Stripe VS Square: Which Is Better For Online Payments?
Spend a little bit of time reading up on Stripe and Square (read our review), and you’ll start to see the similarities. They’re both giants in the payments industry, media darlings that have transformed the way people pay for things as well as the way merchants accept payments. They’re both on the leading edge of technology and rely heavily on machine learning to drive their payment processing systems.
Most importantly, both Square and Stripe offer huge assortments of commerce tools that make it easy for merchants to run their businesses. With the various APIs and integrations available, plus support for in-person, online, and even in-app payments, there are almost limitless possibilities for creating a custom system with everything from invoicing to email marketing and more.
However, once you get past that point, it becomes harder to draw apples-to-apples comparisons because Square’s offerings are much more varied. Square is an all-in-one processor that can handle in-person and eCommerce payments as well as inventory management, CRM, and more. Stripe has generally focused more on mobile and eCommerce, with powerful tools for marketplaces and subscription-based businesses. It’s a relative latecomer to POS transactions.
To keep things fair and within a manageable scope, we’re going to primarily consider each company’s online/mobile commerce tools and point of sale (POS) options and touch briefly on the additional services each one provides. If you want to know more about the additional services each company offers, however, check out their respective in-depth reviews.
If you want to sell online and Square and Stripe have made your shortlist, you should start by answering some questions:
- What features do you absolutely need? Which features aren’t essential, but would be very nice to have?
- What percentage of your transactions are from outside the US?
- Do you have a developer or advanced coding knowledge yourself?
- Do you have limited tech knowledge and need an easy solution?
- Are you looking for specific integrations?
- What industry is your business part of?
- How advanced are your subscription tool needs?
Once you have the answers to these questions, you can sit down and look at each company in more detail. Read on for our comparison of Stripe vs. Square!
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Stripe VS Square: Quick Comparison
Both Stripe and Square offer powerful, full-service third-party payment processing APIs. Square has a pretty clear edge when it comes to processing in-person payments and being ready to go right out of the box. Stripe’s robust multicurrency and payment method support, on the other hand, can give it an edge in international eCommerce.
The main reason you’d use either service is, of course, to process non-cash payments. Both Stripe and Square are third-party processors, meaning that they aggregate all their customers into a single merchant account. That makes it easier to get approved quickly but at the cost (potentially) of account instability down the road. It also makes them a bad fit for high-risk businesses.
Square, for the most part, focuses on letting merchants accept card payments. You won’t get ACH support, but if you sell online, you can add support for online/mobile wallets.
Stripe’s payment processing goes beyond cards. In addition to ACH, Stripe allows merchants to accept a host of localized payments favored in different parts of the world. Plus, for online payments, you can add Apple Pay on the web and other mobile wallets.
Businesses that aren’t looking to do a lot of coding in-house will want to look for strong shopping cart integrations for eCommerce.
In keeping with its user-friendly reputation, Square makes it easy for businesses to engage in eCommerce. Square has acquired Weebly for an easy, affordable eCommerce option. Plus, Square’s list of integrations already includes some of the best shopping cart options — and the list keeps growing. Square is an omnichannel solution for merchants who want to sell anywhere without needing to build a complicated system of integrations or do a lot of coding work. The advantage of choosing Square is that you can get set up quickly with access to all of Square’s free tools and software, and it’s ready to go after you import your products and adjust your settings a bit.
New to Square is Square Online Checkout, which is designed to match some of PayPal’s eCommerce flexibility. Square Online Checkout allows you to generate a link/button that you can embed in your website, emails, texts, or social media posts. The link allows the buyer to buy your product, make a donation, or otherwise transfer money to you. It’s currently only available in the US.
Where Square goes for ease of use, Stripe dominates in the sheer number of integrations. In addition to integrations with major eCommerce software providers, developers have created an assortment of plug-ins for businesses operating on WordPress, Magento, and other websites. If you’re not sure where to start, you might end up needing to do a lot of research to decide the best course of action — but you can at least take heart in knowing that there’ll be something that will meet your needs.
Stripe also has far more robust options for businesses that need to take recurring payments, particularly ACH payments. While Square does offer advanced reporting, it’s still nothing compared to the power of Stripe Sigma, an SQL-based custom reporting tool.
As “full-stack” payment services, both Square and Stripe offer extremely robust APIs for any developers on your staff. It’s not so much a matter of which service better supports developers, but which ecosystem better suits your business.
Square’s dev tools make it possible for you to create almost any custom integration you could need. For eCommerce, there are two APIs: Checkout and Transactions. Square Checkout is a premade form that can be dropped into a site with minimal fuss. Using Checkout means merchants are eligible for some perks, such as next-day deposits and chargeback protection. The Transaction API, combined with Square’s payment form, is more customizable. Square also supports app-based payments and supports iOS, Android, and Flutter SDKs.
If you’ve swiped a card at a small business, there’s a pretty good chance you’ve used a Square interface at some point. If you’re looking for full-service POS options, it’s hard to beat Square.
Square POS is one of the most powerful free mobile apps out there, and it does very well as a countertop iPad POS, too. Check out our complete review for an in-depth look at the app as well as compatible hardware. Square offers merchants a free magstripe reader, but prices go up from there to accept EMV chip cards and contactless payments. Plus, Square’s POS and Reader APIs allow you to use Square’s hardware and checkout flow in custom-built apps if you need something more specialized.
In comparison, it’s very clear that Stripe isn’t looking to fiercely compete in the POS ring. Stripe does, however, support POS payments through Stripe Terminal. This isn’t a full suite of hardware and custom apps, but rather developer tools you can use to integrate Stripe into compatible POS apps. It’s not a bad option if you’re already in Stripe’s ecosystem and, with Square’s base rate change, Stripe’s 2.7% + $0.5 is looking a lot more competitive.
Yes, capital, as in loans. Payment processing services, such as Square, Stripe, and PayPal, have begun offering their customers financing. It’s not as strange as it sounds. Payment processors have a pretty good idea of what your revenue looks like, as well as the infrastructure to collect payments on any debt they issue.
Stripe Capital and Square Capital are remarkably similar. Rather than apply for a loan, both companies will automatically extend an offer to qualifying customers through their dashboards. Neither checks your checks, incidentally.
While both companies call their products loans, they actually function a bit more like merchant cash advances. That is to say, they’re repaid by your payment processor taking a percentage of your credit card sales until you’ve repaid the amount you were extended, plus a flat fee.
I wouldn’t recommend choosing either service based on their Capital program — the best one is the one offered by the payment processor that better suits your overall payment services needs. That said, there are a few notable differences. The first is that Stripe Capital is faster, promising next day delivery of funds. Square Capital takes two to six days to get you your money. On the other hand, Square provides more upfront details about its service than Stripe. For example, Square Capital loan amounts range from $500-$250K, and the company wants to see a minimum annual revenue of $10K in Square sales in order to qualify. Stripe doesn’t divulge either.
Neither company lists a range of fees, but both use 10% as an example.
Both Stripe and Square offer a variety of other services that may or may not be relevant to your company. In broad strokes, Stripe’s services tend to be more focused on billing, payment transfers, fraud protection, and advanced reporting. Meanwhile, Square’s are more focused on customer management and retention, multilocation management, and employee management. It’s harder to make apples-to-apples comparisons with most of these services as only some overlap.
Stripe’s offerings include:
- Stripe Billing: Allows you to bill customers and manage subscriptions.
- Connect: A toolset for marketplaces and platforms.
- Payouts: Automation toolset for mass payouts to vendors and contractors around the globe.
- Atlas: A service for international businesses that want to incorporate in the US.
- Radar: A machine-learning powered fraud detection service. Probably overkill for most businesses, but if you’re concerned about security, it’s an option.
- Issuing: Stripe can generate physical and virtual cards that can be used for mobile wallets or employee expense accounts.
- Corporate Card: Stripe offers a corporate credit card. Your credit limit is based upon your company’s payment processing and bank history. Customers who spend $5,000 on the card get $50,000 in free payment processing.
- Relay: A toolset for creating mobile marketplaces by linking your eCommerce catalogs with your app or directly uploading product information.
- Sigma: Stripe’s SQL-powered reporting system is more thorough than Square’s reporting tools (which are excellent, btw). Extremely powerful for those who don’t mind writing SQL-queries.
Square’s additional services include:
- Square Appointments: Scheduling software for teams.
- Square For Retail: An inventory tracking system for iPad.
- Square For Restaurants: A specialized POS system for full-service businesses.
- Web Hosting: You can host your eCommerce site on Square.
- Advanced Reporting: While not quite as advanced as Stripe’s Sigma, Square offers some of the best online reporting tools you can get from a pay-as-you-go provider.
- Multilocation Management: You can manage multiple physical stores from a single account.
- Gift Cards: Square lets you issue online gift cards at no charge.
- Customer Feedback: Square’s interface solicits feedback from your customers.
- Email Marketing: You can send newsletters and special offers to your email subscribers for a fee.
- Loyalty Program: Square’s loyalty program lets you choose from a number of different reward incentive programs for your customers.
- Team Management: The basic plan offers standard timekeeping, break tracking, payroll exports, and basic reporting. The Team Plus plan supports multiple wages, unlimited sets of user permissions, and advanced reports.
- Payroll: Allows you to manage employees’ PTO, sick leave, compensations, and benefits. You can also pay freelancers through it.
- Hardware: Square offers a lot of hardware. For a rundown, check out our guide to Square’s credit card readers and POS bundles.
I am happy to say that pricing for both Square and Stripe is mostly straightforward. There are no monthly fees, no monthly minimums, and no statement fees. That’s very nice to see.
You might run into a few situations that aren’t simply explained, but here’s what you can generally expect for pricing:
Square Transaction Fees
- 2.9% + $0.30 per online card transaction or invoice
- 2.6% + $0.10 per swiped, dipped or tapped transaction
- 3.5% + $0.15 per keyed entry
Square also has no chargeback fees, which is very unusual. Not only that, but the company has rolled out Chargeback Protection, which will cover the actual chargeback costs on qualifying disputes up to $250 per month. This doesn’t apply to merchants who use the Transactions API, but it is available for those who use Square Checkout.
You can get volume discounts if you process above $250K per year and have an average ticket size exceeding $15. That’s a mark in Square’s favor for large businesses. However, nonprofits don’t get any sort of special discount, which you can often find with other processors.
While Square’s premium POS apps and its marketing tools will rack up additional fees, the vast majority of the tools Square provides cost nothing at all beyond payment processing costs. Check out our article, How Much Does Square Charge, for an in-depth look at pricing.
Stripe Transaction Fees
- 2.9% + $0.30 per online transaction or invoice
- 2.7% + $0.05 for swiped, dipped or tap transactions using Square Terminal
- 0.8% per ACH transaction (capped at $5 maximum)
For each chargeback, Stripe will assess a $15 fee (unless the chargeback is decided in your favor). In that case, you’ll pay absolutely nothing. Also, I’d like to point out that Stripe supports ACH transactions, something that Square does not. If you’d like to be able to offer the option to pay with bank accounts, you’ll need to use Stripe or another processor that supports ACH.
Stripe has moved away from its “all tools included for the price of payment processing” model and begun charging modest fees for some of its additional services. For example, Stripe’s subscription tools (lumped under the name “Stripe Billing” along with invoicing) will cost you a small percentage fee (between 0.05% and 0.08%) on top of your transaction.
Stripe does offer enterprise pricing for very large businesses, and some nonprofits may be eligible for a special rate. Stripe doesn’t make any promises about nonprofit pricing apart from “let us know and we’ll see what we can do.” So you shouldn’t assume it’s guaranteed.
With Stripe, you may also be able to negotiate for micro-transaction rates as well. Whereas per-transaction fees such as the $0.30 Stripe and Square charge can eat up profits from small transactions (less than $10 in particular), micro-transaction rates typically include a higher percentage and a lower per-transaction fee that can save merchants money. This is ideal for anyone who sells digital goods and other low-cost items.
Because it’s something offered as part of a custom package, Stripe may not offer this deal to everyone. If you’re unable to get a micro-transaction plan from Stripe, it might be worth looking at a third option — PayPal — instead.
All in all, Stripe and Square are fairly evenly matched in pricing. Some merchants might enjoy the lack of chargeback fees and included chargeback protection that Square offers. But Stripe might be a bigger draw for other companies, despite the costs for using some of its additional services, such as Stripe Billing.
Ease Of Use
Square has built its empire on the idea of simplicity. All of its software works perfectly together, with centralized reporting. While the premium iPad POS systems (Square for Retail and Square for Restaurants) offer interfaces designed especially for their respective niches, Square POS — the free mobile point of sale app — is very intuitive and easy to use. Square’s eCommerce options are likewise easy to use; you just need to connect Square to your online store to enable payments. However, keep in mind that the complexity of your eCommerce store depends on which shopping cart software you use. Control of your payment information — from the POS app, your online store, invoices, and any other channel — is all centralized under the Square dashboard.
Stripe is complex. It’s the nature of the beast — with so many features and a developer-first focus, Stripe is not going to be as simple as Square, especially for users who aren’t exactly tech-savvy. Though there are ways around having to type any code, these “plug-and-play” integrations aren’t the service’s strength. Once you get Stripe up and running, it’s perfectly user-friendly, but it’s really hard to beat Square in this arena.
Customer Service & Technical Support
Square offers merchants phone and email support as well as an extensive knowledgebase. That’s pretty typical of any processor, but on top of that, Square operates the Seller Community, a community forum about all things Square. You can get answers from other Square merchants as well as from Square support reps. It’s a pretty powerful tool. And on top of that, Square’s team monitors Stack Overflow for questions about Square products and responds to them. I can’t say that Square’s customer support is all sunshine and rainbows because I do see customer complaints about the quality. However, without a doubt, the biggest complaint about the quality of customer support comes from merchants whose accounts have been terminated. In that case, Square cuts off access to phone support and will only communicate via email.
For a long time, Stripe lagged behind other providers in terms of customer service. That has now changed, and it definitely makes Stripe a more competitive solution in my eyes. Stripe also maintains a self-service knowledgebase, though I don’t think it’s as extensive or detailed as Square’s is. But I will say that Stripe’s documentation is pretty legendary, and so it’s going to be one of the best resources you can get. You can also find questions about Stripe on Stack Overflow, but I am not able to ascertain whether Stripe’s team is active on the forum the way that Square is. And of course, Stripe has long had a freenode IRC channel (#stripe). Happily, after years of complaints about merchants not being able to talk to a real person in real-time, Stripe decided in April 2018 to adopt 24/7 customer support for all its merchants. That kind of change in operations is a massive investment, and I don’t see it done often. It hasn’t eliminated the issues that come with the third-party processing territory (account freezes, holds), but it does improve the customer experience overall. Also, for larger businesses, Stripe now offers premium support packages starting at $1,000/month.
User Reviews, Complaints & Criticisms
As far as complaints go, the single biggest issue for both Square and Stripe is a common one:
- Account Holds & Terminations: This is unsurprising (understatement of the year, right there) because it’s a common issue with any third-party processor. Because these payment systems are usually open to almost anyone right away and they are all lumped into one large merchant account, there’s a greater risk that some of those accounts will be terminated for risky behavior. There’s very little scrutiny done before a subaccount with one of these processors is approved, which stands in contrast to merchant accounts, where the processing company will do a lot of underwriting and investigation before approving your application. Both Square and Stripe use a lot of machine learning to analyze transactions and flag suspicious behaviors. The potential for account holds or terminations is universal — you will encounter it with any third-party processor. If you want to avoid it, your only alternative is to seek out a traditional merchant account.
The other big complaint that I see with both is also a pretty common one:
- Poor Customer Support: If I’m honest, reports about the quality of customer service conflict. But because of how common the complaints are, I’m listing it here. With Stripe, the most common issues are the lack of live support (which, in theory, should no longer be a problem?) and slow response times for email. With Square, a lot of the complaints about poor customer service come from terminated merchants, but I’ve seen a few complaints about slow or unhelpful email responses.
Additional frequent complaints about Stripe include:
- Lack Of Fraud Protection: I want to be clear: Stripe does have fraud management tools and a system to help merchants fight chargebacks. But I have seen complaints from merchants who don’t think these are adequate. Chargebacks are not settled by Stripe, so there’s not much the company can do beyond pass the requested documents on. But for fraud prevention, merchants need to make sure they have the appropriate tools enabled.
- Not User-Friendly: There’s a lot of testimonials from users (especially developers) who like Stripe and find it simple to set up. There are plenty of others who disagree with that idea. I’m inclined to think most people with a decent technical backing will get along fine with Stripe, but for some people, especially those with less technical knowledge, it’s not going to be a good choice.
For Square, there are two other common complaints:
- Lack Of Advanced Features: It’s not that Square doesn’t have enough features or that it’s missing anything important. The complaints about Square often focus on the lack of very particular advanced features that you typically find in full-scale POS systems. In this case, I think Square’s lack of extensive subscription tools would fit the bill. As another example, some merchants have been upset for quite a while over the lack of Cost of Goods Sold (COGS) reporting. Square added this feature with its Square for Retail app, but not for online sales or its free POS. Square has some robust reporting tools, but in the end, they won’t hold a candle to Stripe’s Sigma offering.
- New POS Pricing Model: For a long time, Square was a great deal for small businesses that conducted a lot of small, in-person transactions. The 2.75% flat pricing meant that the cost of your transaction always scaled with your sale. That’s gone now, with Square using a more typical percent-plus model (2.6% + $0.10). While there’s nothing sinister about this — it more accurately reflects the costs involved — it has affected a lot of Square’s customers.
Neither Square nor Stripe lacks in the integration department. In fact, you’ll probably need to use search tools to dig through the overwhelming number that they have. Overall, Square probably has an edge in terms of big-name integrations, where Stripe is more of a platform that you hack on (or, in plain English, mess around with).
Square centralizes its integrations in the Square App Marketplace, which is good because there are A LOT of them. They include accounting tools, eCommerce, invoicing, POS systems, inventory, recurring billing, and a lot more. Lately, Square has added more integrations tailored to specific industries, such as healthcare management, too. As I touched on earlier, you can also develop your apps for Square using one of its APIs.
Stripe similarly consolidates its official integrations on its Partners page, where you can find first-party extensions, eCommerce platforms, accounting synchronization, POS software, customer management extensions, and more. You can also join Stripe’s Partner program as a developer or commission one to build you a custom app.
Which Is Best For My Online Payment Processing Needs?
If you’ve made it this far, you probably have a decent idea of each company’s strengths and weaknesses. If you skipped ahead, or if you’re looking for a neat and tidy summary, you came to the right place.
Choose Square If…
Square is best for:
- Brick & Mortar Businesses: If you only do some of your business online, you’ll likely benefit more from Square’s POS infrastructure, software, and hardware.
- Businesses That Want An Easy-To-Use Solution: Not a developer? Don’t know any developers? Don’t want to know any developers? Square is designed to get you up and running quickly, with access to popular integrations as well.
- Businesses That Also Want Productivity & Management Support: Square offers a lot of tools to help you manage your company and your customer base.
Choose Stripe If…
Stripe is best for:
- Businesses Doing International eCommerce: Stripe’s support for multiple currencies and payment methods makes it a better choice for companies doing business globally.
- Businesses That Are Completely Or Mostly Online: While you can use Stripe for POS, that’s not where it shines. Its ecosystem is optimized for online transactions.
- Businesses With In-House Developers: Stripe is made with developers foremost in mind. Whereas this can sometimes make it inconvenient for laypeople, a programmer or two should be able to get it up and running with little effort thanks to Stripe’s extensive documentation and tutorials.
Comparing Square VS Stripe: The Final Verdict
Stripe and Square have some very important core similarities: They’re both third-party processors with an assortment of tools that allow merchants to sell online. Neither one is suited to high-risk industries, and there’s a lengthy list of businesses neither company can work with. But despite that, both Stripe and Square offer tools that cater to a huge assortment of industries. They’ll both grow with your business, making it easy to scale up.
But despite their similarities in terms of business model, it’s also pretty clear that what each company does best is completely different.
Square is a spectacular all-in-one processor, with a ready-made solution. You can sell in a store, on the go, and online — and get all of your information and payments and orders collected in one simple, intuitive dashboard. There’s a vast array of add-on products that allow you to consolidate a host of business functions under one name, and they’re guaranteed to work together perfectly. If you have limited technical knowledge, Square is going to be much easier to get started with and to navigate through the different features.
Stripe focuses on internet payments (both on the web and in-app), but its tools make it possible for businesses to cater to customers all over the globe. The international appeal — from the local currency displays to the sheer breadth of payment methods accepted — makes it clear that Stripe is already a global player. Not only that but with Stripe’s APIs and documentation, a savvy developer could create all kinds of payment customizations for a business. Business owners who don’t have a developer on staff and who don’t have a lot of technical knowledge themselves may initially struggle with understanding how to use Stripe, especially if they want to do more than integrate it with some sort of shopping cart software.
Sit down, think about what features are mandatory for you to have — and then look at which ones you’d like to have, but aren’t necessarily required. From there, it should be fairly clear which solution is right for you! Don’t forget to check out our complete reviews of Stripe and Square for more insights into how they function.
Have questions? Leave us a comment, and we’ll help! Have experience using either of these tools? We’d love to hear from you.
As always, thanks for reading!