yourself. PayPal’s reader retails for $79.99, while Square offers it’s contactless + chip card reader for $49.
As I’ve already said, I definitely prefer the Miura M010. I think it has a better design and is more versatile. But Square wins out in this category simply because it has a larger array of options at more cost-effective price points.
Other Supported Hardware:
PayPal Here and Square both accommodate a variety of receipt printers, cash drawers, even barcode scanners. And depending on what you need, you can get a pre-assembled bundle of hardware directly through Square or through POS Portal for PayPal Here. You’ll save over buying each item individually, but prices vary depending on what equipment you want. There’s no doubt in my mind that Square has the better assortment — but do you need one? If you just need mobile processing, probably not. A smart device and a card reader will be more than sufficient.
In all, I appreciate the beauty of PayPal’s simplicity, whereas you might find yourself bewildered over the Square options, but the more affordable hardware and greater selection of pre-designed bundles are nice.
Fees and Rates:
While the cost of hardware is notably different, Square and PayPal Here do offer similar prices for credit card processing. Neither service charges any regular fees beyond those incurred per transaction, though with both you can opt for add-on services. If you’re just running the app and maybe eCommerce, you might save a tiny tiny fraction with PayPal Here, but 0.05% is a very tiny amount at this scale, and you should consider other factors.
Here’s what you’ll pay:
|Manual Key-In||3.5% + $0.15||3.5% + $0.15|
|International Cards||Add 1% to fees||Keyed Rates|
|Invoicing||2.9% + $0.30||2.9% + $0.30|
|Virtual Terminal Rates||3.1% + $0.15||3.5% + $0.15|
That’s some pretty fair pricing, and the lack of a per-transaction fee for swipes makes it favorable to low-volume businesses.
If you want more from your mPOS, here are some additional options:
- Hosted Payment Page and Virtual Terminal: $30/month
- Recurring Billing: $10/month
- Advanced inventory through Shopventory: $25/month
- Appointment Booking: Starting at $30/month
- Loyalty: $25/month/location
- Virtual Terminal: No monthly fee
- Recurring Billing/Card on File: 3.5% + $0.15 per transaction
- Advanced Inventory through Shopventory: $25/month
The main advantage to PayPal is how quickly your money is available: Any mobile payments you accept are available almost instantly in your PayPal account. That means if you have the PayPal debit card, you can spend your money right away.
Square sends its payments to your bank account within 1-2 business days, depending on when the payment was processed. Payments taken before 5 p.m. Pacific time are available the next business day; payments made after 5 p.m. Pacific time are available the second business day. However, you can also initiate an Instant Deposit for 1% of the transferred sum.
However, if you don’t have the PayPal debit card, or you prefer to route all your funds to your bank account, Square has the advantage. An ACH transfer from PayPal to your bank will take 3-4 days, which could be an issue for some merchants.
I honestly feel like this is a draw, especially if you’re only interested in the mPOS.
Their pricing for their core features — the mPOS and eCommerce suites — are virtually identical. And of course, let’s not overlook how fast you have access to your funds — with PayPal it’s almost instant. You can get your funds right away with Square for a slight fee. But recurring billing or a virtual terminal will cost you significantly more with PayPal. That marginally lower rate won’t actually save you money until you start processing $10k in just virtual terminal transactions.
As always, we encourage you to do the math yourself based on your own processing history and business needs. That is the only way to see whether the costs are justifiable.
Contract Length and Early Termination Fee:
One of the advantages to both Square and PayPal Here is that there’s no contract, no monthly fees, no termination fees. If you don’t like the service, just stop using it and find another one. You can’t get a better deal than that.
Sales and Advertising Transparency:
In general, both Square and PayPal Here deliver what they offer: an effective mobile payment solution with up-front pricing and no hidden fees.
That said, both services could spell out some policies out more clearly, a topic we touched on in our reviews of Square and PayPal Here. The holds are a point of contention for merchants, who understandably want their money as soon as possible. There are no standard limits, though it seems larger than average transactions can trigger reviews of an account.
You’ll find both PayPal and Square have active social media and social media support channels too. I would expect no less from these two companies. But I think Square is putting out a lot more content to help merchants get the most from their Square accounts.
Customer Service and Technical Support:
Neither Square nor PayPal is going to be winning any major awards for the quality of its customer support. In fact, both can be quite spotty, much to the dismay of merchants. I think Square has invested a lot lately in its customer support channels and improving the overall quality. PayPal, meanwhile, focuses on being more flexible and supportive of merchants. But there’s one rather large disadvantage in choosing either company, which we’ll get to.
Square support options include:
- Help Center: Very thorough and detailed, covering just about any topic you might need. If you’re having trouble setting up or using your Square account, start here and all your questions should be answered.
- Social Media: Square’s support Twitter feed (@SqSupport) is active (though not as active as PayPal’s), and its YouTube channel is full of instructional videos. Square even allows you to post directly to its Facebook page, something it previously hadn’t allowed.
- Contact Us Form: A mainstay of help desks everywhere.
- Phone Support: The biggest flaw in Square’s phone support is that it’s only available if you have a code, which some people have reported having trouble getting. If your account is terminated, you lose all access to phone support.
- Seller Community Forum: Get advice from other Square users as well as from Square staff on this growing forum.
PayPal Here support goes through the main PayPal system. Again, you can pick the option that suits your needs:
- PayPal Hub Home: Start here to get all your questions answered. The help center is organized by topic, with FAQs you may have.
- PayPal Community Forum: Get answers from other PayPal users.
- Social Media: Facebook and Twitter. Specifically, tweet @AskPayPal Monday-Friday from 9 a.m. to 5 p.m. central time, and they’ll go find you an answer.
- Phone and Email: The online consensus about PayPal’s phone support seems to be that the service is inconsistent at best. Fortunately, most of the answers you need are available through the help desk, community forum, or social media.
Both have a lot of options for support. For most technical questions (“how do I…”), you should be able to use the self-help or community options and get an answer. However, the problems usually start to arise when a merchant encounters a hold.
Both companies will typically request a variety of documents relating to your business and/or a specific transaction. You don’t have many options except to comply and provide as much information as you can to verify your processing history and transactions. Sometimes you can get the matter cleared up quickly — PayPal seems to be more forgiving in this regard.
And then of course there’s the worst-case scenario: an account termination. Unfortunately, there’s not much you can do if this happens to you. Both companies’ user agreements say they can terminate an account at any time with no justification.
Most complaints about Square and its customer service actually stem from account terminations. When it happens, Square shuts merchants out of the phone support system, which is an endless source of frustration, to be sure. You’ll get an email, with no reasoning and no chance of appeal. Complaints about quality of service for active merchants who have questions are getting to be less common.
PayPal’s complaints are a bit more of a mixed bag, but spotty phone service is a key issue. Some sales reps can help. Others can’t. It does not appear that PayPal locks merchants out of phone support after a termination, though I also haven’t seen proof that calling can help get your account reinstated, either. But if you need assistance and everything else fails, you can usually get help through the BBB, which well get into in the next section.
It’s tough to call a clear winner here because each has different strengths. However, you should take heart in knowing you can get clear and fast answers to most technical issues from either company, usually without ever having to talk to anyone.
Speaking of complaints, however…
Negative Reviews and Complaints:
Winner: PayPal Here
Complaints are never a good thing, but they happen. Sorting through the mess of complaints for Square and PayPal Here can be daunting. Normally we’d consult the BBB, but all complaints about PayPal Here are routed through PayPal’s main page (which has some 6,000+ complaints), which makes it a little bit challenging. Sites like RipOffReport are also full of people who have been scammed by merchants on Square or PayPal and want the companies to do something about it. (They typically won’t.)
In short, that means drawing direct, apples-to-apples comparisons about complaint volume is difficult (not to mention that we don’t have the exact size of each service’s user base.) But we can use these comments other ones around the web to get a picture of where the problems and pain points lie.
The biggest issue with both Square and PayPal Here is simply account stability. These are third-party processors, which means they aggregate accounts instead of giving you a merchant account of your own. There’s an inherent level of risk. Neither company is immune to the fallout that stems from this practice. But does one company offer greater stability than the other? Honestly, I don’t see any compelling evidence either way. I’m going to call it a draw in that regard.
If you do encounter the dreaded hold or account termination, you can expect to get your money sometime within 90 to 180 days. While that wait can be a nightmare, it’s also industry standard. Again, neither company appears to be more reliable than the other in this regard, and you’re not going to get anything better from any other companies out there. Processing companies hold these funds so they don’t find themselves out a large sum of money if a bunch of unhappy customers start filing chargebacks against a merchant whose account has been closed.
So neither account is guaranteed to be 100% stable. If you have irregular but large transactions or run a business in a high-risk industry, you probably want to think twice about using either of these services. That includes selling auctions and antiques, and even some branches of professional services. Instead, get a merchant account with a mobile option. Or open an account with Square and another with PayPal and keep one around as a backup option.
We’ve already talked about PayPal and Square and what happens when your account gets terminated. And here is where BBB complaints do start to come in handy. While there’s a lot of junk complaints to sort through, you can also tell how each company responds to issues.
And here’s probably my favorite thing about PayPal: BBB complaints are handled by the Office of Executive Escalations. And they’re pretty darn good at what they do. You can get helpful answers and a lot of the time PayPal will work with you to solve the problem. I’ve seen accounts reinstated and holds lifted. You might not get everything you wanted, but this stands in stark comparison to Square’s approach, which is to shut you out and give you templated responses with no real answers.
Positive Reviews and Testimonials:
You’re going to find some pretty solid supporters on both sides of the Square vs PayPal Here debate. Both apps are well designed and easy to use, with good reviews for the most part. They both make mobile payments available to people who might otherwise not be able to manage them. The apps are simple to use and compatible with a large assortment of phones and tablets.
People seem to like how affordable Square’s hardware is, and it’s hard to argue with the sheer value Square offers if you plan to use all of its features.
PayPal Here tends to draw people in because of the online sales capabilities and the centralization with the PayPal platform.
What freaks a lot of people out when they start digging into either company is the large number of complaints from people who had their accounts terminated for no apparent reason. But at the same time, plenty of people use both Square and PayPal Here with no problem. They just tend to be a bit less vocal. We have some satisfied customers for both PayPal Here and Square who have posted on our reviews, and there’s good news scattered elsewhere, too.
The sheer number of disgruntled customers can seem scary, but you have to bear in mind that’s actually the minority of users. If either company was losing more customers than it gained, it wouldn’t stay afloat very long. So I encourage you, if you’ve decided that an mPOS is the best option, to focus on the good stuff (the features, being able to take cards virtually anywhere). Just be aware of the risks of using a third-party processor.
In the Square vs PayPal Here debate, honestly believe that both Square and PayPal Here are excellent mPOS options — without question among the best out there. They have comparable pricing, similar feature sets, and virtually identical contract terms and customer support options. Neither one is inherently more stable than the other.
If you need a LOT of features and you want to create a seamless mPOS/countertop experience, Square is the clear winner. PayPal Here lags behind Square as far as features and overall value add go. But you’re only going to benefit if you actually plan to use all those extra POS-based features, like the offline mode or virtual terminal.
If you want strong eCommerce support to go with your mPOS, PayPal is the better option. You’ll find a lot more shopping cart and software integrations. And of course, you can integrate PayPal into a lot more full-fledged POS options to go with the PayPal Here mPOS.
So yes, Square is the ultimate winner. But it’s definitely a close race and some merchants will be better served by PayPal Here — or at least, they’ll get as much value and use out of it. If you are still on the fence about which option to choose, I recommend making a list of all the features you need and what you prioritize in an mPOS. How do you want your business to grow? Which facets of the business are most important. Once you’ve identified what you need, making the decision will be a lot easier.
Want to learn more about Square vs PayPal Here? Check out our reviews of both products or give these services a try. We’d love to hear from you, too, so if you have any questions feel free to contact us!