Payment processing is the lifeblood of every business – it’s how transactions occur between a buyer and a seller. In the modern digital age, two companies, in particular, have stood out in the crowded field of payment processors: Stripe vs Square. These two giants of the industry each have their strengths, weaknesses, and unique features, so let’s dive into a thorough comparison to help you make the right decision for your business.
Stripe vs Square
| Stripe | Square | |
|---|---|---|
| Transaction fees | – European cards: 1.4% + 20p – Non-European cards: 2.9% + 20p | – Card-present: 1.75% – Online or card-not-present: 2.5% |
| Customisation | Highly customisable payment APIs | Limited to the options available in Square’s platform |
| Point of Sale (POS) | Does not provide POS hardware | Comprehensive POS system including hardware |
| Mobile payments | Supported through mobile-compatible payment forms | Supported through free mobile card reader |
| Online payments | Robust online payment APIs | Supported, with less flexibility than Stripe |
| Subscription billing | Advanced subscription and recurring billing features | Basic subscription and recurring billing features |
| Multi-currency support | Over 135 currencies | Limited to the country of the business’s location |
| Fraud prevention | Advanced machine learning algorithms | Standard fraud prevention |
| Business management tools | Limited; primarily a payment processor | Comprehensive suite of business tools |
While both Stripe and Square have their distinct advantages, the above comparison should provide an overview of how they match up against each other in different aspects. This comparison is meant to serve as a general guide, and it’s recommended to visit the respective websites of Stripe and Square for the most accurate and updated information.
Understanding payment processors
Before we can compare the two companies, it’s essential to have a basic understanding of what a payment processor does. At its simplest, a payment processor is a company that handles transactions between buyers and sellers. They take the payment details from the customer, verify the information, check the funds are available, and then complete the transaction. All this occurs securely and usually within a matter of seconds.
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Payment processors are crucial for businesses of all sizes. Whether it’s a global corporation or a local boutique, the ability to process payments quickly, securely and efficiently is vital to day-to-day operations.
Stripe – An overview
Founded in 2010, Stripe has grown to be one of the leading payment processors globally, priding itself on its developer-friendly offerings. They offer a suite of payment APIs (application programming interfaces) that businesses can integrate into their websites or apps. Stripe’s feature-rich platform is ideal for businesses that need a customizable, scalable online payment solution.
Key features of Stripe
- Customisation and flexibility: Stripe’s APIs are highly flexible, allowing businesses to tailor the payment experience to their specific needs. You can customise everything from the payment form’s appearance to the supported payment methods.
- Global reach: Stripe supports over 135 currencies, making it an excellent choice for businesses selling internationally.
- Subscription services: Stripe has robust support for recurring billing and subscription services.
- Fraud detection and prevention: Stripe uses advanced machine learning algorithms to detect and prevent fraudulent transactions.
- Payment options: Stripe supports a wide variety of payment methods, including debit and credit cards, digital wallets like Apple Pay and Google Pay, and even cryptocurrencies.
Stripe pricing
Stripe follows a pay-as-you-go pricing model. In the UK, for European cards, they charge 1.4% + 20p for every successful transaction. For non-European cards, the rate is 2.9% + 20p. Additional features, like Radar for fraud detection, come with their own costs.
Square – An overview
Square, founded in 2009 by Jack Dorsey, co-founder of Twitter, has grown into a major player in the payment processing sector. Square shines in its simplicity and ease of use, making it a popular choice for small and medium businesses (SMBs), particularly those with a brick-and-mortar presence.
Key features of Square
- Point of Sale (POS) system: Square offers a comprehensive POS system, which includes hardware to accept credit card payments in person. Their POS also has inventory management, sales reporting and more.
- Easy setup: Square is known for its simplicity and ease of setup. This makes it an attractive option for businesses with no technical knowledge.
- Card readers: Square’s free card reader allows businesses to accept card payments anywhere, making it great for mobile businesses or popup shops.
- Online payment solutions: Square also offers online payment solutions, allowing businesses to accept payments online or over the phone.
- Business management tools: Square provides a suite of business tools, including appointment scheduling, customer relationship management (CRM), and invoicing.
Square pricing
Square’s pricing is straightforward. For card-present transactions in the UK, they charge a flat 1.75% per transaction. For online and card-not-present transactions, the fee is 2.5%.
Stripe vs Square – The verdict
The choice between Stripe vs Square often comes down to your business needs.
If you run an online business with a global customer base, require customisation and scalability, Stripe might be the best option for you.
On the other hand, if you run a small to medium-sized business, particularly one that operates in-person, Square’s simplicity, comprehensive POS system, and business management tools might be more attractive.
It’s crucial to consider the transaction costs, especially if your business processes a high volume of payments. Square’s flat fees are simple and predictable, but Stripe’s percentage-plus-fixed-fee model could work out cheaper for businesses with smaller transactions.
In conclusion, there’s no one-size-fits-all solution when it comes to payment processing. Whether you choose Stripe, Square, or another option altogether, the most important factor is that it suits your business’s unique needs and operations.
FAQ
Stripe and Square are two leading payment processing platforms, providing tools for businesses to handle transactions both online and in person.
Stripe and Square process payments by facilitating the transfer of money from a customer’s bank account or credit card to a merchant’s account. They ensure the transaction is secure and the customer has sufficient funds to make the purchase.
Stripe is best suited for online businesses with global reach needing customisation, while Square is ideal for small and medium-sized businesses that operate in-person, offering a comprehensive Point of Sale system.
Stripe supports over 135 currencies, making it excellent for international businesses. Square, however, is more limited and typically works within the country of the business’s location.
Stripe charges 1.4% + 20p for European cards and 2.9% + 20p for non-European cards. Square charges 1.75% for card-present transactions and 2.5% for online and card-not-present transactions.
Yes, both Stripe and Square offer mobile payment options. Stripe supports mobile payments through mobile-compatible payment forms, while Square provides a free mobile card reader.
Stripe offers advanced features for handling subscription and recurring billing, while Square provides basic features for the same.
Yes, both Stripe and Square offer customer support. However, their support options and availability might differ, so it’s best to check their respective websites for the most accurate information.
Stripe uses advanced machine learning algorithms for fraud prevention, while Square provides standard fraud prevention mechanisms.
Yes, both Stripe and Square can integrate with a range of eCommerce platforms, accounting software, and other business tools.
Stripe is highly customisable, offering a suite of flexible APIs. Square is less flexible but is known for its user-friendly interface and simplicity.
Yes, both Stripe and Square use industry-standard encryption to protect sensitive data and comply with all relevant financial regulations to ensure transactions are secure.
Stripe does not provide POS hardware and is primarily geared towards online transactions. In contrast, Square offers a comprehensive POS system that includes hardware for in-person transactions.
Stripe primarily focuses on payment processing, while Square offers a suite of business management tools, including appointment scheduling, inventory management, sales reporting, and more.
Stripe supports Bitcoin, but Square does not support cryptocurrency payments.
Yes, both Stripe and Square offer invoicing services allowing businesses to create and send digital invoices to customers.
Yes, both Stripe and Square can be used for non-profit organizations. They both offer solutions suitable for accepting donations.
Yes, both Stripe and Square are equipped to handle high-volume transactions. However, it’s recommended to contact them directly for large-scale business needs.
Stripe and Square both offer reporting features that provide insights into sales, refunds, customer behaviour and more.
Yes, you can switch from Stripe to Square or vice versa if you need to. However, migrating payment platforms may require some technical work and adjustments to your business processes.