Stripe vs Square: How to Choose a Payment Processor?

Deciding between Stripe vs Square is an important decision for any business owner starting out. In this article, we’re going to share everything you need to know to navigate between both options.

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Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

  1. Stripe vs Square
  2. What Are the Disadvantages of Stripe and Square?
  3. What Should I Know About Stripe and Square?
  4. Frequently Asked Questions
  5. Ready to Open Accounts With Banks in the USA?

Stripe vs Square

The main difference between Stripe and Square is the type of businesses that the two companies cater to. Stripe primarily serves online payments with integrated payment processing while Square focuses on both online and brick-and-mortar businesses with both hardware and software solutions.Β 

Additionally, while both companies offer a payment gateway and merchant services to e-commerce platforms, Stripe offers far more API integration and customization for developers. On the other hand, thanks to its hardware, Square offers payment solutions for businesses seeking point-of-sale systems.

Of course, any comparison should also include a discussion about the pros and cons, features and benefits, payment processing fees, and answers to common questions. We’ll cover all of this and more in the following sections of the article.

But first, if you’re looking for another digital wallet payment processor, Cash App for a business account might be worth considering and you can learn more about this platform by clicking the link here.

Alternatively, if you have a US business and you want to select how your entity will be treated for tax purposes, you will need to fill out an 8832 Form with the IRS.

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What Are the Disadvantages of Stripe and Square?

The main disadvantages of Stripe and Square are similar to the disadvantages that most business owners expect from online and digital financial service providers. This includes limited customer support, account freezes, fund holds, and hard-to-navigate fee and pricing models. Additionally, to process payments through Stripe and Square, businesses need an active internet connection.

Disadvantages of Stripe

One of the most common disadvantages of Stripe that business owners reference is the frequency of fraud alerts. Fraud prevention plays an important role in financial services, and Stripe is leading many efforts to integrate effective fraud prevention into digital payment processing. As a result, customers may feel that they have a higher instance of fraud alerts than on other platforms. However, they may also have lower chargebacks and fewer claims against their accounts as a result.

Disadvantages of Square

One of the main disadvantages of Square that business owners reference is the cost of processing payments. While the fees are initially manageable and transparent, they become less cost-effective after businesses start to scale. Unlike Stripe, Square charges a fixed fee per transaction and does not offer a scalable pricing model. That said, Square does offer an easy and transparent fee structure for businesses getting started.

What Should I Know About Stripe and Square?

Stripe and Square are both payment processing companies that enable businesses to accept payments from their customers in exchange for goods and services. While Stripe and Square initially focused on separate target markets, there is now more overlap in the businesses that they cater to.

Here is a brief overview of both companies.

What Should You Know About Stripe?

Stripe is a payment processing company incorporated in the United States of America with offices in twenty different locations around the world. The company is led from two headquarters, one in San Francisco and the second in Dublin Ireland. At present, Stripe has over 4,000 employees, serving customers in 46 countries.

What Should You Know About Square?

Square is a payment processing company incorporated in the United States of America with offices in five different locations around the world. The company is led from its headquarters in San Francisco. At present, Square has over 3,800 employees, serving customers in five countries.

What Is the Difference Between Stripe vs Square Fees?

The main difference between Stripe and Square in terms of fees is how they approach their fee structure. For example, Stripe offers a more flexible and customizable fee structure, which can scale with businesses as they grow and can be negotiated at higher volumes. On the other hand, Square has a more straightforward fee model that involves a fixed percentage on all transactions.

What Do Square and Stripe Offer?

Stripe and Square offer small business owners the opportunity to start accepting payments from customers around the world. They do this in a frictionless manner that avoids upfront expenses and focuses on helping business owners start accepting customer payments as soon as possible.

Frequently Asked Questions

Below are five of the most common questions we receive from people looking into stripe vs square. If you have further questions you would like to ask our team, don’t hesitate to get in touch.

Is it Better to Use Stripe or Square?

Whether it is better to use Stripe or Square depends on your preferred method for receiving funds from customers, how much customization you want in terms of website development, and the level of customization that you want for the fee structure.

What Are the Differences Between Stripe and Square?

The main differences between Stripe and Square include the businesses that they primarily cater to, how they allow businesses to accept payments, how they integrate with a business’s website, and their payment processing fees. There are also several differences in terms of the additional features that both Stripe and Square offer, including integration with inventory systems, scheduling, and API integrations.

Should I Use Square or Stripe for a Small Business?

Whether you should use Square or Stripe for your small business will depend on the type of business you have, how you plan to accept payments, the level of customization that your business requires to implement payments, and more. It’s important to directly compare all of the payment processing options available to you when choosing a payment processing solution. Additionally, you should be sure to review the fees carefully.

Do Big Companies Use Stripe?

Yes, several big companies use Stripe for payment processing, including popular online marketplaces, transportation apps, communication platforms, e-commerce providers, and more. Additionally, it is common for many small businesses to use Stripe, and then in time scale their businesses into large ventures and continue using Stripe after they have reached higher turnover.

Are Square and Stripe Similar?

Yes, Square and Stripe are similar in that they both enable businesses to accept payments from customers. However, they differ in the businesses that they primarily cater to, the way they enable payment processing (hardware vs software), and the fee structures they employ.

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GlobalBanks Team
GlobalBanks Team

The GlobalBanks editorial team comprises a group of subject-matter experts from across the banking world, including former bankers, analysts, investors, and entrepreneurs. All have in-depth knowledge and experience in various aspects of international banking. In particular, they have expertise in banking for foreigners, non-residents, and both foreign and offshore companies.

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