PayPal and Square represent two different approaches to payment processing. PayPal built its empire as an online payment wallet — a trusted name at checkout that buyers recognize. Square started with a physical card reader that let anyone accept cards, then expanded into a full business platform. Comparing their fees reveals which works better for different business types.
Online Payment Fees
For online transactions, PayPal charges 2.99% + $0.49 while Square charges 2.9% + $0.30. On a $100 online payment, PayPal takes $3.48 and Square takes $3.20 — a $0.28 difference per transaction. Square is consistently cheaper for online payments.
In-Person Payment Fees
Square charges 2.6% + $0.10 for in-person card payments with its free card reader. PayPal's Zettle (its in-person solution) charges 2.29% + $0.09 for card-present transactions. On a $100 in-person sale, PayPal Zettle takes $2.38 vs Square's $2.70. PayPal Zettle is cheaper for in-person payments, though Square's ecosystem (POS, inventory, team management) is more comprehensive.
Where PayPal Wins
PayPal's primary advantage is brand recognition and buyer trust. With 430+ million accounts, PayPal is the most recognized checkout button in e-commerce. Offering PayPal at checkout can increase conversion rates, especially for smaller or less-known stores where buyers may hesitate to enter their card details.
PayPal also offers QR code payments at just 1.90% + $0.10 for transactions over $10 — one of the cheapest payment acceptance methods available. For businesses that can display QR codes (cafes, market stalls, service providers), this is a significant cost advantage.
Where Square Wins
Square's strength is its all-in-one business platform. The free plan includes a POS system, inventory management, customer directory, team scheduling, basic payroll, and an online store builder. PayPal offers some business tools but nothing as comprehensive. For a small business that needs payment processing and operational tools, Square delivers more value per dollar.
Square's faster payout schedule is another advantage. Square offers next-business-day deposits for free, or instant deposits for 1.75%. PayPal holds funds in your PayPal balance, and transferring to your bank takes 1-3 business days (or instant for 1.75%).
For online-only sellers who want a trusted checkout button, PayPal is hard to beat. For businesses with physical locations or those wanting an integrated business platform, Square provides better overall value despite slightly higher in-person rates than PayPal Zettle.