Square vs PayPal, decided by where you take money.
PayPal is cheaper in person — 2.29% + 9¢ against Square's 2.6% + 15¢ — and more expensive online, where PayPal Checkout runs 3.49% + 49¢ against Square's 2.9% + 30¢. The split is that clean.
What this page settles.
Three questions, in the order most people ask them.
The short answer
In person, PayPal is cheaper. Online, Square is cheaper. Neither is close.
PayPal’s card-present rate through its Point of Sale product is 2.29% + $0.09. Square’s is 2.6% + 15¢ on the free plan. On a $40 sale that is $1.01 against $1.25 — a 24¢ difference on every transaction, which on 800 transactions a month is $192.
Online the gap runs the other way and runs wider. PayPal Checkout is 3.49% + $0.49; PayPal’s standard card rate is 2.99% + $0.49 and its advanced card payments are 2.89% + $0.29. Square’s online rate is 3.3% + 30¢ on the free plan and 2.9% + 30¢ on the paid tiers.
So the honest answer is to split them if your business is genuinely split, and to pick on channel if it is not. What neither comparison captures is the thing they share: both are aggregators, which means neither underwrote you before you started trading.
Published pricing, side by side
| Square | PayPal | |
|---|---|---|
| In person | 2.6% + 15¢ tapped, dipped or swiped on the free plan; 2.5% + 15¢ on Plus, 2.4% + 15¢ on Premium |
2.29% + $0.09 card-present through PayPal Point of Sale / Zettle |
| Keyed | 3.5% + 15¢ | 3.49% + $0.09 manual card entry in person |
| Online | 3.3% + 30¢ 2.9% + 30¢ on Plus and Premium |
2.99% + $0.49 standard cards; PayPal Checkout and Venmo 3.49% + $0.49; advanced card payments 2.89% + $0.29 |
| Pricing model | Flat rate | Flat rate |
| Monthly | $0 on the free plan; $49/mo per location (Plus); $149/mo per location (Premium) | $0 on standard; advanced products priced separately |
| Contract | No contract. The page says “no hidden fees or locked-in contracts. Cancel or switch anytime.” | Not published |
| Monthly minimum | Not stated | Not stated |
| Funding | Next business day free; instant transfer for a fee | Not stated on the fee page; instant bank withdrawal 1.50%, standard withdrawal no fee |
| Chargeback fee | Not published on the pricing page | $20.00 per chargeback on transactions not paid through a PayPal account or guest checkout |
| Hardware | Sold outright; prices on a separate page | Sold outright |
| Account type | Aggregator (sub-merchant under Square) | Aggregator (sub-merchant under PayPal) |
Square: squareup.com — read 2026-10-08. PayPal: www.paypal.com — read 2026-10-08.
Published prices change. These were read on the dates above and are list prices for a business buying direct — a quote you are given may differ, and should be compared as a quote rather than against a price list.
Square, also published:
- ACH via invoice 1%, $1 minimum
- Afterpay 6% + 30¢
- EBT 1.8% + 5¢
- Custom pricing available above $250,000 a year
PayPal, also published:
- Pay by Bank (ACH) 1%, capped at $10.00
Where they actually differ
The keyed rate. PayPal’s manual card entry in person is 3.49% + $0.09; Square’s is 3.5% + 15¢. Effectively identical, and both are a reason to tap rather than type. Card-not-present downgrades.
Disputes. PayPal publishes a $20.00 chargeback fee on transactions not paid through a PayPal account or guest checkout. Square does not publish a chargeback fee on its pricing page. PayPal’s disclosure is better; whether its cost is better depends on your dispute rate. Chargeback fees.
The business system around the payment. Square is a business platform — till app, inventory, invoicing, staff, reporting, payroll, a dashboard built for a shop. PayPal is a payment company with a point-of-sale product attached. If you want the software as well as the rate, Square is the stronger offering by some distance.
The checkout itself. PayPal’s advantage online is not price, it is that a meaningful share of buyers trust and prefer the PayPal button, and some will abandon a checkout that does not offer it. That conversion effect is real and can easily outweigh the rate difference, which is why many online sellers run PayPal alongside their main processor rather than instead of it.
ACH. PayPal publishes Pay by Bank at 1% capped at $10.00. Square publishes ACH via invoice at 1% with a $1 minimum. Comparable, and both much cheaper than cards for large invoices. B2B processing.
Funding. Square says next business day free, instant for a fee. PayPal does not state settlement timing on its fee page; instant bank withdrawal is 1.50% and standard withdrawal is free. Funding times.
Who each one suits
PayPal suits a mobile trade, market stall, pop-up or small counter where almost everything is tapped in person and the 24¢-a-transaction advantage compounds. It also suits any online seller who wants the PayPal button available as a payment option regardless of what else they run.
Square suits an online store wanting one provider for everything, and any business that wants the operational software — inventory, staff, reporting, invoicing — rather than just a rate. For a shop or restaurant, Square is a system and PayPal is a card reader.
Both are flat-rate aggregators. Above roughly $25,000 to $40,000 a month in card volume, interchange-plus through your own underwritten merchant account usually costs less than either, and the account is sturdier. Flat rate versus interchange-plus.
What the comparison does not show
Both can hold your money. Neither underwrote you before you started trading, so the risk assessment happens after the volume arrives. A spike, a category review or a cluster of disputes can produce a hold decided by a model rather than a conversation. If a two-week hold would stop you trading, that is the argument for a conventional merchant account. When an aggregator freezes you.
PayPal’s fee schedule is long and channel-specific. The figures above are the headline ones. If you use Venmo, invoicing, subscriptions, payouts or multi-currency, each has its own line and they are not all the same. Read the schedule for your own mix rather than the top of it.
Both published rates are averages across your card mix. A flat rate charges the same for a plain debit card and a premium rewards card. Yours may be generously or expensively priced by that average and neither provider can tell you which. What rewards cards cost.
Running both means two statements and two effective rates, which is manageable and worth being deliberate about rather than drifting into.
How to settle it with your own numbers
Both of these are flat rates, which means both charge you the same whether your customer handed over a plain debit card or a premium rewards card. The published difference between Square and PayPal is therefore real but narrow, and neither figure is your cost.
Your cost is your effective rate: total fees for a month divided by total card volume. Work it out, then price Square and PayPal against it at your own average ticket — the per-item is often what separates them — and remember that neither can show you the card mix underneath, which is what decides whether a flat rate is treating you generously or not.
The calculator works it out from two figures on a statement, and what an effective rate is explains why it so often differs from the rate on the quote.
What we charge
Interchange + 0.50% + 10¢ in person, interchange + 0.75% + 25¢ keyed, with no contract, no monthly fee and no monthly minimum.
Both Square and PayPal are flat rates, and so is the limitation they share: above roughly $25,000 to $40,000 a month in card volume, interchange passed through at cost generally costs less than either. Send us a statement and we will tell you which side of that line you are on — including when the answer is that you should stay where you are.
While we are on the subject
Is PayPal cheaper than Square?
In person, yes — 2.29% + 9¢ against 2.6% + 15¢. Online, no: PayPal Checkout is 3.49% + 49¢ against Square’s 2.9% + 30¢ on its paid tiers.
Can I use both at once?
Yes, and many online sellers do — one processor for cards, PayPal available as a button. Two statements to reconcile.
Which has better software?
Square, clearly. It is a business platform with inventory, staff, reporting and invoicing; PayPal’s point-of-sale product is a payment tool.
Do either of them hold funds?
Both can. Both are aggregators, so the risk review happens after you start trading rather than before.