Stripe vs Square – two of the most popular payment processors for entrepreneurs. While they do the same basic thing – process payments – they both take a unique approach. In this comparison I’ll map out the differences and the pros and cons so you can see which of these two powerhouse payment processors fits your business best.
I’ve personally used both Stripe and Square for many years. While they might seem similar from the outside, they’re actually quite different.
Here’s how the difference feels…
Stripe feels like it’s more for online businesses, startups, and tech companies.
Square feels like it’s more for brick and mortars, freelancers, and on-the-go entrepreneurs.
Right off the bat I’ll tell you this: If you’re running an online business or doing a good portion of your business online, Stripe integrates with way more of the tools of you’re likely going to be using. I rarely see Square integrations in the various software platforms and apps that I use.
This is no surprise considering that Stripe was originally created to process payments on the internet while Square was originally created to process payments on mobile devices.
Over the years, though, the Stripe vs Square gap has closed significantly and now both processors have many overlapping features and some entrepreneurs and small businesses can easily feel stuck in the middle.
To help you decide, let’s do a full Stripe vs Square breakdown…
Stripe will tell you very clearly on their home page who they’re targeting: “Stripe is the best software platform for running an internet business.” If that’s you – if you run an internet business – then I would go with Stripe hands down.
If you’re not completely an internet business, then let’s continue.
Stripe’s Design & User Experience
I don’t know about you, but I really love and prefer to use beautiful software. If an app looks like trash, I don’t want anything to do with it. And I have pretty high standards.
Now that you know that, what I’m going to say next should hold a lot of weight. Stripe is one of the most beautiful pieces of software I’ve ever used and it’s very intuitive.
Let’s take a look…
The Stripe dashboard is super clean and tells you a lot at a glance and the navigation on the left helps you get to the most important parts of the system quickly.
Refunding customers is easy, whether you’re issuing a full or partial refund. Changing a client’s billing, adding products, generating invoices, and adding notes are all easy, quick, and intuitive.
One thing that was missing from Stripe for a long time was invoices. It was recently added and they’ve done a great job with it. Here’s the invoice creation screen…
It’s great that if you already have a payment on file for the client, you can bill them automatically. If not, the client can pay easily directly through a link in the email they receive.
I personally love this feature. Sometimes I work out custom payments for clients. Setting these custom payments up in Thrivecart is messy when I’ll only be using that payment option for a single person. Shooting the client an invoice through Stripe is a perfect way to handle this.
This is one of those areas where Square used to soundly beat Stripe, but not anymore.
Other Important Stripe Features
- Stripe Supports Apple Pay. If a customer is on a mobile device that supports Apple Pay, they can use it to make payments without having to get out their card and type in any information.
- Stripe Mobile App. Stripe has a free mobile app to manage your clients, payments, and invoices on the go. It’s just as beautiful and intuitive as their desktop app. Seriously, it brings me joy to use it. It’s especially useful for letting you know when payouts are going to land in your bank account.
- Stripe Extensions & Integrations. This is an area where Stripe completely obliterates Square. The sheer amount of integrations and extensions, thanks to Stripe’s powerful API, are second to none.
Unfortunately, Stripe doesn’t have its own POS system or mobile device the way Square does, so if processing payments live and in person by swiping cards is necessary for your business, Stripe isn’t gonna cut it unless you find third party hardware that integrates.
Since I don’t have any knowledge in that area, I won’t comment any further. Stripe wasn’t originally designed to be a POS-style payment processor, so if your business is POS (point of sale) heavy, I’d have to recommend Square.
Stripe Fees: How Much Does Stripe Charge?
I love Stripe’s no-b.s. setup process. It’s very easy to open an account with them and there are no setup fees, no monthly fees, and no hidden fees.
When you’re just starting out, Stripe will process payments for 2.9% + 30 cents per transaction. Payouts happen on a 7-day rolling basis to the bank account of your choice or you can opt for monthly payouts if you’d like your payouts to come in bulk.
For international cards, there’s an additional 1% fee per transaction.
It should be noted that if you’re a high volume business, they do offer enterprise rates that are much lower and – I believe – 48 hour rolling payouts.
Alright, on to Square.
The reason I originally got a Square account was for invoicing. However, now that Stripe does invoicing I find myself not using Square much at all. Keep in mind though that my business is completely online. If I was doing any offline payments or POS-style payments, then I would likely be using Square a lot more.
And as you’ll see, Square is much more than just a payment processor. If you run a more traditional business, some of Square’s other features might be extremely valuable to you.
Let’s dive in…
Square’s dashboard is much more basic than Stripe’s, but it’s customizable in terms of what you can display and the order your information is displayed in.
As with Stripe, all the important stuff is easy to find via the left hand navigation and there are really no quirks or issues with any of the client management side of things.
Square offers a little bit cleaner of a process for creating invoices than Stripe, but there’s not a huge difference.
Personally, I don’t think there’s a clear winner here. Both do invoices and both have basically the same exact process for sending those invoices and collecting payments.
Square Stand, Square Reader, and Square POS Hardware
Here’s where Square starts to stand head and shoulders above Stripe. They offer a ton of POS hardware to make your offline sales life enjoyable.
A Square Stand package comes with the Square Stand (a fancy iPad dock) and a Square reader (with contactless transactions and chip dock).
You can also hook up other hardware such as receipt printers, barcode scanners, and cash drawers.
Square Virtual Terminal
If you don’t want to invest in the POS system, but you still want to run POS style payments, you can do manually entry through Square’s virtual terminal which is basically a browser-based POS system.
Square E-Gift Cards & Square Plastic Gift Cards
Are you in a business where gift cards are popular? Square allows you to issue “e-gift” cards – digital gift cards – that can be used via your Square online store (more on that in a moment) or your Square invoices.
Even better, you can order plastic gift cards that customers can use via your Square POS system or through digital payments.
Square Loyalty Program
Along with gift cards, Square has a built in loyalty program that uses “stars” that are earned according to a number of visits, amount spent, or by item/category.
You can set up the loyalty program however you’d like and create incentives for people to join (like a certain number of stars for giving you an email address).
Stars can be redeemed for discounts or free stuff and your loyalty program can even be confined to specific business locations if you have multiple locations.
Square Online Store
Square isn’t a full-scale e-commerce platform like Shopify or Woocommerce, but it does give you the ability to make your products available for purchase online.
It should be noted that Square does integrate with Woocommerce, so if you want a full-scale platform, that’s an option for you.
If you want to sell online but don’t want to setup a really robust e-commerce system, Square will probably be perfect for you. They have a bunch of different themes to choose from which are nice and clean out of the box.
Square Timecards and Square Payroll
Need Payroll for your business? Square has a built-in payroll service…
Don’t worry, that’s fake data.
It has a mobile app to manage it, too, along with direct deposit for employees…
And timecards to keep track of employee hours…
Pretty slick, right?
Square Rates: How Much Does Square Charge?
Like Stripe, Square doesn’t have any setup fees, hidden fees, or monthly fees.
- Taking payments through Square’s POS hardware (Square Stand and Square Reader) is a flat 2.75%.
- Payments made through Square Register or Square Retail are 2.5% + 10 cents.
- If you’re a restaurant, the hardware – for some reason – clocks in at 2.6% + 10 cents.
- Typed in card payments, such as through Virtual Terminal are 3.5% + 15 cents.
- Invoices and e-commerce transactions clock in at 2.9% + 30 cents.
- Gift cards are 80 cents each.
- Payroll is $29/mo + $5/employee (or $0/mo + $5/contractor if you only have contractors).
- The loyalty program is $25/mo to setup.
While their pricing is more convoluted and hard to keep track of, they do next business day payouts which beats the pants off Stripe’s 7-day rolling payouts.
Also, If for some reason you need to get your money instantly, you can do so by paying a 1% fee on the payout.
What about the hardware pricing?
The square reader for mobile devices is free. If you want a reader that processes chip cards, it’s $29.
The contactless Square reader with a built-in chip reader is $49.
The Square Stand is $169 and the Square Register $999 + $49/mo (and there’s a hefty 24-month commitment on that).
Stripe vs Square: Surprise – You Might Need Both!
Depending on what you sell, your business might need both Stripe and Square. If you do a lot online, especially with other apps and systems that need to integrate with your payment system, Stripe is probably the way to go. But if you also do stuff offline and in-person, you would need a Square account to take payments in those cases.
- If you have an internet-only business, Stripe is the way to go for sure.
- If you have a mostly offline business, Square is your best friend.
- If you’re heavy into both worlds, you probably need both.
Have you used either system? Tell me about your experience in the comments…
Kevin Michael Geary is the founder of Digital Ambition. After building three successful online businesses in three separate niches in less than five years, he turned his attention toward helping men and women all over the world start an online lifestyle business so they can escape the rat race, make an impact, and live life without limitations.