Stripe vs Square

You'll need to accept credit cards online or in-person for your business to succeed. Both Stripe and Square offer multichannel opportunities, but there are some key differences. Keep reading to learn which company is right for you.

You probably know Square as a small, square-shaped card reader attached to a merchant's iPad or smartphone. But the platform offers much more, from e-commerce to on-demand payments.

Stripe may not be as well-known as Square, but it's still an e-commerce powerhouse. The platform thrives on internet-based payments but also offer in-person payments.

Which is right for your business? Read our head-to-head comparison to find out.

Payment Processing Features

Top Choice: Square (for ease of use)

Business owners can set up a Square account in just a few minutes with the following capabilities:

• Mobile Payments
  Square's credit card reader works with both Android and Apple smartphones, as well as other devices. You can automatically email receipts, offer tipping suggestions, and work offline if there isn't an internet connection.

  With Stripe, users can purchase a pre-certified card reader to accept credit cards on-the-go or in-store. However, you'll need coding experience to set up the Stripe terminal.

• Virtual Terminal
  The Square app, which operates as a virtual terminal, accepts keyed-in card payments. You can also turn your computer into a credit card reader by purchasing the Square Reader for magstripe.

  Stripe also offers a virtual terminal. But due to PCI compliance issues, they strongly discourage using it. Instead, they recommend that you use the Stripe terminal to accept in-person payments or send the client an invoice for online payment.

• Create an Online Store
  A Square online store gives you much more than just a virtual storefront. You'll have access to a powerful back-end that can fill orders, track inventory, calculate shipping and taxes, and combine multichannel reporting.

  With Stripe, you must use a third-party integration to create your e-commerce store. You can then use Stripe Connect to integrate your payments on your website, but you'll need a little programming knowledge to get it going.

Pricing

Top Choice: Tie

Stripe and Square both offer pay-as-you-go pricing systems—if you don't process any credit card payments, you don't pay any fees.

With Stripe, you'll pay:

• 2.9% + $0.30 per online or invoiced transaction

• 2.7% + $0.05 if you use the Stripe terminal, which starts at $59

• 3.9% to process international payments; Stripe offers free recurring billing on your first $1 million, then charges 0.4% beyond $1 million

With Square, you'll pay:

• A flat 2.75% for each in-person transaction, whether it's mobile, chip, or swiped; you can use the free Square reader, which is magstripe only, or purchase a chip reader for $49

• 2.6% plus $0.10 per transaction if you buy the Square terminal for $399

• 3.5% plus $0.15 if you need to key in transactions in the Square virtual terminal

• 2.9% plus $0.30 for invoice and e-commerce payments

Types of Payments Accepted

Top Choice: Stripe (for greater variety)

Stripe accepts all major credit cards, including American Express, as well as debit cards, Apple Pay, Google Pay, Microsoft Pay, WeCHAT Pay, and ACH transactions.

Square also accepts all major credit cards, including American Express, debit cards, and prepaid cards. You can also process Square Reward cards.

But Square does NOT accept ACH transactions or mobile wallet payments without third-party integration.

Invoice Options

Top Choice: Stripe

Stripe and Square both offer recurring invoicing options, including customized invoices, payment tracking, and payment reminders.

But Stripe goes a step above with its extra features. They offer invoices in over 130 languages and can automatically update any expired credit cards you have on file.

Hardware

Top Choice: Square

Square and Stripe both offer hardware options. But Square wins for their free credit card reader and multitude of options.

Square's free magstripe credit card reader attaches to your phone or tablet and can only process swiped credit cards. If you want to accept chip or contactless payments, you can purchase the Square chip reader and use it with your mobile device.

Businesses that handle a lot of in-person transactions may want the Square terminal or Square register. These options come at a higher price, but they offer greater capabilities if you process many cards in person.

Stripe offers two terminals. The VeriFone P400, a countertop reader, and the BBPOS Chipper 2X BT, which works with the Stripe mobile app. This isn't Stripe's "bread and butter," which is why Square is the top choice if brick-and-mortar sales are your main income.

Third-Party Integrations

Top Choice: Tie (depending on your resources)

Stripe offers more third-party integrations, though they require coding knowledge to implement. If you do have a programmer on staff, you have the ability to integrate many more functions, like accounting, shipping, inventory management, and more.

If you don't have a programmer, you may prefer Square's easier-to-use system. All clients get a free POS app that helps manage inventory, customers, employees, and run analytics. You can also pay for additional Square services, such as payroll and rewards.

In addition to offering third-party app integration, Square also offers select third-party apps that cater to specific industries, like healthcare, restaurant, and others.

PCI Compliance

Top Choice: Tie

You must protect your customer's information if you accept credit cards. This means using secure systems to protect their privacy. Both Square and Stripe manage the PCI compliance for you. If you follow their lead, you can avoid hefty fines and penalties.

Both platforms use hosted checkouts. In other words, customers handle the checkout process entirely on Stripe or Square's system. This takes the stress of managing the sensitive data in a PCI compliant manner off you. Both Stripe and Square's basic processing system are PCI compliant.

If you use Stripe to its full capacity and integrate third-party options into it, Stripe walks you through the PCI compliance steps. The platform also encourages caution when manually entering credit card information via the virtual terminal, as the risk of fraud is high.

Payment Frequency

Top Choice: Square

Square pays out funds faster. Most small businesses receive funds after a 36-hour hold. Once released, you should receive the funds within one to two business days.

If your store has different operating hours that puts your "end of day" after the cutoff for processing, Square offers custom payout frequencies.

Square also offers the ability to transfer funds to a Square Card. Once the funds are transferred, you can use them on the card or transfer them to your bank account, which can take one to two business days.

On the other hand, Stripe enforces a trial period of 7–10 business days for your first payout. Once the trial period ends, deposits occur on a 2-day schedule. That means all funds sit for 2 business days until Stripe pays them out, which may take another 1–2 business days.

Customer Support

Top Choice: Stripe

Stripe offers 24/7 phone and chat support if you are a current Stripe user. However, they will direct you towards their FAQs to answer your question first. If you can't find your answers there, they provide you with phone numbers to contact customer support at any time of day or night.

Square has a community forum where you can ask (or answer) questions from other Square users. If you want to chat with an agent, you must first go through Square's support robot.

Bottom Line

Both Square and Stripe offer brick-and-mortar and e-commerce stores the ability to process credit cards. Both can grow with your business, so your choice comes down to the level of programming you desire.

If you have a developer on your team, you may enjoy the vast customization Stripe offers. For out-of-the-box simplicity, Square is your best choice.