Square vs Stripe For Small Business (One Winner)

Stripe and Square are two premier services for businesses looking for payment processing solutions. If you’re a small business owner, you know why it’s essential to have a reliable solution that protects your customer’s data and makes payments fast.

Today, we’ll compare Stripe and Square. We’ll look at several features and answer some essential questions about how these two services work.

Square vs Stripe Compared

Let’s look at the differences between Square and Stripe.

Security

Square has invested in industry-standard security features that protect your systems and transactions from intrusion by malicious actors.

Their services are PCI – Compliant to ensure your transactions stay safe and the credit card information of your customers remains secure.

Besides that, Square uses a proprietary tokenization system to encrypt your customers’ card information until they process it within their systems. 

All hardware that supports Square comes directly from them. For this reason, you can be sure your POS systems use secure hardware and software built in-house by Square. 

Square themselves use a vulnerability management suite to stress-test their systems and stay ahead of emerging threats. This way, they can predict attacks and protect you before they happen.

Stripe’s security is just as world-class. Just like Square, they’re PCI Compliant, graded as a Level 1 service provider. With such a badge, your credit card information is secure on Stripe. 

To keep your transactions even more secure, Stripe forces all HTTPS links to their services through a secure SSL. 

Using AES-256 encryption, Stripe scrambles all card payment information to secure you and your customers. None of Stripe’s servers can access plaintext credit card data.

If you’re a techie looking for a quick payday, Stripe will reward you for finding vulnerabilities in their systems.

They partner with HackerOne, and you’ll have to sign up for this invite-only opportunity.This way, Stripe ensures they stay ahead of emerging threats and patch them before they hurt your business. 

Verdict

Whether you use Square or Stripe, you’re guaranteed unparalleled security. Both services take security seriously and use industry standard tools and systems to keep your payment information safe.

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Availability

Square is relatively new to the market. So, their offerings aren’t available in as many markets yet. Square is working to increase their presence worldwide, but at the time of this writing their credit card and app services are only available in: 

  • Japan, 
  • Canada,
  • Australia
  • United States
  • United Kingdom
  • Republic of Ireland
  • France

Square doesn’t process payment cards outside of these countries. Their systems also don’t support cross-border card payments. But you’ll still receive cash transactions while traveling abroad.

Unlike Square, Stripe is available in a growing list of countries, currently at 46 territories worldwide.

You can accept payments from international customers in over 135 currencies. Besides that, you can use Stripe wallets, receive bank debits, use unified APIs for cards and more.

Verdict

Stripe Wins. If you’re a small business that serves a global clientele, you’d do better with Stripe than with Square. Not only does Stripe support more currencies, it’s available in more territories than Square.

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Payment Processing Periods

Square supports instant payouts, although in three different avenues: 

  • If you use a Square Checking account, you can make direct debits straight from your stored card balance. This payout matures in 5 business days after you make the payment. 
  • If using your Square balance for your payroll, you’ll wait for one business day before payday.
  • If your recipient has a traditional bank account linked to Square, they will receive their pay by the next business day, or instantly, if they use the Cash App.

Stripe is quite different. For a first-time Stripe user, you may wait up to 7 working days to access your funds after you receive a payout. In countries like Brazil, this waiting period may be longer.

After that, Stripe will settle your account within 2 business days in the US. In other countries, this period may be shorter or longer. 

Instant payouts are available in Singapore, Canada, and the U.S, if you’re a qualifying account. But, you’ll have to pay Stripe a 1% processing fee to facilitate the payout. 

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Verdict

If your business requires a consistent cash flow, Stripe is a better option than Square. You can set your Stripe account to process your payouts daily. Square will only support this feature if you use the Cash App.

Is Stripe Good for Small Businesses?

Yes, Stripe is an excellent payment service for small businesses. 

With Stripe, you can customize a secure checkout option for your online business. If you accept payments at your brick-and-mortar business, you can also integrate their POS product and accept cards and other digital forms of payment. 

You can scale your business checkout process using reliable APIs and integrations, especially if you sell a digital service or product.

With Stripe’s various features, you can beat fraud, send invoices, issue virtual and physical cards and manage your business spending. 

Besides that, Stripe is affordable for small businesses. Their average fee starts at 2.9% plus 30 cents per successful transaction and gets cheaper as you transact more money often. Stripe also supports integrated payments methods like bank transfers, digital wallets, and cards. 

Is Square a Competitor of Stripe?

Yes. Square and Stripe compete on several of their offerings. 

Both services are excellent solutions for business payment processing. Stripe and Square target small businesses, especially with Point of Sale software. Both services help your business process credit cards, bank payments and cash within your business premises. 

Is Square Worth it for Small Business?

Square is an excellent option for small businesses, especially those that use POS systems.

Square offers both POS software and hardware that helps you collect payments from your customers in a safe and efficient way. 

Your businesses can now accept card and cash payments without using peer-to-peer payment platforms. Square has no monthly fees, and you don’t need to apply for an account or wait for approval.

As a business owner, you’ll also use Square to send invoices, track them and accept payments online.

Do I need a Business Bank Account for Stripe?

While you need a bank account, it doesn’t have to be a business account. If you’re a sole proprietor, partnership or Single-Member LLC, all you need is an account with your name or your DBA.

If you’re an LLC or a corporation, however, you’ll need a business bank account with your LLC name and/or DBA.

In both scenarios, without a bank account, Stripe will not payout your money in any other way.

Can I use Stripe Without a Website?

Yes, you can.

You can use Stripe’s payment links to create custom checkout pages for your customers without ever writing a single line of code.

You can also use Stripe for in-person payments using Stripe Terminal. 

Is Square Only for Businesses?

Square isn’t just for business. You can create a personal account and use it to send and receive funds from your family and friends. 

Does Square have Transaction Fees

Yes, they have.

If you are using Square to accept online payments, you’ll pay standard processing fees of 2.6% + $0.10 for contactless payments, swiping a Magstripe, and chip cards. 

Manually keyed-in payments, processed using a card on file or virtual terminal have a 3.5% + $0.15 fee. Sending invoices incurs a 2.9% + $0.30 fee. Square charges you no fees for checks, cash or gift certificate payments.

Stripe credit your account with your funds less all their charges.

Final thoughts

If you’re running a small business or a startup, you’d do well to have both payment systems. If your business is brick-and-mortar with several physical locations, Square POS is ideal for you.  

If you’re accepting payments for products or services from around the globe, Stripe will take away all your limitations. Square will limit you to only 7 countries.