Square vs PayPal
Last updated: September 2, 2026
Square
A
Square offers simple, transparent payment processing ideal for small businesses. Flat-rate pricing, no monthly fees, and excellent software make it a top choice — but account holds and limited support are key concerns.
PayPal
A-
PayPal is a global, feature-rich digital payments platform (consumer wallet + merchant services) with extensive integrations and brand reach. It is trusted by many businesses but criticized in public reviews for dispute handling and account-hold practices.
VS
Overview
PayPal is cheaper to take a card payment. Square is cheaper to run a business. PayPal's published in-person rate of 2.29% + 9c undercuts Square's 2.6% + 15c at every volume, its first card reader is $29 against Square's $59, and its point-of-sale app carries no monthly or setup fee — so on rate alone PayPal wins, and by more than most comparisons admit. Square earns its price back elsewhere: it charges nothing when a customer disputes a payment where PayPal charges $20, it applies no currency conversion spread where PayPal takes 4%, it publishes a next-business-day payout schedule, and its free plan is a real till with inventory, staff logins and offline payments rather than a card-reader app. Which of those two sets of facts matters more is genuinely a function of what you sell and to whom.
Key Takeaways
- ✓PayPal is cheaper per in-person sale: 2.29% + 9c against Square's 2.6% + 15c, and cheaper again on keyed entry at 3.49% + 9c against 3.5% + 15c.
- ✓Square charges no chargeback fee at all; PayPal charges $20 each.
- ✓PayPal applies a 4.00% currency conversion spread; Square publishes no equivalent charge.
- ✓PayPal's first card reader is $29 and its Terminal $199; Square's hardware starts at $59.
- ✓Square publishes a next-business-day payout schedule and a 1.95% instant transfer fee; PayPal publishes neither.
Square
Square is for businesses that need the software as much as the processing — inventory, staff management, multiple locations, offline trading — and for anyone with dispute exposure or international customers, where PayPal's $20 chargeback fee and 4% conversion spread quickly outweigh its lower rate.
PayPal
PayPal is for sellers who want the lowest cost per transaction in person, the cheapest way to start at $29 for a reader, or a wallet button in an online checkout — and who do not need deep point-of-sale software or take many disputes.
The Verdict
It Depends on Your Needs
Why?
It comes down to whether your costs are driven by the rate or by everything around it. PayPal genuinely wins on rate, and by more than it is usually given credit for: 2.29% + 9c in person against Square's 2.6% + 15c, cheaper keyed entry, a $29 first reader against $59, and no monthly fee at any tier. A small in-person seller with clean, domestic, low-dispute trade will simply pay PayPal less, and Square's paid plans do not close the gap. But Square charges nothing when a customer disputes a payment where PayPal charges $20, and applies no conversion spread where PayPal takes 4% — so a business with any real dispute rate or any international sales flips the arithmetic, often decisively. Square also publishes when it will pay you and PayPal does not, and its free plan is a working point of sale where PayPal's is a card-reader app with inventory attached. Take the rate if the rate is your problem; take Square if disputes, foreign currency, or running the shop is.
Feature by feature
Detailed Comparison
Filter Options
Selling in person
| Feature | Square | PayPal |
|---|---|---|
| Card-present rate | 2.6% + 15c tapped, dipped or swiped (Free plan) | 2.29% + 9c Winner |
| A true like-for-like: PayPal publishes 2.29% + 9c for card-present transactions and the same figure for QR. Square falls to 2.5% + 15c on the $49 Plus plan and 2.4% + 15c on the $149 Premium plan, and still does not reach PayPal's rate — on $4,000 a month across 100 sales, Square Free costs $119 and PayPal $100.60. | ||
| Keyed / manual entry | 3.5% + 15c | 3.49% + 9c Winner |
| Hardware | Readers and registers from $59 | $29 first card reader, $79 for each additional; Terminal $199, or $239 with barcode scanner Winner |
| Point-of-sale software | $0 per location on the Free plan; $49 Plus, $149 Premium | $0 — 'no monthly or setup fees' |
| Both have a genuinely free tier, but they are not the same product. Square's free plan includes inventory, staff logins, reporting and offline payments, and its paid tiers add multi-location management and a lower card rate. PayPal's app covers payments, inventory, sales tracking and invoicing with no paid tier above it. | ||
Card-present rate
Square
2.6% + 15c tapped, dipped or swiped (Free plan)
PayPal
2.29% + 9c
Winner
A true like-for-like: PayPal publishes 2.29% + 9c for card-present transactions and the same figure for QR. Square falls to 2.5% + 15c on the $49 Plus plan and 2.4% + 15c on the $149 Premium plan, and still does not reach PayPal's rate — on $4,000 a month across 100 sales, Square Free costs $119 and PayPal $100.60.
Keyed / manual entry
Square
3.5% + 15c
PayPal
3.49% + 9c
Winner
Hardware
Square
Readers and registers from $59
PayPal
$29 first card reader, $79 for each additional; Terminal $199, or $239 with barcode scanner
Winner
Point-of-sale software
Square
$0 per location on the Free plan; $49 Plus, $149 Premium
PayPal
$0 — 'no monthly or setup fees'
Both have a genuinely free tier, but they are not the same product. Square's free plan includes inventory, staff logins, reporting and offline payments, and its paid tiers add multi-location management and a lower card rate. PayPal's app covers payments, inventory, sales tracking and invoicing with no paid tier above it.
Best For Your Business
Recommendations based on your business type
Market stall, pop-up or mobile service taking a handful of payments
Recommended
PayPal
PayPal is cheaper on every axis that matters at this size: a $29 reader against $59, 2.29% + 9c against 2.6% + 15c, no monthly fee and a free app that handles inventory and invoicing. There is not enough dispute or foreign-currency exposure here for Square's advantages to bite.
Restaurant, cafe or shop running a counter and a team
Recommended
Square
This is where Square's software earns the higher rate. Table and order management, staff logins and shift management, offline payments when the internet drops, and multi-location tiers have no equivalent in PayPal's POS app. You will pay a little more per sale for a system that runs the floor.
Business selling internationally with currency conversion
Recommended
Square
Both charge the same +1.5% cross-border surcharge, but PayPal adds a 4.00% conversion spread and Square publishes none. On converted sales that single line costs more than PayPal's entire rate advantage returns.
Business with a high dispute rate — custom goods, long lead times, subscriptions
Recommended
Square
Square charges no chargeback fee. At PayPal's $20 each, twenty disputes a month is $400 in fees before any lost sales — far more than the roughly $230 a month PayPal's lower rate saves on $50,000 of in-person volume.
Consumer e-commerce brand where buyers expect a PayPal button
Recommended
PayPal
Only PayPal accepts PayPal and Venmo wallet payments, at 3.49% + 49c. If a meaningful share of your checkout converts on that button, no rate or fee advantage elsewhere replaces it.
Consultant or agency invoicing large amounts occasionally
Recommended
PayPal
PayPal collects invoices by bank transfer at 1% capped at $10 with no monthly fee, so a $10,000 invoice costs $10. Square caps ACH at $10 too, but only on its $49 or $149 plans — on the free plan the same invoice costs $100.
Square: Best for 3 use cases
PayPal: Best for 3 use cases
Frequently Asked Questions
Common questions about this comparison
PayPal, on rate. Its in-person card rate is 2.29% + 9c against Square's 2.6% + 15c, its keyed rate is 3.49% + 9c against 3.5% + 15c, and its first card reader is $29 against $59. Square's paid plans lower its rate to 2.5% or 2.4% but never below PayPal's. Where Square wins is the fees that are not the rate: no chargeback fee against PayPal's $20, and no currency conversion spread against PayPal's 4%.
On $4,000 a month across 100 in-person sales, Square's free plan costs about $119 and PayPal about $100.60 — roughly $18 a month. On $50,000 a month across 1,250 sales it is about $1,487 against $1,257, or $230 a month. Square's $149 Premium plan does not close that gap, because the plan fee outweighs the rate improvement. Two lost disputes a month at PayPal's $20 each would erase the smaller of those savings entirely.
No. Square has no consumer wallet and does not resell PayPal's. If PayPal or Venmo has to be in your checkout, PayPal is the only route, at 3.49% + 49c for wallet transactions. Because PayPal has no monthly fee, many online sellers run a card processor and PayPal side by side, so the wallet costs nothing to have and charges only when a customer uses it.
Yes — Square publishes no dispute fee and is consistently documented as charging none, which is unusual. You still lose the disputed sale, and the original processing fee is not returned if it goes against you, but there is no separate penalty. PayPal charges $20 for each chargeback in the US, which for a business with meaningful dispute exposure is the single largest difference between the two.
Square publishes a schedule: payments taken before 5pm PT / 8pm ET land in your bank the next business day, and instant or same-day transfers cost 1.95%. PayPal publishes no standard business-day figure on its merchant fee schedule. Its POS pages advertise access to funds 'in minutes' through the PayPal balance, but that is money in PayPal, not in your bank, and the fee to move it out is not published alongside the merchant rates.
Square, clearly, and it is what you are paying the higher rate for. Square's free plan includes inventory, individual staff logins, shift management, reporting and offline payments, and its $49 and $149 tiers add multi-location management and industry-specific tooling for food, retail and appointments. PayPal's app is free and covers payments, inventory, sales tracking and invoicing, with no paid tier above it — capable for a stall or a single counter, thin for a restaurant.
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