In today’s app-filled world you have a lot of options to help you accept credit card payments at your small business. But how do you know which one is the the most affordable, fastest to set up, and most secure? And most importantly, which is best for your specific business needs? With so many choices, it can be hard to dig through all the details.
In this post, we’ll give you a comparison of two popular credit card payment options for businesses: Square vs. Stripe.
You’ve probably heard of both of these systems. Aside from PayPal (check out our PayPal vs. Stripe post for more info on that system), they’re the two most recognizable names in the payment processing industry. And they both work well for thousands of businesses. But, there are some differences in their features that you should consider before making a commitment to one or the other.
Square Features, Pros, and Cons
Payment Types
Square works with major credit cards and prepaid cards including Visa, MasterCard, American Express, Discover, JCB, and UnionPay
Accepting Online Payments
Square can be connected with several website and e-commerce systems so you can process online payments. The company has also acquired Weebly, so if you already have a Weebly store it’s easy to set up (although Weebly does also integrate with Stripe as well).
The downside of Square’s online payments is that if you want to build a customized checkout experience, the tools and documentation available aren’t as robust as Stripe’s.
Accepting Retail and Offline Payments
Square made its name on in-person payments for small retail and restaurants, so you can expect a solid set of features here, and their Point of Sale app is free, which is a great benefit. However, you should shell out for a credit card reader for either your smartphone or tablet, and you can expect to spend some bucks for one that works reliably and securely.
Square will send you a free magstripe card reader when you set up an account, however, even they say this technology is outdated and less secure. The more secure chip card reader will run you $49, and a full register set up can run you close to $1,000. If you only need to process credit card payments occasionally, those kind of up-front cost may not be worth it.
Ease of Use
Square’s dashboard and POS apps are very customer-friendly and easy to use, whether you’re looking for a transaction, want to send a customer a receipt, or cancel a sale.
Security and Reputation
While Square has an overall positive reputation, it has hit a few bumps in the road when it comes to security. Early on, they were hacked twice and as recently as 2018, tech media outlet WIRED continued to raise security concerns over the free card readers they provide.
Integrations and Apps
Square and Stripe have both been very smart about keeping their business models open to developers who want to extend their services. Square has also acquired 14 companies in the last several years with a definite trend towards tech supporting the restaurant and food delivery vertical.
Data Portability
Square won’t hold your customer data hostage like PayPal and some other companies do. However, if you set up a POS using Square, or use one of their partner apps to manage a subscription service, you should expect some work and re-entry down the road if you decide to switch systems.
Cost/Fees
Square’s fees are straightforward with a simple fee structure for both online and retail transactions.
- Monthly fee: $0
- Online Transactions: 2.9% + $0.30
- Retail Transactions
- Swiped transactions: 2.75%
- Keyed transactions: 3.5% + $0.15
- Card reader prices vary
The verdict
Square is a good option for small retail businesses and restaurants who are focused on in-person sales with enough sales volume to invest in a reliable card reader or register system. If you only need to run credit cards occasionally, or if your business blends online and in-person sales, Stripe may be a better choice for you.
Stripe Features
Stripe is a simple, secure, and powerful payment processor with a lot of options whether you’re interested in selling online, in-person, or a combination of the two.
Payment Types
Stripe works with all major credit/debit cards (Visa, MasterCard, American Express, JCB, Discover, and Diners Club). Customers can also pay directly via a bank account, which is great for service providers and subscription businesses.
Accepting Online Payments
Stripe integrates in just a few clicks with many web platforms like SquareSpace, WordPress, Wix, Shopify, Weebly, Volusion, BigCommerce, and others to easily accept online payments. If you want a completely custom online store/checkout experience, you can also work with a developer to access a host of additional features.
Accepting Retail and Offline Payments
Using an app like ChargeStripe makes it super simple to accept offline payments. Swipe, scan, or type in a customer’s card info and accept payments from anywhere on your smartphone.
Ease of Use
Stripe can really be as simple or as complex as you want it to be. The vast majority of small businesses will just need an account (here’s everything you’ll need to set one up) , an e-commerce shop like SquareSpace or Shopify that integrates with Stripe for online sales, and an app like ChargeStripe for offline and retail sales. These are all very easy to set up.
Security and Reputation
Stripe has really set the bar for payment processors in terms of security. Their set up never sends customers’ credit card info to your servers, so you don’t have to worry about storing credit card information securely, even if you have a developer create a custom online shop for you.
Integrations and Apps
Where Square has invested in the restaurant tech vertical, Stripe has doubled down on their core technology and security by acquiring 8 companies specializing in payment, POS, and authentication.
Stripe is also doing an amazing job attracting partners who use their system to create apps that help businesses in just about every category. In fact, ChargeStripe is a Verified Stripe Partner for mobile payments.
Data Portability
If you have subscriptions or recurring payments and you ever want to move to a different system, Stripe allows you to do this without having customers re-enter information.
Cost/Fees
- Online card transactions: 2.9% + $0.30
- Online ACH transactions: 0.8% (capped at $5) — this is an amazing option for small businesses that provide services like graphic design or marketing to regular clients.
- Retail Transactions: ChargeStripe charges an additional 1% per transaction, optional $99 card reader
The verdict
Stripe is a great option for all kinds of companies and industries. You can expect easy-to-use features and a growing list of app integrations that are very business friendly. And if you need a custom set up, the tools for developers are very robust.
Accepting credit cards by typing in a card number, or scanning with your phone’s camera mean you can get started taking payments fast. Setting up the ChargeStripe app takes about 5 minutes, and a card reader is completely optional.
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