💳 Want to get paid faster, with lower fees, and zero headaches? Of course, but the best payment processor for small business usually depends on the type of business and what the specific needs are, not just fees and deposit times. Read-on for a comparison of the top three providers.
If you’re running a small business, choosing the right payment processor is one of the most important financial decisions you’ll make. The wrong choice can mean:
❌ Higher transaction fees eating into your profits
❌ Delays in getting your money
❌ Limited payment options frustrating your customers
❌ Outdated technology limiting growth
The top three payment processors—PayPal, Stripe, and Square—are all great options, but they serve different business needs. So, which one is best for you?
Let’s break them down so you can accept payments like a pro.
📌 All fee structures and features are current as of March 2025. Always verify the latest rates on each provider’s website!
What to Look for in the Best Payment Processor for Your Small Business
Before choosing a provider, think about:
✅ Where you sell: Online, in-person, or both?
✅ Transaction fees: How much of your revenue gets taken by fees?
✅ Ease of setup: Do you want something plug-and-play or fully customizable?
✅ Speed of payouts: How quickly do you need access to your money?
✅ Accepted payment methods: Do you need support for Apple Pay, Google Pay, or international currencies?
Now, let’s dive into the big three: PayPal, Stripe, and Square.
PayPal: The Most Recognized Payment Processor
Best for: Freelancers, service-based businesses, and businesses looking for a trusted checkout experience.
If you want a name your customers already trust, PayPal is the way to go. More than 430 million people worldwide use PayPal, which means your customers are more likely to complete their purchase instead of abandoning checkout.
✅ Pros:
✔️ Brand Recognition: Customers feel safer paying with PayPal.
✔️ Fast Setup: No coding required—integrate with most platforms in minutes.
✔️ Multiple Payment Options: Accepts credit cards, debit cards, bank transfers, PayPal balance, and even “Pay Later” options.
✔️ Quick Transfers: Get money in one business day (or instantly for a small fee).
❌ Cons:
❌ Higher Fees: More expensive than some competitors.
❌ Account Holds: If PayPal flags a transaction as suspicious, your funds could be frozen for days or weeks.
❌ Limited Customization: Unlike Stripe, you can’t fully control the checkout experience.
💰 PayPal Transaction Fees (as of March 2025):
| Transaction Type | Fee |
|---|---|
| Online transactions | 2.99% + $0.49 |
| In-person payments | 2.29% + $0.09 |
| Manual keyed-in payments | 3.49% + $0.09 |
👨💼 Best for: If you want a simple, trusted way to accept payments and don’t need a ton of customization, PayPal is a solid choice.
Stripe: The Best Choice for Online Businesses
Best for: E-commerce businesses, subscription-based businesses, and companies needing global payment support.
If you want complete control over your checkout experience, Stripe is your go-to. Unlike PayPal and Square, Stripe is built for developers, meaning you can customize every detail of your payment process.
✅ Pros:
✔️ Highly Customizable: Allows you to fully integrate and brand your checkout experience.
✔️ Lower Fees for Large Transactions: No extra fees for high-ticket purchases.
✔️ Global Reach: Supports 135+ currencies and multiple payment methods like Apple Pay and Google Pay.
✔️ Advanced Fraud Protection: AI-driven fraud detection helps prevent chargebacks.
❌ Cons:
❌ Requires Some Coding Knowledge: If you’re not using an e-commerce platform like Shopify, setup might be tricky.
❌ Limited In-Person Payments: Stripe is mostly online-focused.
❌ Longer Payout Times: Payments take 2-7 days to hit your bank account (unless you pay extra for instant payouts).
💰 Stripe Transaction Fees (as of March 2025):
| Transaction Type | Fee |
|---|---|
| Online transactions | 2.9% + $0.30 |
| In-person payments | 2.7% + $0.05 |
| Manual keyed-in payments | 3.4% + $0.30 |
👨💼 Best for: If you’re running an online store, SaaS company, or subscription service, Stripe gives you the most flexibility.
Square: The Best for In-Person Transactions
Best for: Brick-and-mortar businesses, restaurants, and small retail shops.
If your business relies on in-person sales, Square is the best option. It’s an all-in-one system with free POS software, a mobile card reader, and online payment support.
✅ Pros:
✔️ Free POS System: Comes with a free card reader and mobile app.
✔️ Flat-Rate Fees: Simple, predictable pricing.
✔️ Fast Payouts: Get your money the next day or instantly (for a small fee).
✔️ No Monthly Fees: Unlike PayPal, Square doesn’t charge extra for basic features.
❌ Cons:
❌ Limited International Support: Only available in a few countries.
❌ Not Ideal for Large Online-Only Businesses: While it supports online sales, it’s designed for in-person businesses first.
❌ Occasional Account Freezes: Some users report sudden account closures without warning.
💰 Square Transaction Fees (as of March 2025):
| Transaction Type | Fee |
|---|---|
| Online transactions | 2.9% + $0.30 |
| In-person payments | 2.6% + $0.10 |
| Manual keyed-in payments | 3.5% + $0.15 |
👨💼 Best for: If you run a brick-and-mortar business and need a reliable point-of-sale system, Square is the best fit.
Final Thoughts: What is the Best Payment Processor for Your Small Business?
- Use PayPal if you want a trusted, easy payment option with fast transfers.
- Use Stripe if you need customization, global payment support, and lower fees for large transactions.
- Use Square if you run a physical store and need an all-in-one payment system.
No matter which processor you choose, your website needs to be optimized to work seamlessly with it.
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