Square vs Stripe | Payment Options and Pricing Compared

Many business owners feel overwhelmed with so many decisions to be made when growing a business. The success of your business is often a direct result of the foundation set forth from the very beginning. 

We know that time can be scarce, so we have gone over some of the pros and cons of each platform to make it easier to determine which service provider will work best with your company. 

In a world where consumers are using cashless often, it’s becoming that much more important to provide a secure payment processor for both online and in-person transactions. 

As a business owner, you’ll need to sort through the plethora of services and platforms to narrow down what best suits your specific business needs. To begin, ask yourself a few important questions:

  • Will the majority of your payments be online or in-person?

  • Are you at risk for fraudulent purchases?

  • Will you accept payments out of the U.S.?

  • Are you tech-savvy?

  • Will you offer auto payments?

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That is a small example of the questions you should consider, but each business will have its own unique set of situations to bring to the table. In this article, we will help to outline the critical points of each payment processor so you can decide which perks appeal to you the most.

Similar in Many Ways 

First, let’s go over the many similarities between these two industry leaders. Both Square and Stripe are third-party payment processors or payment aggregators. This allows their users to provide more payment methods and eliminates the need to create their own merchant account to run payments. All of their users are considered sub-merchants and process transactions under their one single master account. 

There are times when creating your own merchant account is the best bet, but most startup businesses can benefit from a fast and easy way of accepting payments right away. Even if you are choosing a third-party payment processor as a temporary payment solution, you’ll want to be careful to choose the one that makes the most sense for your business. 

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An asset to choosing a leader in the payment processing industry such as Square or Stripe is the piece-of-mind knowing they are up to date on compliance with the Payment Card Industry (PCI). Just about every business owner wants to provide a secure process for their customers to make credit card payments, but in today’s world, it’s not always an easy task. 

There are more similarities than differences between the two platforms, so we will start by listing the key points to make it easier to see what you will be getting from both, regardless of which one you choose.

Both companies:

  • Have user-friendly platforms

  • Offer in-person, online/eCommerce, and recurring payments

  • Free hardware and software

  • Provide fraud prevention

  • Competitive pricing plans

  • No startup or hidden fees

Before we go into the differences, we think it’s important to note that both Square and Stripe charge one clear rate for each type of transaction, no matter which card type is used. This is especially important as Business Insider recently reported that Visa and Mastercard, the two largest U.S. card networks, are planning to raise the fees associated with processing their cards. Not having to dictate the type of card your customer chooses to pay with due to high processing fees is a huge advantage in our book. 

Additionally, both companies offer pricing models that are pretty close to the industry average. The U.S. chamber of commerce recently reported the average credit card processing fee is around 2% when swiped in person, but often closer to 3% for online or not-in-person payments. We found the average processing fees for both Square and Stripe to be between 2-3% as well.
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The Difference Between the Two 

Although the differences are somewhat subtle, they get more in-depth as you delve further. The fees are typically the most important thing a user wants to know when looking into a payment processor. As we mentioned, their pricing plans are not too far off from each other, but they’re broken down in different ways. Below you will see the key takeaways of each platform.

Square Pricing 

  • In-person: 2.6% + 10¢ on all tapped (mobile payments), dipped (chip cards), or swiped (magstripe cards) payment. 

  • Square Invoices: 2.9% + 30¢ using invoice feature (3.5% + 15¢ per Card on File transaction) 

  • eCommerce: 2.9% + 30¢ (payments using Square Online Store, eCommerce integrations, or online payment APIs) They do offer a lower rate of 2.6% + 30¢ for Premium Plan users. 

  • Card-not-present, virtual terminal, or card on file transactions: 3.5% + 15¢ (lower rate of 2.6% + 10¢ is offered for swiped transactions using the virtual terminal) 

  • Terminal API and Reader SDK transactions: 2.6% + 10¢ (payments via your custom-built point of sale, attended kiosk, or any in-person payment for your business.) 

  • In-App Payments SDK transactions: 2.9% + 30¢ (payments taken with your business’s mobile app.) 

  • Online Payment APIs transactions: 2.9% + 30¢ (every payment you take using their eCommerce integrations or online payment APIs.)

Square is great for businesses of all sizes and offers a variety of tools to streamline your workflow. In addition to offering an easy way to accept credit card payments, they offer payroll services, employee scheduling, email marketing, and customer loyalty programs, just to name a few. 

In addition, Square offers free POS software which is huge for brick-and-mortar businesses with a small team. Features such as inventory management and sales reporting are invaluable. Their user-friendly platform makes it super easy to integrate complex features into your business without taking too much of your time.

Stripe Pricing 

  • In-person: 2.7% + 5¢ on all in-person card processing including Apple Pay and Google Pay. (+1% for international payments, additional 1% for currency conversion) 

  • Cards and wallets: 2.9% + 30¢ (+1% for international payments, additional 1% for currency conversion) 

  • Bank debits and transfers: 0.8%  / $5.00 cap to process large payments or recurring charges with ACH debit, ACH credit, or wire transfers. 

  • Additional payment methods: starting at 80¢ (with a single integration, you can process popular payment methods from around the world) 

  • Billing: 2.9% + 30¢ on recurring payments (plus 0.5% after first $1 million) 

  • Instant Payouts: 1% of Instant Payouts volume | Minimum fee of $0.50

Stripe offers a lot more payment options if you plan to accept international payment methods or need to convert currencies. One notable difference is that Stripe can process ACH debit payments made in the U.S., whereas Square cannot.

The categories are broken down even further for those that are developer-minded if you are interested in things like 3D secure authentication or adaptive acceptance. They provide the tools for embeddable checkouts and simplified PCI compliance.

If some of those terms don’t make sense to you, it’s likely that your business does not need to utilize those features at this time. At least you have an idea of the types of services offered should you need them in the future.

Finally, if you want a professional to help you decide which payment processing option to go with, turn to one of the formations services and registered agents services we really trust.

Reliable Business Formation Services


Nolo is a well-know online service in the business that helps with legal matters and legal document requirements from all over the USA. And because Nolo has a massive library of legal forms, you can customize other relevant documents needed in writing a Sales Contract, firing your current attorney, or lease paperwork. 

Rocket Lawyer

The amount of work Rocket Lawyer puts into their customer satisfaction is incredible. Their expertise and user-friendly interface will win you over. With exceptional customer service, this is the type of company you hope to do business with. There are two ways to get support – through their website of their neat app.


Compared to other services, ZenBusiness gives you more value for your money. They make the entire process straightforward and are not looking to charge you additional services. Also, their ZenBusiness Pay-It-Forward program for women and minority-owned businesses is fantastic.


Apart from competitive and admirable plans that offer options that you’d be hard-pressed to find anywhere else, IncFile offer their services for free with their starting package which is nothing short of amazing. Incfile is one of the most affordable online services, extremely reliable, and they bring to the table great deal of features that are needed when starting a business.


We wholeheartedly believe that both of these payment processors are great in their own right. However, choosing the one that’s best for you and your business is going to be a personal choice. 

You will need to start by looking at the basics of your business first. Take note of how you will be processing the bulk of your payments. This will help eliminate any confusion related to comparing fees between the two.



We found that Stripe offers a higher number of payment options but that it may be too complicated for the average business owner. Square has fewer variables but perfectly capable of servicing the majority of small businesses, whether online or in-person. 

In our opinion, Stripe is better suited for the market of tech-savvy startups with a lot of online or eCommerce sales and developers at their disposal. Square is a great option for busy small business owners, needing a variety of services with little to no legwork. 

Again, the way you plan to bill the bulk of your customers should be of top priority when making your decision. The difference in these fees can add up to big savings when applied appropriately. 

If you are having a hard time deciding, I will take advantage of their sales team before choosing one over the other. Although there are no cancelation fees with either company, it would be best to avoid any headaches down the line if possible.

We hope you have found this article to be helpful when deciding which payment processor is best for your business.

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