Square vs PayPal: Which Payment App Is Better for Small Businesses?
Published May 27, 2025 · 7 min read
If you run a small business, getting paid fast and easily is essential. Two big names dominate the space: Square and PayPal. But while they offer similar services, their strengths are very different.
In this comparison, we break down how Square and PayPal stack up for small business owners in 2025 — covering fees, features, and flexibility.
💵 Payment Methods
Both platforms accept credit cards, debit cards, and digital wallets like Apple Pay and Google Pay. Square also lets you accept payments offline with their reader, while PayPal is more popular for online and invoice-based transactions.
📦 Product Features
- Square: POS system, mobile reader, inventory tracking, employee management, invoicing
- PayPal: Online checkout, subscriptions, invoices, PayPal.me, working capital loans
📈 Business Type Fit
Square is best for brick-and-mortar or pop-up shops that need POS and hardware. PayPal is ideal for e-commerce, service providers, and anyone sending digital invoices.
💳 Fees
Fees are similar but differ slightly by transaction type. In general:
- Square: 2.6% + 10¢ per swipe; 2.9% + 30¢ online
- PayPal: 2.99% + 49¢ for most online payments
🙋♀️ Which Should You Choose?
- Use Square if you sell in-person, at markets, or in a storefront
- Use PayPal if your business is primarily online or invoice-based
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