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Online payments are becoming increasingly popular as more businesses move to the online market and fintech. They make shopping more convenient for customers who don’t have to worry about using debit or credit cards. Also because of new technology it has become safer to perform a transaction online according to Rates: rates.fm. One of the most widely used payment platforms in the USA is PayPal and Square.
Both of these offered several benefits despite having differences. So which one should you pick between the two? The choice will depend on what you need. Having an understanding of what each of these platforms does will help you to make a decision. Continue reading this article as it breaks down the key differences between these two payment methods.
PayPal: Features and Benefits
PayPal, created in the USA, San Jose, CA, is an app that allows people to send and receive money. It is not only for businesses but can be used to send money to friends and family as well. It is linked to a bank account that receives payments. You can send money from your debit or credit card to any user.
PayPal is easy to set up making it a widely used platform. By the last quarter of 2022, PayPal had 432 million users. The main features include:
- Simple transfers
- Competitive rates
- E-check services
- Quick transactions
Benefits
Despite the other payment options, PayPal is a favorite mode of online transactions for many Americans. Here are some of the reasons why businesses use this payment app.
Easy to set up
With 81% of online payments in the United States being made through this platform it is easy to understand why many businesses use this platform. Anyone can set up PayPal on their phone or computer. All you need is to open an account and link it to a bank account.
Cost-effective
There is no additional fee except for what you pay during a transaction. Merchants may also be charged an extra fee if they want to access payments immediately. Ideally, it takes 2-3 days to receive payments. Sales made through a store or e-commerce retailer carry an additional fee of 2.7%.
Data Security
As global cyber attacks have risen by 7%, security is a great concern for both customers and business owners. Customers know that they are at risk of their bank details being accessed by hackers. So PayPal uses an end to end encryption to provide security. Encrypting data eliminates the risk of hackers accessing your money.
Square: Features and Benefits
Square provides a point-of-sale platform where customers can make in-store payments. Among the POS systems out there, Square is one of the best. It is designed for small and medium-sized companies. Customers can accept credit card payments through mobile devices. Users only get charged a transaction fee. Some of the features include:
- Accepts more payments such as Applies Pay and Google Pay
- Processes payments instantly
- Supports offline payments
- No monthly fees (you don’t even have to pay a dollar)
Benefits
Aside from helping businesses to process payments, Square has other important uses.
This platform offers many benefits for all types of businesses. These are
Customization
Square doesn’t use a one model fits all approach. Any company can set it up to suit their needs. You can set it up how you want. It has several add-ons you may include or remove.
It is easy to customize which makes it a great tool for training staff. Managers can create individual employee accounts with restricted access. Another feature it has is that it allows employee clocking giving managers an idea of hours spent at work.
CRM
The POS system collects customer data from the card details. You may also access data from customers themselves. Square creates a database for customers which is always updated each time a customer uses the online service.
The data is stored in a directory that you can access through the Square app. It also reorganizes the data making it easier for you to search for specific information. A directory is convenient for customers as it allows a one-time click and quickens the checkout process.
Reports
Another benefit of Square is the regular reports. The dashboard provides insights into the most important metrics. These include reports on:
- Sales
- Inventory
- Best selling items
This analytics helps you understand which areas need improvement. It is a great way of monitoring business growth.
Third-party Integration
Square can be easily integrated with other tools you are already using. It was designed to be integrated with other platforms that work for small businesses. This includes CRM, inventory, and e-commerce platforms. This makes the entire customer journey more pleasant.
Key Differences Between Square and Paypal
Here are some of the most important differences between these two payment options. These main distinctions highlight the significant difference in processes and how each method operates.
Third-party Integration
Square can be integrated with many apps. PayPal on the other hand is usually inbuilt into other platforms like eBay. So both work well with other platforms. However square has more integrations.
System Support
Both provide users support through FAQs. Square also has troubleshooting guides. Unfortunately, none of these is 24/7. PayPal also has a live chat option. There is a community forum where different users can interact.
Self-service
Square is equipped with many self-help tools. These will help your staff to use the app. However, the employee self-service only comes with the Retail version. PayPal on the other hand does have this feature.
Conclusion
Both PayPal and Square are great payment platforms. The one you choose will depend on individual needs. They both have different features that make them great for specific uses. Use Square if you want to incorporate an online experience with a brick-and-mortar store. It provides POS hardware that PayPal doesn’t have. However, you will need to constantly monitor your hardware.
PayPal is great for businesses that offer online shopping. It allows you to accept different types of payments straight to your bank. It is quick to set up and offer encryption on transactions. PayPal allows you to customize the shopping carts and reduces costs on exchanges.
