Square vs Stripe – An In-Depth Comparison

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Spend any time at all researching the best payment platforms for your business you are sure to come across Square and Stripe as leading contenders over and over again. And for good reason!

Both have positioned themselves well as being very user-friendly, incredibly cost-effective, and offering a broad range of features, integrations, and benefits usually reserved for much more expensive platforms.

On the surface the two companies look very similar, and choosing between the two can be difficult.  There are some big differences to consider, however.

We will take a deep dive into what their key similarities and differences are in an attempt to help you make the decision – Square vs Stripe?

Square vs Stripe

First, let’s just have a quick introduction to both companies:

Square

Square has firmly planted itself as one of the biggest names in payment processing.  As one of the first to shake up the industry with their low-cost high functionality offerings, they are a third-party payment processor with solutions for in-person and eCommerce sales.

While they are particularly loved for their in-person payment options, great hardware solutions, and clean easy to use POS systems, they haven’t forgotten about eCommerce, as we will see below.

Stripe

Stripe is often considered the eCommerce version of Square, and its online functionality does in many ways outstrip Square.  Their in-person solutions do not, however.

Stripe is particularly loved and well know for being the developer’s choice of payment solution as their API has arguably the best customization capabilities on the market.  That’s not to say you need to be a coder to take advantage of Stripe’s capabilities.

Stripe also has fantastic international integration and multi-currency capabilities that Square falls a little short on.

The biggest difference that’s worth noting about the two is that they are actually targeted at different markets.  This may seem surprising given how similar their offerings are.

Stripe is predominantly focused on eCommerce and only has nominal support for its POS.  Square on the other hand is firmly focused on in-store business transactions, but also has the benefit of making online transactions easy and accessible.

Features

As we’ve mentioned, both Stripe and Square are third-party payment processors which means they don’t come with a merchant account.  Instead of you having to have separate merchant accounts (and their associated costs) what both do is aggregate the funds from all of their merchants into one large merchant account that they manage.

The good thing about this is that it means you can sign up in seconds, the downside is that any account issues can be difficult to fix.

Let’s dive into some of the key features

Payment processing

Stripe takes the advantage when it comes to payment processing in many ways.  They accept all major credit and debit cards but also accept ACH payments and have the ability to add payments like Apple Pay to mobile wallets.

Square on the other hand only really focuses on card payments and has more expensive ACH support.  You can add support for online wallets but it doesn’t come as standard.

Stripe also has the advantage in international payments being able to accept a wide range of localized currencies depending on where your customers are in the world.

Online checkouts

Online integrations for payment processing are now vital for your companies growth, and access to code-free shopping cart integrations is what most people are looking for.

Square does an excellent job here with very user-friendly and easy online checkout integrations.  They made big steps into offering more for eCommerce too when they acquired Weebly, meaning they can now offer full eCommerce store capabilities.

Square is built as an omnichannel solution to allow merchants the ability to sell anywhere without the complications that can come along with that kind of setup.  With Square you know you are getting a platform that is quick, easy, and you’re ready to go in no time.

Square’s online checkout is also designed to match much of PayPal’s eCommerce flexibility.  You can generate a button (or link) for your website, social media, emails, etc, that takes your customers straight to the purchase page.

Stripe, on the other hand, thrives on its flexibility and integrations.  Stripe integration is a primary choice for many eCommerce software providers including WordPress, Square Space, and Wix. 

They also have a wide range of developer-created plugins for doing just about anything you want.  It can take a while to get your head around if you’re just getting started, but the bottom line is they will almost certainly have the functionality and flexibility to match whatever your needs are.

Stripe also has better and more robust processes for accepting recurring payments.

Stripe’s reporting also outstrips Square, giving you far more in-depth knowledge of exactly how your store is running.

Developer tools

While Stripe has the reputation for being the developer’s choice, Square offers a huge amount of flexibility with their APIs too, and in reality, the question of which is better here comes down to personal choice and which ecosystem overall suits.

Stripe has a huge array of support documentation, tutorials, and multiple coding languages which is what has made them so popular, and so flexible.  You can create an entirely custom checkout system, or use pre-existing components brought together.

In-person payments

As we’ve mentioned, this is where Square shine.  Their mobile POS system is an incredible piece of software made all the more impressive because it’s free.  They have a wide range of hardware solutions too, including card readers and full functioning terminals.

What is particularly good is that they also offer variations on their POS systems depending on the industry you are in.  Retail POS has great inventory management, which Restaurant POS includes table plans and employee management.

Stripe does have its own terminals and POS systems for in-person payments.  This isn’t a fully robust system with app integrations, however, it’s a developer tool to integrate Stripe into other compatible POS apps.

If you’ve started online and are looking to expand to in-store sales and you’re already with Stripe then it’s not a bad option by any means.  But if your focus is in-store and you’re just starting out then Square is by far the clear choice.

Pricing

Now we get to the good stuff – how do they differ on pricing?

The answer is, they’re pretty comparable.  Both have no monthly fees, no minimum contract length, no monthly minimums, and no statement fees.  This in itself is one of the prime reasons that Stripe and Square are inching their way above their competitors.

For online transactions, they are both at the standard 2.9% plus 30 cents.

In-person transaction rates are a little different.  Stripe is 2.7% plus 5 cents, and Square is 2.6% plus 10 cents.

At a quick glance, this might look like Square is cheaper, but in actual fact for purchases that cost less than $50 Stripe will be cheaper overall, for anything above $50 Square will be cheaper overall.

Extras – Capital

Just like PayPal, both Square and Stripe have started offering capital options (loans) to their customers.

It makes sense in many ways as your payment processor knows the ins and outs of your company’s revenue, and can collect the debt directly.

This is a nice little perk if you’re ever in need of it.

Ease of Use

Square was founded on the promise of simplicity and has always delivered on that promise.  Their systems are robust, quick to learn, easy to use, and offer great customization.  While there’s a slightly steeper learning curve for their specialized POS systems (retail/restaurant/etc), they are still designed to keep you working rather than learning.

Stripe is far more complex.  This comes with the territory when you are so developer-focused.  For many, however, that don’t have that developer background or access to a developer, there is a lot to get your head around.

Stripe does have plug-and-play options that make things simpler, but fundamentally they fall short of Square’s hassle-free setups.

Our thoughts

The decision between Square and Stripe is understandably difficult. At the base of it all, both are third-party processors that offer great functionality, wide customization, and are priced at a level that everyone can get on board with.

As we’ve mentioned above, the bottom line comes down to what the focus of your business is as to which will be better suited in the long run.

If you are a business that primarily functions from in-personal sales then Square is the better choice.  If, however, online is your primary then Stripe is the one for you.

Whichever you choose you can be assured that you are partnering with a great payment processor that will have more than enough functionality to meet your company’s needs.

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Kareena Maya

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Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.

Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.