Stripe vs Square – Battle of the Payment Processors

Let me guess—you are a business owner, or about to be one, and you found this article because you’re searching online for the best way to process digital payments. You can’t get paid if you can’t process payments, now can you?

Well, you’ve come to the right place! Full disclosure: I am not in love with all things technology. I’m a business owner that sees digital payment processors as yet another start-up cost I need to incur on my way to making my millions. I’m also a writer with a business and sales background that loves researching and reviewing best-in-class products.

So, let’s get started:

What Are Digital Payment Processors?

Digital Payment Processors (DPP) are just as they sound: digital services that enable you to invoice and collect payments from customers both in person and online. This simple diagram from payroll blog Wagepoint shows where payment processors fit in the sales cycle:

Who Uses Them?

There is no “typical” customer for these kinds of processors; you see freelancers and small business owners use them alongside mid-size businesses and the enterprise sector. With the prevalence of smartphones and tablet technology, these digital processors have become popular as the convenient, user-friendly, and cost-effective way to process transactions.

Why Are They Popular?

Many people love DPP because they are mobile, and much cheaper than the expensive digital payment processors used by big box stores.

How you use DDP technology depends on your business. Some cash-based businesses may only see charges occasionally, while others process hundreds each day. An owner must consider the overall cost including projected fees based on transactions, and the anticipated accessories and support they will need before deciding on a system.

Let’s compare two popular digital payment processors: Square and Stripe. Both companies offer digital payment processors among many other SaaS and hardware solutions, but to keep this article interesting and under 20 pages, let’s just compare their digital payment processors.

Before we get started, what’s your platform?

Stripe vs. Square: Platforms

Both Stripe and Square are supported on web, iPhone, and Android platforms. Sorry Windows Phone app enthusiasts; it’s time to look elsewhere.

Platforms Supported Stripe Square
Web based  X  X
iPhone app  X  X
Android app  X  X
Windows Phone app



About Square

Square predominately markets to small businesses that want a digital processing solution like their larger counterparts without the big-time fees they pay. Known for their simple and straightforward pricing and design, Square’s “Make Commerce Easy” slogan says it all: their mission is to provide simple ways to process payments using smart technology.

How It Works

The free Square magstripe reader (Square Reader) plugs into your smartphone or tablet allowing you to create a mobile point-of-sale solution.

Using your smartphone or tablet, you download the free Square app and create your online storefront. As a Square customer, they allow you to sell online on their site, with third-party e-commerce sites, and on your own site (using integrations for Woocommerce, Shopify, etc..). Since your items are embedded on your site, your customers don’t have to leave to complete their transaction.

With all three options, you get next day deposits, can accept all major credit cards at one low rate, and you can integrate reporting and inventory with your offline sales.

How Much Does Square Cost?

Square charges 2.75% per swipe, dip, or tap; and 3.5% + .15 cents per keyed-in transaction. If you pay online, it’s 2.9% + .30 cents. Online reviews said there are some discounts for larger businesses that guarantee more transactions, but Square does not list that pricing structure on its site.

It is free to launch your Square Online Store, and there are no monthly fees or hosting charges; you are only charged by transaction fee.

What Does Square Accept?

Square accepts Visa, MasterCard, Discover, and American Express for the same low rate.

Features include:

  • Same rate for all major credit cards
  • Deposits as soon as the next business day
  • No monthly fees
  • Instant deposits available
  • No commitments or contracts
  • Chargeback protection
  • Full PCI compliance included
  • Payment dispute assistance

Here are other benefits Square includes for free: 


About Stripe

Stripe is a digital payment processor initially built to create custom payment solutions for developers. Based in Ireland, the company operates in over 25 countries and allows both private individuals and businesses to accept payments over the internet.

How Stripe Works

Stripe provides friendly APIs, or Application Programming Interfaces, that allow businesses to accept and manage payments using mobile devices. They do not require customers to open a merchant account or set up a credit card payment gateway. Their credit card processing is based on enabling your app to take a payment from credit cards through a form.

According to online reviews, Stripe is known as known for its simplicity and ease of use.

Stripe claims on their website that:

  • Their success is measured on how little payments code a developer writes to process a transaction.
  • They have the best payment flow on the web and mobile thanks to their customized “Checkout” that features an embeddable payment form that is optimized for conversions.
  • Their unified platform supports new tools like Apple Pay and accepts 135+ currencies.

Here is something cool about Stripe: with one line of JavaScript, you can drop a customized form in your Stripe account, and it will work across browsers and devices, support new payment types, and speaks eight languages.

AppCoda, a leading tutorial site for app developers, gives a great tutorial on how Stripe works and uses this infographic to illustrate the flow of information:

  1. Your app collects payment information like credit card number, expiration date, CVC, payment amount and email from your payment form and sends the data to the Stripe backend by calling its API.
  2. If the payment information is verified, Stripe sends you a token. This token signifies the payment will clear but does not complete the transaction at that time.
  3. Now your app will send the token to your private server to complete the transaction. Stripe does not complete the transaction through mobile devices due to security concerns, but instead provides a server code to implement the charging process.
  4. Your web application sends the token to Stripe to complete the transaction.
  5. The server side sends a response back to the app about the transaction result.

Phew. It’s a lot to digest for someone new to digital payment processors, but it helps you understand the difference between using Square’s magstripe reader to perform a transaction and manually entering a sale using Stripe.

How Much?

Stripe’s fee is 2.9% + .30 cents per successful charge.

Stripe has no setup, monthly, validation, refund, card storage or failed payment fees. In other words, no extra fees other than per transaction.

You’ll never have to decipher a complex statement because you know what you’re charged in advanced based on your transaction history.

But Wait, There’s More!

Its features include integrated mobile payments for iOS and Android, checkout, recurring billing options, and the ability to add promotional codes and discounts.

Accepted Methods of Payment

Stripe is a global digital payment processing solution, working with over 100 currencies, bank accounts, as well as Bitcoin and local payment instruments like Alipay. Payment services are also accepted like AmEx Express Checkout, Android Pay, and Apple Pay.

Stripe vs. Square: Features

Here’s your cheat sheet: 

Features Stripe Square
Customizable Reporting  X
Electronic Payments  X
Free Trial Available  X  X
Freemium Account  X  X
Invoices  X  X
Total Integrations       184       28
Multi-Currency  X
Partial Payments  X  X
Recurring Billing  X  X
Sales Reporting  X  X
Subscription Based
Third Party Integration  X  X

Final Verdict – A Clear Winner?

Square is a good option for new business owners or those that don’t process charge cards very often. It is scalable, reliable since it can process payments offline, and easy to use. For those unsure about how many credit card transactions to anticipate, and aren’t familiar with new technology, Square is the digital payment processor for them.

Stripe is the winner for more established businesses looking to tap into foreign markets by expanding their e-commerce platform. It accepts more than 100 currencies, features integrated mobile payments for iOS and Android, and is the best global payment option since it accepts over 100 currencies including Alipay, and Bitcoin. Its features and total integrations also win when stacked up against Square that is more simple and straightforward.

Both digital payment processors will get the job done; it just depends on how you use it and how vast your empire grows. Either one will help your business close the deal, giving your customers a convenient, easy way to pay.

Related Comparison: I also compared to Stripe recently here, in case you were considering as well.


  1. The Wei:

    Great article, thanks for sharing.

    I think you made a mistake in this sentence – and meant to say, “there are no,” rather than what you did say:
    “It is free to launch your Square Online Store, and there are monthly fees or hosting charges…”

    Cheers, Kimi


    • DigitalMerchant:

      Thanks Kimi for spotting that error. I’ve fixed it now!


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