If you’re a small business owner who wants to accept credit cards in person and online, you’ve probably considered using PayPal. PayPal is a payment facilitator – a company that simplifies the credit card acceptance process. PayPal places its business customers under its master merchant account, so businesses don’t have to apply for and deal with separate merchant accounts.
Many businesses accept card payments with PayPal, but it’s not for everyone. Here’s a look at the best PayPal alternatives that might work well for your business, along with an overview of precisely what PayPal offers.
What to consider when choosing a PayPal alternative
When looking for the best PayPal alternative, consider how your business operates and what it needs (and doesn’t need). You want to avoid paying for features you won’t use and find a payment gateway that offers the functionality you need.
Consider the following factors when evaluating PayPal alternatives:
- Low fees
- Quick access to your money
- High security level
- Integration with other websites and software tools you use
- POS hardware types and cost
- Great customer service
- Support for international transactions
- Easy integration with your website
1. Best PayPal alternative for in-person transactions: Square
While PayPal got its start enabling cashless payments online, Square was a mobile payment pioneer, introducing the first widely used card reader that plugged into a mobile phone. Square’s strongest presence is in the in-person retail transaction space; more recently, it has branched out into e-commerce payments with its Square Payments service. (You may want to check out our comparison of PayPal and Square.)
Here’s a rundown of what Square has to offer.
Square’s e-commerce functions
To distinguish itself, Square offers merchants a free online store that incorporates its payment system. Businesses can choose from a variety of site setups with industry-specific features. Like PayPal, Square websites can accept donations and membership fees.
A Square online store is a good option for both startups without a website and brick-and-mortar businesses adding an e-commerce option.
If you don’t need a website, you can still use Square for your e-commerce payment processing with Square Online Checkout. Square Online Checkout is comparable to PayPal Checkout’s button generator. (We’ll explain more about PayPal’s features later.)
With Square Online Checkout, you input information about each product, including its name, image and price. The service accepts Visa, Mastercard, American Express, Discover, JCB and UnionPay cards, as well as prepaid, debit and reward cards with those logos. Square Online Checkout also takes Apple Pay and Google Pay, but not Venmo, PayPal or PayPal Credit.
You can also use Square for your e-commerce shopping cart by connecting with one of its partners, including GoDaddy, Wix, WooCommerce, Magneto, Weebly and 3dcart. However, If you have a custom-built website, you’ll need a developer to help you connect Square payments.
If you’re comparing Square to PayPal, note that Square accepts fewer payment types than PayPal and doesn’t have a responsive button display.
Like PayPal, Square enables customers to buy from merchants via link or QR code to drive sales from social media, landing pages and printed materials.
Editor’s note: Looking for the right credit card processor for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.
Square’s marketing functions
Square currently doesn’t have any marketing tools or programs comparable to PayPal’s Store Cash, which offers customers incentives to buy from a retailer they’ve visited. However, Square does offer integrated email marketing software that tracks sales made through its emails, texts and social links. This software is similar to Constant Contact or Mailchimp, but it pulls contacts from the merchant’s customer list without the ability to add non-customers.
Square’s integrated email marketing software is priced as follows:
- 0-500 contacts: $15 per month
- 501-1,000 contacts: $25 per month
- 1,001-2,000 contacts: $35 per month
Square’s subscription features
Like PayPal, Square supports subscriptions and free trials. However, Square’s process is a bit clunky and confusing.
There are three possible ways to set up subscriptions and free trials with Square:
- Square Online (when using Weebly): This allows merchants to sell one-time memberships (which aren’t really subscriptions).
- Square Checkout Links: This function isn’t web-based; customers receive an email asking them to pay. The customer then chooses whether this is a one-time payment or a subscription payment.
- Square recurring invoices: This feature is also not web-based. Recurring invoices offer the advantage of sending customers a one-time payment request and then charging their payment card when it’s time to renew the subscription.
Square mobile payment functionality
You can accept mobile payments with the Square Point of Sale app on a compatible iOS or Android device. With a Square reader, the cost is 2.6% plus 10 cents per transaction. When keying in the card number, it’s 3.5% plus 15 cents.
These are some Square mobile payment equipment options:
- Contactless card and chip reader ($49): This enables you to accept chip cards, contactless (NFC) cards, Apple Pay and Google Pay. It includes a backup magstripe reader that plugs in to your phone’s headphone jack or Lightning connector. This system connects to your mobile device via Bluetooth.
- Magstripe reader for Android or Apple: The first one is free, while existing customers pay $10.
- OtterBox case/mount for reader ($49): This attaches the reader to an iPhone XR.
Square’s virtual terminal options
Like PayPal, Square offers a virtual terminal, or payment gateway, for remote billing or accepting credit cards over the phone. This virtual terminal can issue receipts by email, text or print, and collect customer feedback on digital receipts. It can also schedule recurring payments.
For professional-service businesses, the virtual terminal can integrate with the Square Terminal credit card machine (see below for more information). There is no monthly fee, and the transaction fees are 2.6% + 10 cents for in-person processing and 3.5% + 15 cents for remote processing.
Square’s point-of-sale options
Point of sale (POS) is where Square really shines. Square offers specialized software and hardware solutions for different business types: retail, food and beverage, and professional services.
Retail software
Square’s retail POS software gives you these abilities:
- Integrate online and in-person sales and customer data.
- Add notes on customer preferences and characteristics.
- Manage inventory, even across multiple locations.
- Offer shipping and in-store pickups.
- Handle other business tasks, such as team management, payroll and reports.
There are three retail-solution tiers: Free, Plus and Premium.
- Free: The Free plan has no monthly fee and costs 2.6% plus 10 cents for in-person transactions and 2.9% plus 30 cents for online transactions. It includes the POS app, online store and basic inventory tools.
- Plus: The Plus plan is $60 per month per location. It costs 2.5% plus 10 cents for in-person transactions and 2.9% plus 30 cents for online transactions. This plan includes cross-location exchanges, advanced inventory tools, retail reports and Square Team Management (software for scheduling, paying and managing your team).
- Premium: The Premium plan has custom pricing. To be eligible, you need more than $250,000 annually in processed sales. The Premium tier includes the Square Payroll payroll service, Square Loyalty (which keeps track of customer loyalty points, rewards, etc.), Square Marketing (email marketing and marketing automation services), and account management.
Restaurant software
Square provides solutions to accommodate different restaurant types: quick service, full service, fast-casual, bars and breweries, and ghost kitchens. Its POS software includes the following features:
- Fast order entry with conversational modifiers
- Real-time menu updates across devices
- Ability to repeat an order in a few taps
- Kitchen display system (KDS) that produces digital tickets, allowing managers to manage all orders in one screen
- Integration of online ordering into POS and KDS
- Menu management
- Bulk additions to update menu
- Integrations with other software like Homebase, TapMango, 7shifts and BentoBox
- Ability to handle promotions
- Order manager
- Reports, including by section and menu item
- Automatic gratuity for large parties
- Table management with timers
- Kitchen reports
- Ability to reopen closed checks
The three restaurant-solution pricing tiers are again called Free, Plus and Premium.
- Free: The Free plan has no monthly fee and costs 2.6% plus 10 cents for in-person transactions and 2.9% plus 30 cents for online transactions. It includes the POS app, team management, and support from 6 a.m. to 6 p.m., Monday through Friday.
- Plus: The Plus plan is $60 per month per location, plus $40 per month for each added POS device. Costs are the same per sale. The Plus plan has advanced POS features, unlimited Square KDS devices, Team Plus (additional team-management features) and 24/7 support.
- Premium: The Premium plan has custom pricing. To be eligible, you’ll need more than $250,000 annually in processed sales. It includes Square Payroll, Square Loyalty and Square Marketing.
Equipment
For all its business customers, Square offers the following equipment options:
- Square Register: This includes a display that faces the cashier and a display that faces the customer. The cost is $799, or $39 per month over 24 months.
- Square Stand: This is an iPad stand for when you’re using an iPad as a POS system. The cost is $169, or $16 per month over 12 months.
- Square Terminal: This all-in-one device accepts cards via tapping, swiping and inserting. It can also take debit PINs and print receipts. The cost is $299, or $27 per month over 12 months.
Square’s money-moving abilities
Square has its own bank, Square Financial Services, which can integrate seamlessly with the Square Payments online payment-processing solution, giving merchants instant access to their money with no fees, minimum balance requirement or credit checks.
If you have a bank account, Square allows you to send up to $10,000 per transfer instantly, with unlimited instant transfers per day. Instant transfers cost 1.5% of the transfer amount. Standard transfers are usually sent within 36 hours (one to two business days) and are free.
2. Best PayPal alternative for large-scale businesses: Stripe
Like PayPal and Square, Stripe offers a suite of payment solutions. Stripe’s main strength is e-commerce payments, although it also offers a virtual terminal and card readers. Its main customers are large-scale businesses such as Zoom, DoorDash, Shopify and Lyft.
Stripe’s e-commerce functions
Stripe’s e-commerce solution is called Stripe Checkout, which is designed and hosted by Stripe. Stripe Checkout features address auto-complete,…