Stripe vs Square vs PayPal – Which Merchant Payment Processor is Better?

If you run a business in 2025, you almost inevitably end up choosing between Stripe, Square, and PayPal for getting paid. The thing is, these three aren’t interchangeable at all.

• Stripe processed about 1.4 trillion dollars in payments in 2024, roughly 1.3 percent of global GDP [1,2].
• PayPal pushed 1.68 trillion dollars in total payment volume with about 434 million active accounts by the end of 2024 [3,4].
• Block’s Square serves about 4 million sellers and processes around 241 billion dollars annually through its seller ecosystem [5].

Those are huge numbers, but they don’t answer the only question that matters to you:

Which one fits my business – my channel mix, average order size, and appetite for complexity?

This comparison focuses on that practical question, using up to date 2024–2025 data and avoiding the usual generic “best payment processor” fluff.

Who each platform is really built for

You can think of the three like this:

• Stripe – API first, ideal for online businesses, SaaS, platforms, and marketplaces that have at least some developer access.
• Square – Point of sale first, built around physical locations, simple hardware, and integrated software.
• PayPal – Network first, a giant consumer wallet and checkout brand that can boost conversion.

A quick high level snapshot:

If you mostly live online and want flexibility, Stripe is usually the default.
If you live behind a counter, Square’s ecosystem is hard to beat.
If your customers expect that yellow PayPal button, you probably shouldn’t remove it.

Core pricing in 2025: Stripe vs Square vs PayPal

Fee structures change over time, so here’s a simplified picture of standard US small merchant pricing as of late 2025. Always double check the official pages before making final decisions, because card networks and providers do update pricing [7–10].

Headline processing fees (domestic US, standard plans)

A few practical observations:

• Stripe tends to be slightly cheaper than Square for online card volume at basic tiers, especially when you add in dispute fees.
• Square can be very competitive for in person volume with its 2.6% + 0.15 USD structure, especially once you consider bundled tools.
• PayPal is often the most expensive per transaction, but you keep it because it can lift conversion and because millions of customers trust it [3,4,17].

What do those percentages look like on a real order?

Percentages are abstract. Let’s translate them into concrete costs as of 2025, using the common domestic online card rates:

• Stripe: 2.9% + 0.30 USD [7,8]
• Square (online, free tier): 3.3% + 0.30 USD [6,19]
• PayPal standard card processing: 2.99% + 0.49 USD [9,20]

At lower tickets, the fixed cents matter a lot. At higher tickets, the percentage dominates.

In a purely fee driven world, Stripe is usually cheapest for standard domestic online volume. In practice:

• If most of your revenue is in person and you like tight POS integration, Square often wins overall.
• If checkout trust and brand recognition matter, having PayPal alongside Stripe or Square can more than pay for itself in conversion uplift [3,4,17].

Payout speed and cash flow

Fees are only one part of the equation. When the money arrives in your bank account can make the difference between sleeping well and juggling rent.

Stripe

• First payout is often held for 7–14 days while Stripe builds a risk profile for your account [16,18].
• After that, you can pick daily, weekly, monthly, or manual payout schedules, with funds usually arriving in 1–4 business days depending on your bank and country [16].
• Instant Payouts to eligible debit cards and bank accounts cost an additional percentage fee but typically deliver in minutes [16].

Square

• Standard transfers from Square to your bank typically arrive in 1–2 business days at no extra cost [6,19].
• Instant and same day transfers are available for roughly 1.75% of the transfer amount, with funds often available within minutes, including evenings and weekends [17].

PayPal

• Standard withdrawals to a linked bank account usually complete in 1–3 business days, depending on the bank [18].
• Instant transfers to an eligible debit card or bank account are offered for an extra percentage fee [9,18].

For businesses with very thin cash buffers, the combination of Square POS + instant transfer can feel more seamless day to day, especially in food and beverage. If fast access to money is a major factor for you, you might also compare these timelines with consumer facing apps that specialize in instant transfers, such as Cash App.

For online only businesses, Stripe’s flexibility in payout schedules and support for multiple bank accounts per platform account can be more important.

Feature and ecosystem differences that actually matter

Stripe: infrastructure for online businesses

Stripe is at its best when you’re building something more complex than “take a card payment and be done.”

Some key points:

• Stripe supports hundreds of local payment methods and 135+ currencies, which is a big deal if you sell cross border [2,7].
• Products like Stripe Billing and Stripe Connect power subscription businesses and marketplaces globally, not just card payments [1,2].
• Stripe has leaned heavily into AI and machine learning for fraud, revenue optimization, and automation, which partly explains its growth to 1.4T USD in TPV [1,2,15].

The tradeoff: you get a flexible toolbox, but to really exploit it, you either need developer resources or no code/low code tools built on top of Stripe.

Square: POS first, small business operating system

Square’s core advantage is that it bundles a lot of infrastructure into a single vendor:

• Card readers, registers, and terminals.
• POS software tailored for food & beverage, retail, and appointments.
• Invoices, inventory, employee management, sometimes even banking and loans.

Square’s fees page and help center make it clear that these services are meant to be predictable and bundled – tap, dip, swipe, online, ACH, all with clear rates and caps [6,19]. There is typically no separate dispute fee, which can matter a lot if you see occasional chargebacks [12,19].

If your mental model is “I just want my store to run,” Square is often a better fit than trying to glue together Stripe + third party POS.

PayPal: conversion, trust, and new plays (crypto + global rails)

PayPal looks different again:

• It has 434 million active accounts and is supported on millions of sites worldwide [3,4,10,17].
• Studies and merchant data sets consistently show that offering PayPal at checkout can raise conversion, especially on mobile and for international buyers [4,17,20].

In 2025, PayPal is also trying to evolve beyond “the old PayPal button”:

• It announced “PayPal World”, a cross border platform that links to systems like India’s UPI and other local wallets, aiming to simplify global payments [18].
• It has rolled out “Pay with Crypto”, letting US merchants accept over 100 cryptocurrencies with relatively low transaction fees compared to some card payments [16].

On the flip side, PayPal has also increased some merchant fees in 2025, particularly for Pay Later and certain advanced card flows, which sparked pushback from small businesses [17]. It remains powerful, but not cheap.

Risk, disputes, and “gotchas”

All three platforms handle risk and disputes differently.

• Stripe charges around 15 USD per dispute. If you lose, that’s on top of the original processing fees [11,21]. It also has fairly strict risk monitoring, so high risk verticals may trigger holds or reviews.
• Square generally does not add a separate dispute fee for standard card transactions, effectively baking that risk cost into its processor margin [12,19]. For small sellers who only see the occasional friendly fraud chargeback, that simplicity is very attractive.
• PayPal leans heavily into buyer protection, especially for physical goods. Dispute and chargeback fees are baked into its merchant fees schedule and can sit around 20 USD per dispute in the US; merchants often complain that its default stance favors buyers [9,13,20].

Beyond pure fees, there’s also account stability and policy risk. If your business model or product category is even slightly edgy (supplements, tickets, digital goods, adult adjacent, etc.), it’s smart to:

• Read the “acceptable use” policies carefully.
• Avoid putting all your payment volume on a single provider.
• Keep backup options (for example, Stripe + PayPal, or Square for in person plus Stripe online).

Which one should you choose in 2025?

Here’s a simple, opinionated guide based on common profiles.

Mostly in person (local retail, cafe, salon)

Use Square as your primary processor.

• The POS hardware and software feel cohesive.
• In person rates are competitive, and instant deposits are easy to toggle on and off.
• You don’t have to think like a developer to run your business.

You can later add Stripe or PayPal for an ecommerce store, but Square alone can run a surprisingly sophisticated operation.

SaaS, subscriptions, or developer heavy online business

Use Stripe as your backbone.

• Its billing, invoicing, and marketplace tools are mature and widely adopted [1,2].
• The pricing is transparent and competitive for card and ACH.
• It’s easier to expand into multiple countries and payment methods from a single Stripe integration.

Add PayPal (and maybe local wallets like Klarna, etc.) as additional “buttons” for conversion once you have core flows working.

Established ecommerce store with consumer audience

Use Stripe or Square for card rails, but keep PayPal at checkout.

• You might not love the fees, but for many consumer sites, turning off PayPal would immediately reduce conversion with no offsetting gain [3,4,17].
• For card payments, Stripe or Square will usually be cheaper, so you can nudge users toward those, but not at the expense of trust.

Mixed physical + online presence

A common pattern in 2025 is:

• Square in store (POS, inventory, team management).
• Stripe online (subscriptions, advanced web checkout, APIs).
• PayPal available as an optional wallet.

That combination avoids lock in and uses each provider where it shines.

References

1. Stripe. “Stripe’s total payment volume reaches $1.4T, fueled by long standing investments in AI.” Newsroom, Feb 27, 2025. Accessed 2025.
2. Stripe. “Total payment value (TPV): what it means, why it matters, and how to use it wisely.” 2025.
3. PayPal. “Who we are – History and facts.” Company facts as of year end 2024. PayPal
4. Capital One Shopping Research. “PayPal Statistics (2025): Users, Market Share & More.” Sept 10, 2025.
5. Block, Inc. “Block, Inc.” Company overview and statistics, 2024.
6. Square. “Understanding Our Fees – Square Payments.” US fees breakdown, accessed 2025.
7. Stripe. “Pricing & Fees – US.” Official Stripe pricing page, accessed 2025.
8. Swipesum. “Guide to Stripe Fees & Rates for 2025.” Oct 22, 2025.
9. PayPal. “Fees – Merchant and Business – PayPal US.” Oct 29, 2025 and current online version.
10. PayPal. “POS Fees – PayPal US (Zettle).” Card present pricing, accessed 2025.
11. Justt. “Stripe Dispute Fee 2025: What Merchants Need to Know.” May 8, 2025.
12. Square. “Learn about Square fees.” Help Center article, accessed 2025.
13. PayPal. “US Merchant Fees – Chargebacks and Dispute Fees.” PDF and web documentation, Oct 29, 2025.
14. Square. “Square Processing Fees, Plans, and Software Pricing.” Pricing page, accessed 2025.
15. Stripe. “Stripe Annual Letter 2024.” Feb 27, 2025.
16. TechRadar Pro. “PayPal will now accept payments in crypto – but with one crucial condition.” 2025.
17. The Sun / Money. “PayPal sparks backlash after company ‘updated’ its pricing…” Jan 2025.
18. NerdWallet. “Stripe Fees: Pricing and Calculator.” Oct 10, 2023 (still consistent with 2025 base pricing).
19. Square. “What are Square’s fees?” Square Help Center, US.
20. Tipalti. “PayPal Fees in 2025: What They Cost & How to Avoid Them.”
21. Stripe Support. “Dispute fees FAQ.” Accessed 2025.