Square Payments Difference From Paypal

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Square and PayPal both offer service plans with zero monthly fees, so merchants can sign up for either service without facing any recurring costs. The potential monthly costs, though, vary depending on what additional services a merchant is interested in.

Square has announced recently that it will discontinue its monthly pricing plan after January 2014. This pricing option was intended for larger merchants and cost $275 per month. Under this plan, all transaction fees were waived for the first $250,000 processed in a year, and this plan only saved merchants money if they were swiping over $10,000 per month. In the wake of its discontinuation of this plan, Square will offer its flat 2.75% (3.5% plus $0.15 keyed) to all merchants.

One of the more intriguing services offered by Square is the Square Market, an online marketplace where Square merchants can establish a store profile and sell their products online for a rate of 2.75% per transaction. Although these online stores are fairly simple in layout, they may be a very desirable option for merchants who simply want to make their products available online rather than fully commit to an e-commerce operation. PayPal does not offer a comparable service at this time, although it does offer solutions for already established e-commerce merchants through various service packages. At this time, Square wins this category for offering a free online store with easy setup and transparent pricing.

This one isn’t even close. PayPal offers live phone support and email support for its merchant services, although merchants do have to pay $159/month for “Enhanced 13×7” support or $495/month for “24×7 Premium” support if they want to avoid the wait times associated with the general customer service lines. Even so, a busy, slow customer service line is still more than Square offers its customers. Square customer support is conducted entirely via email exchange and is notorious for is slow response times and unavailability. In fact, the primary factor cited in merchant complaints about Square is the company’s near-complete lack of customer support.

PayPal and Square both offer straightforward onscreen guidance during installation and use of all of their payment services. Both companies’ customer-facing features include customizable prompts and simple instructions, largely sparing merchants the trouble of explaining these services to customers. Although the setup for PayPal’s traditional online payment option is slightly more involved than a simple “download and go” model, its business solutions generally require nothing more than a PayPal account for the merchant or customer. Square gets the nod in this category, though, for its simple, sleek card reader and its no-frills Register application, which is clearly designed with an eye toward easy setup and use. Convenient sign-up and installation is without a doubt the primary innovation offered by Square, and it’s enough to beat PayPal in this case.

Both Square and PayPal offer mobile card readers that are fairly reliable, well-designed, and reportedly secure. However, Square is showing far more complaints about service interruptions and incompatibility issues than PayPal is, despite the fact that PayPal is integrated in a wider variety of machines. Square’s complaint totals are almost certainly inflated by the fact that the company offers no customer support to quickly resolve device malfunctions, but this only makes service interruptions a more serious potential problem for Square users.

Square, on the other hand, edges PayPal in a handful of categories but ultimately cannot overcome its most glaring deficiency: poor customer support. Square’s commitment to transparent pricing and innovation for smaller merchants and individuals may someday make it an ideal payment processor for all merchant types, but not until the company builds a strong customer support system and clearer policies and practices regarding funding holds. For now, PayPal is the better option on the whole.

Square is renowned for the simplicity of its pricing: 2.75% per swiped transaction and 3.5% plus $0.15 per keyed-in transaction. That’s all there is to it; no monthly fees, setup fees, cancellation fees, or other bogus fees. Interestingly, though, PayPal Here slightly undercuts Square with a swiped rate of 2.7% and the same keyed-in rate as Square. When used in conjunction with the PayPal Payments Standard Pricing plan, PayPal Here also includes no other monthly costs.

PayPal’s cash transfer service, mobile wallet app, and point-of-sale solution are reliable services for merchants and customers alike, but they lack the innovation and ease of use offered by comparable Square services.

Square Cash is a new service offered by Square that allows for free peer-to-peer fund transfers from an attached debit card. Like PayPal’s traditional transfer service, Square sends payment information via email and takes about one to two days to process. PayPal’s transfer service, perhaps the best-known service of its kind, allows for peer-to-peer transfers between PayPal accounts, linked bank accounts, credit cards, and debit cards. However, PayPal charges a fee of 2.9% plus $0.30 per transaction for debit and credit card transactions. Because of this, Square just barely wins this category. For users who simply want to send money to a friend or associate, Square makes this possible through a free debit card transfer. For users who don’t mind the extra setup necessary for a PayPal account or linked bank account, PayPal is also a good option for free cash transfers.

The Square Register POS app offers analytics and payment reports, a customizable layout, loyalty programs, Square Wallet compatibility, multiple user support, and limited hardware compatibility (for receipt printers, etc.). PayPal Here offers check scanning, integration with multiple POS systems, and PayPal Mobile compatibility. Despite the greater potential compatibility and customer support offered by PayPal Here, Square appears to supply the more robust, ambitious free point-of-sale app at this time. PayPal may be a better option in Square in this section depending on which specialty POS systems merchants choose to integrate it with.

This provider has one of the most competitive pricing plans of any merchant account provider in the card processing industry. Fattmerchant also offers a month-to-month service agreement, no cancellation fees, no hidden fees, and processing options for virtually any business need. Add to all of this easy-to-use technology and top-rated customer support, and you can’t go wrong with this choice.

Both Square and PayPal have very low barriers to entry and emphasize their easy sign-up processes. This ease of setup comes at the cost of a lack of underwriting and approval processes that could save high-risk or ineligible merchants the trouble of sudden cancellation or fund holds down the line. PayPal edges Square on this front, though, for two reasons. For one, the PayPal Pro virtual terminal requires an additional application process for merchants, which marks the only service offered by either company that subjects merchants to review before signup. Also, as with so many other potential issues, reliable customer service can be invaluable to merchants in the event of cancellation or fund withholding. As noted repeatedly, Square does not offer live customer service.

So you are trying to choose between Square and PayPal. Which has the better pricing, customer service, device compatibility, and features for accepting card payments? Figuring all of this out can be a daunting task (this article took over a week to put together), but don’t worry, we’ve done the research and broken it down for you.

PayPal also offers three pricing plans with added features for each price increase: Standard (free), Advanced ($5/month), and Pro ($30/month). Overall, Square and PayPal both offer free monthly plans, but PayPal offers a greater degree of flexibility for larger merchants depending on sales volume and desired features.

Both the Square Wallet and the PayPal mobile payments app provide a free mobile wallet service to users. On the customer’s end, there’s very little distinguishing one service from the other, except for the fact that Square Wallet links to a customer’s credit card while the PayPal app can link to a customer’s PayPal account, credit card, debit card, or bank account. Both Square Wallet and PayPal are making inroads among merchants and gaining popularity, as Square recently signed a POS agreement with all Starbucks locations and PayPal continues to push its PayPal-linked payment card. Merchants will want to pay careful attention to the growth of both services before deciding to offer one or the other in their stores, but PayPal gets the nod for now due to its name recognition and wider array of payment options for customers.

This category is essentially a toss-up. Square offers next-day deposit of funds into a merchant’s bank account, while PayPal makes funds available to merchants almost immediately within their PayPal accounts. In order to withdraw money from their PayPal accounts, merchants must make a transfer request and wait approximately three days for the funds to be deposited. They may also be subject to ATM fees when making withdrawals using a PayPal debit card. Because of this, Square is the better option for merchants willing to wait a day for their money, while PayPal is the better option for merchants who don’t mind keeping most of their funds in their PayPal accounts and paying for or withdrawing money using a debit card. We’ll give this category to Square because the company doesn’t automatically impose an extra step between merchants and their money.

Neither Square nor PayPal charges PCI compliance fees or monthly minimum fees. The only hardware costs for mobile processing are the smartphone or tablets needed to use the apps. PayPal charges $79.99 for a USB card reader that can be used to swipe card via desktop computers for use with its virtual terminal. Square does not provide such an option. PayPal wins this section due to having more processing options at a relatively low cost.

PayPal’s per-transaction costs vary depending on a merchant’s monthly sales volume and the method of payment acceptance. Any payments swiped through the PayPal Here reader will receive the 2.7% rate, while online payments are scaled as follows:

 

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  • January 8, 2018
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