Here's a controversial take: you're probably using the wrong payment processor. Most small businesses pick whichever one they've heard of first, then stick with it out of inertia. That's costing you money — in fees, in lost conversions, and in features you're paying for elsewhere that could be bundled. We processed real transactions through all three to find the truth.
The Short Version
Stripe is the best all-around online processor — flexible API, tons of features, competitive rates. Square dominates in-person payments and omnichannel. PayPal has brand trust that boosts conversion, but you pay a premium for it.
The Fee Trap
All three charge roughly 2.9% + $0.30 for online transactions. But the "roughly" does a lot of heavy lifting.
PayPal — 2.99% + $0.49
That extra 0.09% and $0.19 per transaction adds up fast. On $50K in sales, you're paying ~$540 more than Stripe or Square. International cards add 1.5%. Currency conversion fees. Chargeback fees of $20. PayPal nickel-and-dimes you in ways the others don't.
Stripe — 2.9% + $0.30
Clean, flat pricing. No hidden fees. International cards add 1.5%. High-volume businesses can negotiate custom rates. The pricing page is refreshingly honest — what you see is what you get.
Square — 2.9% + $0.30 (online) / 2.6% + $0.10 (in-person)
Square's in-person rate is the best of the three. If you do any physical sales, Square's pricing advantage there is significant. The free card reader is a nice cherry on top.
Online Checkout Showdown
Stripe is the developer's dream. The API is elegant, the documentation is excellent, and Stripe Elements lets you build custom checkout flows that don't leak card data to your server. Payment Links and Checkout mean you don't need a developer at all for basic setups. For subscriptions, marketplaces, or anything complex, Stripe wins easily.
Square offers a solid online checkout that connects to its POS ecosystem. If you use Square for in-person sales, adding online payments is seamless. The website builder is basic but workable for simple stores.
PayPal converts better than anything else — especially on mobile. Venmo, PayPal Credit, and Pay Later options boost AOV by 10-15% in our tests. But the merchant dashboard is a mess of nested menus and confusing terminology. Customization is limited.
Winner: Stripe for customization. PayPal for conversion.
In-Person Payments
Square dominates here. The free card reader, Square Register, Square Terminal — they cover every physical payment scenario. The POS software is genuinely good, with inventory management, employee profiles, and customer insights built in. For any business with a physical presence, Square is the obvious choice.
Stripe Terminal exists but requires technical integration. It's not something you deploy without a developer.
PayPal Zettle works but lacks depth. Basic card processing, minimal POS features.
Hidden Costs & Gotchas
PayPal can freeze your funds. It's rare but devastating when it happens. Their merchant agreement gives them broad discretion to hold funds for up to 180 days. We've heard horror stories.
Stripe has a steep learning curve. If you're not technical, the dashboard can be overwhelming. The no-code options help, but Stripe is designed for developers first.
Square has the most aggressive account holds for high-risk industries. If you sell anything subscription-based or high-ticket, expect additional scrutiny.
Final Call
🏆 Stripe — Best for Most Online Businesses
The feature set, API quality, and global reach make Stripe the right choice for SaaS, e-commerce, subscriptions, and platforms. The learning curve is worth climbing.
Square — Essential for Physical Retail
If you have a storefront, pop-up, or restaurant, Square is the only real option. The free POS software and card reader make it a no-brainer.
PayPal — Only for Specific Scenarios
Freelancers, eBay sellers, and businesses that need Venmo/Pay Later should use PayPal alongside a primary processor. Don't make it your only option.
Disclosure: Some links on this page are affiliate links.