Both PayPal and Square serve small merchants, but the dominant question is whether the merchant is primarily online (PayPal wins) or primarily in-person (Square wins). For a true omnichannel small merchant, Square's combined platform is usually cheaper, but PayPal wallet acceptance is a conversion lever Square cannot match natively.
2.89% + $0.49 Advanced Card. Standard 3.49% + $0.49.
PayPal wallet bundled.
$20 chargeback, refunded if won.
Micropayments under $10: 4.99% + $0.09.
2.6% + $0.15 in-person Free, 3.3% + $0.30 online Free.
Plus/Premium plans drop online to 2.9% + $0.30.
$0 chargeback fee.
Hardware sold separately.
Illustrative example, not a real company. $20,000 monthly volume, $40 average ticket, 500 transactions.
Square Free wins this online-only profile by roughly $63/month because the $0 chargeback fee and slightly lower fixed cost offset the percentage gap. Switch to baskets above $80 average ticket and PayPal Advanced flips to cheaper.
| Feature | PayPal | Square |
|---|---|---|
| Published online rate | Yes | Yes |
| Published in-person rate | Partial | Yes |
| Wallet acceptance bundled | Yes | No |
| $0 chargeback fee | No | Yes |
| Free invoicing | Yes | Yes |
| Custom rate at scale | Yes | Yes |
| Native subscriptions | Yes | Partial |
| Native POS hardware | Partial | Yes |