PayPal vs Square: Best Choice for 2025

Choosing the right payment platform can make or break your business in 2025. Both PayPal and Square are industry leaders, offering advanced tools for payment processing, financial management, and business growth.

While both solutions share similarities in payment processing, their pricing models, features, usability, and suitability for different types of businesses vary significantly. This detailed comparison helps you understand not just the “what” but also the “why” behind choosing one platform over the other.

By the end of this article, you’ll know which payment processor aligns best with your specific needs—whether you’re running a local coffee shop, managing an online store, or balancing both in-person and online sales.

Pricing and Transaction Fees: Which Platform Saves You More in 2025?

Pricing is often the most influential factor for businesses when choosing a payment platform. A few cents saved on each transaction can lead to substantial annual savings—especially for small and mid-sized businesses operating on tight margins. In 2025, PayPal and Square have updated their fee structures to stay competitive, but their approaches differ in ways that can impact your profitability.

PayPal’s Pricing Model

PayPal remains a strong choice for online businesses thanks to its global reach and flexible pricing tiers.

• Standard Online Payments: Typically 2.9% + $0.30 per transaction for U.S. card payments.
• International Payments: An additional 1.5% cross-border fee for foreign transactions.
• Micropayments Plan: Lower fixed fee for transactions under $10, designed for businesses selling digital goods or small-ticket items.
• Monthly Subscriptions: PayPal’s advanced merchant and invoicing tools start at approximately $30/month.
• Chargeback Fees: Usually $20 per dispute unless covered under seller protection.

PayPal’s fees tend to increase for businesses with frequent international transactions; however, its competitive rates for online sales and access to a massive customer base make it an attractive option for e-commerce stores.

Square’s Pricing Model

Square’s pricing is designed for brick-and-mortar businesses and businesses that process both online and offline payments.

• In-Person Payments:2.6% + $0.10 per transaction, which is slightly lower than PayPal’s standard online rate.
• Online Transactions:2.9% + $0.30 per transaction, similar to PayPal’s domestic online rate.
• No Monthly Fees: Square’s basic payment processing tools don’t require a subscription.
• Hardware Costs:
• Basic card reader starts at around $0–$10 (often free for new sign-ups).
• POS terminals range from $299 to $799, depending on features.
• Chargeback Protection: Offers up to $250/month in free chargeback protection.

Square is often the more affordable choice for businesses primarily processing in-person transactions due to its slightly lower fees and lack of mandatory subscriptions.

Cost Comparison Table

Feature	PayPal	Square
In-Person Fee	Not a primary offering	2.6% + $0.10
Online Domestic Fee	2.9% + $0.30	2.9% + $0.30
International Fee	+1.5% cross-border	Limited global support
Monthly Subscription	From $30/month	$0 for basic use
Hardware	None needed for online	Card readers & POS devices $0–$799
Chargeback Protection	$20 per dispute	$250/month included

Verdict:

Square generally offers better pricing for in-person transactions, while PayPal is the go-to choice for online or international businesses despite the extra cross-border fees. The right choice depends on your transaction type and customer location.

Key Takeaway:

If your business is retail or service-focused with mostly in-person transactions, Square will save you more money. For online stores with international sales, PayPal’s global payment network can be worth the higher fees:

Features and Tools: Beyond Payments – Which Ecosystem Offers More Value?

In 2025, payment platforms will have evolved far beyond simple transaction processing. Today’s businesses expect their payment provider to double as a hub for invoicing, inventory management, payroll, analytics, and even lending. Both PayPal and Square offer these extended features, but they differ in how well they serve online versus in-person businesses.

PayPal’s Key Features

PayPal’s strength lies in its integration with online platforms and its ability to handle complex payment scenarios.

• Global Payment Acceptance: Supports over 200 markets with currency conversion in more than 25 currencies.
• E-commerce Integrations: Seamlessly connects with platforms like Shopify, WooCommerce, BigCommerce, and Magento.
• Advanced Invoicing and Subscription Billing: Automates recurring payments and simplifies client billing.
• PayPal Checkout: Offers customizable checkout experiences that can increase conversion rates for online stores.
• Working Capital and Loans: Provides access to financing for eligible businesses based on their sales history and financial performance.
• Cryptocurrency Support: Allows users to accept, hold, and convert select cryptocurrencies.

Square’s Key Features

Square shines as an all-in-one ecosystem for businesses that manage both sales and operations.

• POS Systems: Offers specialized hardware for retail, restaurants, and service-based businesses.
• Inventory Management: Includes real-time tracking and low-stock alerts.
• Appointment Scheduling: Ideal for salons, consultants, and service-based industries.
• Loyalty Programs and Marketing Tools: Helps businesses retain customers and run promotions directly within the platform.
• Square Payroll: A fully integrated payroll service for managing employee payments and taxes.
• Square Loans: Offers cash advances based on transaction volume.

Feature Comparison Table

Feature	PayPal	Square
E-commerce Integration	Excellent	Good
POS Hardware	Limited	Advanced
Inventory Management	Basic	Advanced with alerts
Subscription Billing	Strong	Moderate
Payroll	Not available	Fully integrated
Marketing Tools	Limited	Built-in loyalty & marketing
Cryptocurrency Support	Yes	No

Verdict:

PayPal is best suited for e-commerce-heavy businesses that need powerful online tools and international payment options. Square’s robust POS systems, inventory management, and built-in marketing tools make it ideal for retail stores, restaurants, and service providers.

Key Takeaway:

For online merchants with global customers, PayPal’s integrations and subscription features are unmatched. For brick-and-mortar businesses that need all-in-one hardware and software tools, Square leads the way:

Ease of Use and User Experience: Which Platform Wins for Day-to-Day Operations?

A payment platform’s ease of use has a direct impact on productivity, customer satisfaction, and staff training costs. While both PayPal and Square prioritize usability, they are optimized for different business environments.

PayPal’s User Experience

PayPal is designed with online merchants and freelancers in mind:

• Quick Setup: New accounts can be created and ready for use in minutes.
• Intuitive Dashboard: Easily monitor transactions, manage disputes, and track balances.
• Global Accessibility: Customers recognize and trust the PayPal brand, boosting checkout conversions.
• Dispute Resolution: Offers user-friendly processes for handling chargebacks.
• Limitations: New accounts may experience temporary holds on funds, which can be frustrating for first-time sellers.

Square’s User Experience

Square focuses on physical businesses that need seamless hardware integration:

• Fast Onboarding: Merchants can start accepting payments as soon as their card reader or POS device is set up and configured.
• Unified Mobile App: Combines sales tracking, inventory management, and payment processing into one platform.
• POS Interface: Designed for simplicity, reducing the need for staff training.
• Offline Mode: Allows businesses to accept payments even when the internet is down.
• Limitations: Users with complex online-only needs might find it less flexible than PayPal.

User Experience Comparison Table

Experience Factor	PayPal	Square
Setup Speed	Fast for online merchants	Fast with hardware setup
Dashboard	Online-focused, simple analytics	POS-focused, unified management
Checkout Trust Factor	High with global customers	Moderate but improving
Offline Payment Capability	No	Yes
Dispute Handling	Robust	Standard

Verdict:

Square is generally more intuitive for in-person retail environments, while PayPal offers a smooth experience for online sellers and global freelancers.

Key Takeaway:

If you’re running a retail or service business, Square’s integrated POS and offline features simplify operations. For online-first businesses, PayPal offers a familiar and trusted payment experience:

Security, Compliance, and Fraud Protection: Keeping Payments Safe in 2025

Security is non-negotiable in today’s payment landscape. With data breaches and fraud attempts on the rise, businesses need a payment platform that prioritizes compliance, encryption, and real-time fraud detection.

PayPal’s Security Approach

• End-to-End Encryption: Ensures all sensitive data is encrypted during transmission.
• PCI DSS 4.0 Compliance: Meets the highest industry standards for cardholder data protection.
• Fraud Detection Tools: Uses AI to flag suspicious activities and prevent chargebacks.
• Seller Protection Program: Shields eligible transactions from certain fraudulent claims.
• Advanced Authentication: Offers two-factor authentication (2FA) for added security.

Square’s Security Approach

• EMV-Ready Hardware: Supports secure chip card and contactless payments.
• PCI Compliance Included: Automatically covers merchants at no extra cost.
• Built-in Fraud Prevention: Monitors transactions in real-time to detect anomalies.
• Secure Data Storage: Uses tokenization to minimize risks associated with storing card information.
• Chargeback Protection: Provides up to $250/month in dispute coverage.

Security Comparison Table

Security Feature	PayPal	Square
PCI DSS Compliance	Yes	Yes
Fraud Detection	Advanced AI-based monitoring	Advanced real-time monitoring
Seller/Chargeback Protection	Extensive seller protection	$250/month included
Hardware Security	Not applicable	EMV & contactless support
2FA Authentication	Available	Available

Verdict:

Both platforms excel in security, but PayPal’s robust seller protection appeals more to online merchants who deal with frequent disputes. Square’s EMV hardware ensures secure in-person transactions for retail businesses.

Key Takeaway:

For online sales requiring dispute protection, PayPal offers better coverage. For in-store payments that rely on secure card readers, Square’s hardware-based security is the smarter choice:

Best Fit by Business Type: Which Platform Works Best for You?

The ultimate decision often depends on the type of business you run. Whether you sell physical goods in a shop, provide services in person, or operate entirely online, PayPal and Square cater to different needs.

Recommendations by Business Type

Business Type	Best Option	Why It’s the Better Fit
E-commerce Stores	PayPal	Superior online checkout and international reach
Freelancers & Consultants	PayPal	Easy invoicing and quick client payments
Brick-and-Mortar Retailers	Square	Comprehensive POS systems and inventory tools
Restaurants & Cafes	Square	Tailored POS for food service and table management
Nonprofits or Fundraisers	PayPal	Donation-friendly tools and global donor support

Additional Factors to Consider

• Growth Goals:
• If you plan to expand internationally, PayPal is often the better long-term solution.
• Customer Preferences:
• Some customers prefer PayPal’s brand recognition during the checkout process.
• Operational Needs:
• Businesses requiring marketing tools, payroll, and advanced POS hardware benefit more from Square’s ecosystem.

Verdict:

Your choice should align with your business model and growth objectives, rather than just focusing on costs.

Key Takeaway:

Choose Square if you run a retail shop, restaurant, or service business needing hardware-based tools. Opt for PayPal if you want to sell online or reach international customers:

Conclusion

Both PayPal and Square offer excellent solutions for payment processing in 2025.

• Choose PayPal if your business focuses on global online sales, digital invoicing, and seamless e-commerce integration.
• Opt for Square if you prioritize in-person transactions, POS hardware, and all-in-one retail tools.

The right choice depends on your business model, growth goals, and transaction volume.

FAQs

Is PayPal or Square better for small businesses in 2025?

Square is typically better for small retail shops due to lower in-person transaction fees, while PayPal is better for online-focused small businesses.

Does Square work internationally like PayPal?

Square operates in fewer countries compared to PayPal, which supports over 200 regions globally, making PayPal a better option for global reach.

Can I use both PayPal and Square together?

Yes, many businesses use both—PayPal for online sales and Square for in-person transactions.

Which platform has better customer support in 2025?

Both improved their customer support in 2025; however, Square offers more hands-on support for hardware issues, while PayPal excels in dispute resolution.

Do PayPal or Square charge monthly fees?

Square’s basic plan has no monthly fees, while PayPal charges for advanced merchant tools. Both have optional paid tiers.