Online payment processing is the process by which a business accepts electronic payments such as credit cards and debit cards.
These transactions are routed through a third-party provider, called an online payment processor.
Stripe vs Square
What Are Stripe vs Square
Stripe vs. Square is a battle of the two main companies that provide payment processing services in the United States. Both companies were founded in 2010 and are based in San Francisco, California.
Stripe is a web-based payments platform that allows businesses to accept payments online and in-app, as well as via e-mail.
Square, on the other hand, is a mobile payment processing company that allows small businesses to process credit card transactions through their smartphone using a square reader device or via their iPhone app.
It does not offer any payment processing services for merchants who do not have a smartphone or tablet device.
What Is An Online Payment Processor?
Online payment processors are responsible for collecting the money from the customer and transferring it to your business’s bank account.
Why do you need an online payment processor?
Accepting payments online is one of the most important tasks for any business that operates over the internet.
You can use your own merchant account to accept these payments, but this isn’t recommended because you will have to pay a fee for every transaction made through your website.
However, if you want to save money and still accept payments from customers around the world, then you should use an online payment processor instead of setting up your own merchant account.
What types of services does an online payment processor offer?
An online payment processor provides many different services including:
- Handling all of your customer’s sensitive information securely and legally so that they don’t have to worry about anything except making their purchase.
- Providing fraud protection services in case something goes wrong during the purchase process.
- Guaranteeing refunds if there is any problem with their product.
Stripe vs Square: Battle of the Payment Process
When it comes to online payment processing, there are two primary players you should be considering: Stripe and Square.
Stripe is a global payments company that lets businesses accept payments online. It’s used by more than 500,000 businesses globally, from Kickstarter to General Electric.
The company was founded in 2010 and has raised over $600 million in funding from investors like Sequoia Capital and PayPal.
Square is also a payments company, but it’s focused on helping small businesses accept credit cards with their smartphones or tablets. It was started by Jack Dorsey who also cofounded Twitter in 2009 as a way for him to accept tips via text message while performing stand-up comedy at bars around New York City.
Today, Square is used by more than 7 million small businesses across the United States, Canada and Japan.
Stripe vs Square: Setup and ease of use
Both Stripe and Square make it easy to get started with their services. Both offer a free tier, which is great for small businesses. Both also have relatively simple setup.
Stripe requires you to set up an account and then link your bank account or credit card through Stripe’s website. You won’t need to install any software or hardware on your computer, but you will need to enter some information about your business.
Square’s setup process is similar, but it requires an additional step of installing its mobile app before linking a bank account or credit card.
Once installed, the app walks you through linking each service you want to use with Square including taking photos of receipts.
Stripe vs Square: Pricing
The most important feature of any payment gateway is its pricing structure. The pricing model of both Stripe and Square is based on transaction volume the more transactions you make per month, the lower your per-transaction fee.
Both Stripe and Square charge a 2.9% + 0.30% fee for every successful transaction (i.e., one that doesn’t decline or get refunded).
While both companies offer their own free plans (which include some limitations), they also offer paid plans with no minimum monthly volume requirements so if you’re just starting out with your business and aren’t sure how well it will do, there’s no need to worry about paying any extra fees until you’ve grown into them.
In addition to their standard plans, both companies also offer more advanced features at additional cost. For example:
Stripe Payment Plans allow you to offer subscriptions through Stripe’s interface; they come with all the features of their standard plan plus subscription management functionality.
Stripe vs Square: Accept more currencies
Both Stripe and Square are popular payment processing platforms. They allow you to accept credit cards or other forms of digital payments from customers.
One of the biggest differences between Stripe and Square is that Stripe allows merchants to accept more currencies than Square does.
Stripe is available in over 130 countries around the world and supports payment methods in 20 different currencies. This means that you can accept payments from all over the world without having to worry about currency conversion fees.
Stripe vs Square: Chargeback protection
Both Stripe and Square offer chargeback protection. This means that if a customer files a chargeback, then you won’t be responsible for the money lost.
The credit card processors will take care of it.
However, this is where the similarities end. Stripe and Square have different policies regarding chargebacks, and they’re not exactly the same.
Square’s policy is more straightforward than Stripe’s: You don’t need to worry about chargebacks until your business reaches $250k in annual revenue or 100 transactions per month (whichever comes first).
Once you hit these thresholds, you must pay an additional $15/month for each card processor you use on your account. If you reach those thresholds with more than one processor (say, if you accept Visa and MasterCard), then you pay $15/month for each one of them as well.
Stripe vs Square: Customizing your presence
Stripe and Square are two of the biggest names in payment processing. They have a lot in common, but there are some differences between the two.
Stripe and Square are both great for getting your business off the ground, but as you grow, you may find that one offers more advanced features than the other.
Stripe is known for its ease of use and simplicity. It’s a great choice if you want a simple solution that works well with most major payment gateways, such as PayPal and Apple Pay.
Square is known for its mobile app and its small hardware devices like Square Cash Register and Square Stand.
It’s also an excellent choice if you want to manage inventory through your POS system (though not all merchants will need this).
Stripe vs Square: Other features
Stripe and Square offer more than just payments processing. Both platforms can be used to accept donations, subscriptions and pre-orders, as well as handle invoicing.
But there are some notable differences between them.
Stripe offers a wide range of APIs for developers to integrate with their apps and websites. You can use Stripe’s API to process payments using other payment methods like ACH or bitcoin, as well as create custom tools for your business.
Square Cash is designed to let you send money to friends via text message or email. It also has a feature called Cashbot that lets you pay bills online including phone bills, utilities, insurance payments and mortgage payments though it only works in certain states at the moment.
Stripe vs Square: Other considerations before choosing a payment process
In addition to processing fees, you should consider other factors when deciding on a payment processor. While Stripe and Square are both popular options, there are some differences between them.
Stripe vs Square: Which one is right for you?
If you’re looking for a simple way to accept payments online and in-store, Stripe and Square may be the best options for your business. Both companies offer a variety of plans that will fit your needs and budget.
Both Stripe and Square have some unique features that set them apart from other payment processors. For example, Stripe offers free shipping labels for anyone who uses their service even if they don’t use Stripe’s other services.
You can also use Stripe’s API to integrate with third-party applications like Shopify or Mailchimp.
On the other hand, Square can help merchants increase their sales by offering promotional codes through its loyalty program called Square Offers.
Other considerations to take before choosing a payment process
There are other considerations to take before choosing a payment process. Here are some of them:
The cost of setting up and maintaining a payment gateway can vary widely. Some providers offer free solutions, but there are many affordable options with reasonable fees.
Fees can include monthly subscription, transaction fees, gateway setup fees and more.
You will want to make sure your payment process provider is secure and that they have a track record of keeping data safe from hackers or other threats. This can be difficult to do if your provider doesn’t allow you access to their source code or if they are not transparent about how they keep your data safe from unauthorized access or unauthorized disclosure.
Look into transaction fees
Transaction fees are a small amount of money paid to the people who validate transactions and add them to the ledger. These fees are paid to miners (who are rewarded in bitcoin for creating new blocks) on top of any mining rewards.
Transaction fees are set by the transaction sender, but may be modified by miners if there is competition for block space. Transaction fees may be collected from either the sender or recipient.
Transaction fees are voluntary on your part, but may be required by the person receiving the funds. To send money without paying a fee, you would have to find someone who’s willing to accept it without charging one.
Stripe vs Square – FAQ
What are the main differences between Stripe and Square?
Stripe is a payment processing service that lets you accept credit card payments online. Unlike Square, which only allows you to accept payments using your phone, Stripe lets you accept credit card payments on any device.
Stripe also offers a wider range of support for different countries and currencies than Square does. You don’t need to worry about currency conversions, either – Stripe will automatically convert payments from one currency into another based on the exchange rate at the time of purchase.
What credit cards does Stripe support?
Stripe supports all major credit cards: Visa, MasterCard, American Express and Discover. It also supports all major debit cards: Visa Debit/Credit Card, MasterCard Debit Card, and Maestro Debit Card with EMV chip (Dankort in Denmark).
Can I use Stripe to process international transactions?
Yes! Stripe automatically converts payments from one currency into another based on the exchange rate at the time of purchase so there are no foreign transaction fees when accepting payments across borders.
Is Square or Stripe better?
Square and Stripe are two of the most popular payment processors on the market. They both offer a range of features, but they don’t have a lot in common.
Square is an all-in-one solution for businesses that want to accept credit card payments. It offers hardware and software and comes with a suite of tools to manage your business.
Stripe is best for companies that already have a website or app and want to accept credit card payments online through their existing platform.
It’s also great for companies that want to sell products online without having to manage inventory or fulfill orders themselves.
It’s not just about which one you like better; it’s about finding the one that fits your needs.
If you’re just starting out, Square might be the best choice because it’s easy to set up and use, but if you have an ecommerce store or complex sales process, then Stripe might be better suited for your business
What’s the difference between Stripe and Square?
Stripe and Square are both payment processing tools, but they’re very different from one another. The biggest difference is that Stripe is a software-as-a-service (SaaS) product, while Square is an app you install on your computer.
Stripe has three main features:
- Accepting payments – You can use Stripe to accept credit cards and other forms of payment through your website. This can include one-time payments as well as subscriptions.
- Managing subscriptions – Stripe also lets you set up recurring subscriptions for customers who want to pay monthly or annually.
- Automating invoices – If you don’t want to handle invoices by hand, Stripe can automatically send an invoice to each of your customers once they subscribe or make a purchase.
Can Stripe or Square accept in-person payments?
Stripe and Square both let you accept payments online. However, neither of them offer in-person payment processing.
Stripe is a payment gateway that allows you to accept credit card and ACH payments through your website. It provides all the tools you need to process payments, including fraud detection and recurring billing.
Stripe also integrates with many other popular software platforms, including Shopify, WordPress and Salesforce.
Square is a mobile point-of-sale device that lets you accept credit card payments at your physical location or event. There are no monthly fees or minimums for Square; instead, you pay 2.75% per transaction plus 30¢ per card swipe (for swiped transactions) or 30¢ per keyed transaction (for keyed transactions).
Does Stripe compete with Square?
I’ve been following the Stripe vs. Square debate with interest ever since I heard that Stripe was getting into the POS space. This is a bit of an aside from my main work, but as I was reading through some of the comments on this blog post by John Collison (CEO of Stripe), it occurred to me that although many people have asked this question, no one has really answered it yet.
The answer is yes and no. Yes, they compete in different areas – Square is focused on point-of-sale software and hardware while Stripe offers payment processing software and other tools for developers.
But they also compete in some areas such as mobile payments and online marketplaces.
I think there are two big reasons why people ask if Stripe competes with Square:
- Because they’re both ‘mobile payments’ companies.
- Because both companies are backed by venture capital firms that invested in other companies that competed with each other (namely Square was backed by Khosla Ventures which invested in PayPal as well as Twitter.)
Do Stripe and Square support contactless paying including Apple Pay?
Stripe is a payment processing platform that allows you to accept credit cards and other payments on your website. It also has a point-of-sale (POS) app that allows you to process payments in person.
The POS app supports the Stripe card reader, which is compatible with Apple Pay.
The card reader itself costs $49, but you can use it for free if you sign up for Stripe’s VISA debit card or pay $0.30 per transaction if you use another card.
Square is another payment processing platform that accepts all major credit cards, including Visa and MasterCard, as well as Apple Pay. Square charges 2.75% of each transaction plus $0.15 per transaction for domestic debit cards and $0.30 per transaction for international debit cards.
You can get started with Square by creating an account online, downloading its app on your iPhone or iPad, and attaching a free reader to your device that plugs into the headphone jack.
Can I use Stripe or Square if I have a high-risk business?
Stripe and Square both offer businesses a way to accept credit card payments. But if you run a business that has high-risk transactions, such as selling alcohol or tobacco, then you might not be able to use these services.
This is because the payment processors have to comply with the Payment Card Industry Data Security Standard (PCI DSS), an industry-wide security standard. The PCI DSS requires all companies that handle credit card transactions to have a written information security policy in place. This includes requirements such as:
- Performing regular security audits
- Implementing strong access control policies and procedures
- Ensuring that all devices that store cardholder data are encrypted
Do these payment providers have loyalty programs?
Yes, these providers offer loyalty programs.
American Express offers Membership Rewards (https://www.americanexpress.com/us/small-business/smb/rewards). The program allows you to earn points for every dollar spent with American Express.
You can redeem points for gift cards, travel, merchandise and more. There is no annual fee for the card and there is no limit on the amount you can earn or redeem.
Do Stripe and Square support recurring billing?
Stripe’s Recurring Payments feature allows you to accept payments on a schedule that suits your business, whether it is weekly, monthly or some other frequency. You can set up recurring charges for any number of customers, and the feature supports both cards and bank accounts.
Square Cash supports subscriptions for sending money between friends and family members. You can set up recurring payments on your account page from any funds added through Square Cash.
The service also offers a $2/mo option for businesses who want to send multiple payments at once, but this is not a subscription service like Stripe’s Recurring Payments feature.
Stripe vs Square – Wrap Up
Stripe and Square are two of the most popular payment processors out there. They each have their own strengths and weaknesses, but they’re both great options for your business.
If you’re looking to make a seamless transition from PayPal, which is currently the only option for accepting credit cards in your store, then Stripe is probably your best bet.
It offers a simple solution that works with any e-commerce platform, including Shopify and BigCommerce.
You can even connect Stripe directly with your bank account using ACH (Automatic Clearing House) transfers.
This means no more waiting for payments to process or bounce backs from customers who need to correct their billing information after checkout.
On the other hand, if you’re looking for something more integrated than Stripe — such as Square — then that’s another story entirely!