Stripe vs Square vs PayPal: Payment Processing Compared

Choosing a payment processor affects every transaction your business handles. Stripe, Square, and PayPal each serve different segments of the market. Stripe dominates online and developer-first payments. Square owns the in-person and small business space. PayPal offers the broadest consumer recognition and checkout conversion for e-commerce.

The right choice depends on where you sell (online vs. in-person), your technical capacity, transaction volume, and whether you need a full commerce platform or just a payment API. This comparison breaks down the meaningful differences.

Feature Comparison

Pricing and Fees

Stripe and Square have nearly identical online processing rates. PayPal is notably more expensive for online transactions at 3.49% + $0.49 per transaction. For in-person payments, Square and PayPal's Zettle offer lower rates than Stripe Terminal. The fee differences become significant at scale — a business processing $100,000/month online would pay roughly $600 more per month with PayPal versus Stripe.

Volume discounts are available from all three processors, but Stripe is the most transparent about custom pricing for high-volume merchants. Square's pricing is flat and non-negotiable below enterprise volumes. PayPal offers negotiated rates for large sellers through PayPal Commerce Platform.

Developer Experience

Stripe's API is widely considered the gold standard for payment APIs. The documentation is thorough, with code examples in every major language. The API design is consistent and well-versioned. Stripe Elements provides pre-built, customizable UI components for payment forms. The testing environment with test card numbers and webhook simulation is comprehensive.

Square's APIs have improved considerably but remain less extensive than Stripe's. The focus is on commerce-related APIs — inventory, orders, catalog, customers — which are useful for businesses building omnichannel experiences. The developer documentation is good but not as polished as Stripe's.

PayPal's developer experience is the weakest of the three. Multiple legacy APIs coexist (Classic NVP/SOAP, REST v1, REST v2, Braintree), creating confusion about which to use. Documentation can be inconsistent across these generations. The checkout SDK works well for basic integrations, but custom implementations require more effort.

In-Person Commerce

Square dominates in-person payments. Its hardware lineup includes readers, terminals, stands, and full register systems. The Square POS app is free and handles inventory, employees, tipping, receipts, and basic reporting. Industry-specific POS solutions cover restaurants, retail, and appointments. For a business that needs a complete in-person commerce setup, Square is the most turnkey option.

Stripe Terminal offers card readers for in-person payments but is designed as an extension of online-first businesses rather than a standalone POS. There is no free POS app — you build your own or use a partner's. Stripe Terminal makes sense for businesses that primarily operate online but occasionally need in-person payment capability.

PayPal's in-person offering comes through Zettle (acquired in 2018). Zettle readers are affordable and the app is functional for basic retail. It integrates with the PayPal ecosystem, which is convenient for existing PayPal merchants. However, Zettle lacks the depth of Square's POS features.

Online Commerce and Checkout

Stripe Checkout is a hosted payment page that handles the entire payment flow. It supports cards, wallets (Apple Pay, Google Pay), bank transfers, and local payment methods. Stripe's Link feature saves payment details for returning customers, reducing checkout friction. For businesses building custom checkout experiences, Stripe Elements provides maximum flexibility.

Square Online provides a basic e-commerce website builder with integrated payments. It is functional for small businesses that want a simple online store without managing separate platforms. For businesses using third-party e-commerce platforms, Square integrates with WooCommerce, BigCommerce, and others.

PayPal Checkout is the most recognized payment button on the web. Consumer trust in PayPal translates to higher conversion rates for many merchants, particularly in markets where credit card comfort is lower. PayPal's guest checkout allows payment without a PayPal account. The combination of PayPal, Venmo, and Pay Later options gives consumers multiple ways to pay.

Subscription and Recurring Billing

Stripe Billing is the most capable subscription management system of the three. It handles complex billing models — usage-based, tiered, per-seat, hybrid — with proration, trials, coupons, and tax calculation. The customer portal allows subscribers to manage their own plans. Revenue recognition and reporting tools support SaaS financial operations.

Square Subscriptions is simpler, covering basic recurring payment needs for service businesses. It works well for memberships, retainers, and straightforward subscription plans but lacks the billing complexity that SaaS businesses require.

PayPal Subscriptions handles standard recurring billing with plan management and subscriber APIs. It is adequate for simple subscriptions but does not match Stripe Billing's depth for complex billing scenarios.

Fraud Prevention

Stripe Radar uses machine learning trained on data from millions of global businesses to detect and block fraudulent transactions. It runs on every payment by default, with customizable rules for businesses that need specific fraud logic. Radar for Fraud Teams (additional cost) adds manual review queues and advanced analytics.

Square's fraud detection is built into the platform but offers less visibility and customization. For in-person transactions, fraud risk is inherently lower (card-present), which aligns with Square's primary use case.

PayPal's Seller Protection covers unauthorized transactions and items not received, shifting the fraud liability from the merchant to PayPal in qualifying cases. This is valuable for smaller merchants who lack the resources to manage fraud independently.