PayPal Here has taken the mobile payments market by storm with a smartphone processing solution that in several ways gets the better of the current market leader, Square.
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PayPal Here Vs. Square
With PayPal Here featuring live customer support, immediate funding, and support for multiple payment channels including free check acceptance, it seems as though Square has some catching up to do despite the company’s rapid growth. Let’s take a look at how the two companies compare on key areas such as pricing, customer service, equipment, and more.
Credit & Debit Card Processing Rates
Keyed: 3.50% plus $0.15
Keyed: 3.50% plus $0.15
|A main competitive advantage that has allowed Square to hold the top spot in the mobile processing market has been the company’s ability to offer a flat processing rate with no credit card transaction fee. Until PayPal Here, competing mobile solutions relied on traditional merchant accounts often paired with a third-party mobile application like ROAMpay where transaction fees can range upwards of $0.25.|
PayPal Here has laid waste to what is perhaps Square’s most powerful competitive advantage by entering the market at 2.70% and $0.00 opposed to Square’s 2.75% and $0.00. PayPal’s deep pockets and established market presence make PayPal Here a formidable adversary, the likes of which Square hasn’t yet had to deal with.
*Square’s 2.75% rate applies to merchants who “on board” themselves. If you request a quote from Square or use the “get pricing” option on its website, you may be subjected to a per-transaction fee.
Check Processing Rate
|Check Processing Not Offered||Included free|
|Checks aren’t exactly mainstream these days, and the future of the check printing market is looking pretty bleak. But PayPal has been around a while, and the infrastructure to process and settle checks is already in place, so why not add another bullet point to the PayPal Here feature list?|
Start Up Cost
|Free, depending on reader||Free, depending on reader|
|Square and PayPal Here both supply mobile card readers and apps. The mobile readers for both Square and Here plug in to the headphone jack of an electronic device.|
The basic free reader from both companies only accepts magnetic strip credit and debit cards. Both offer a chip card reader, but it comes at an additional cost. Readers that also accept contactless payment methods are avaiable for a cost as well.
|No phone number, difficult/impossible to contact, just an online Help Center.||Phone number, email support, community support, more|
|Square’s customer service is virtually non-existent, and contacting a representative via phone is nearly impossible. Square seems to think that a simple online Help Center is enough support for its growing user base. While the company says that current business owners can get in touch by phone after receiving a merchant call-in code, many businesses still report difficulty getting in touch.|
PayPal Here, on the other hand, has all of the support channels you would expect for a company offering credit card processing services. PayPal provides phone, email, and online support for its users. And the company also provides support via a development community.
|No Credit Check Required||Credit & Background Check Required|
|Square will give the ability to process credit cards to virtually anyone. Whether this is a good thing or not is open for debate, but it’s a leg up on PayPal.|
Many complaints about PayPal Here stem from the credit check and background verification that PayPal requires before issuing a user an account.
|The main payment channel of both Square and PayPal Here is credit and signature debit (non-PIN) cards. Each company also offers a proprietary first name payment service that displays nearby customers on a vendors payment screen allowing vendors to charge customers by name or image.|
Square’s service is called Pay with Square, and PayPal Here identifies users through their PayPal account. Both services offer similar functionality, but PayPal’s user base is significantly larger. Looking past a somewhat dead heat with first name payment services, PayPal edges ahead with check processing and the option to accept PIN-based debit using a specific reader.
|Next Day||Immediate, through PayPal account|
|PayPal Here boasts the immediate availability of funds, and while this is faster than Square’s next day funding, Here doesn’t deposit funds directly into a user’s checking account. Instead, Here makes funds immediately available in a user’s PayPal account where they can access for purchases or withdraw via an ATM using a PayPal debit card.|
PayPal Here users that want to transfer funds to their own bank account must initiate a transfer from within their PayPal account, and the transfer process typically takes three days.
Square doesn’t make its users jump through a proprietary hoop to get their money. Square deposits funds directly into a user’s checking account the next day.
Fraud Protection & Security
|Encrypted Card Reader, Data Transmission, Etc.||Encrypted Card Reader, Data Transmission, Etc.|
|Although Square hit the market with an unencrypted card reader, the company has since cleaned up its act and both Square and PayPal Here are serious about security and fraud prevention. Both companies provide encrypted card readers and other security and fraud protection features. Both companies also offer EMV chip card capable readers, adding another layer of security.|
Supported Devices and Equipment
|iPhone/iPad, Android (Support for Older Devices)||iPhone/iPad, Android, Windows (magstripe reader only)|
|Although PayPal Here hit the market with support for only iPhone/iPad, the company now supports Android devices as well. Both companies now support iPhone, iPad and Android, but the edge goes to Square for supporting older operating systems.|
Square’s application will run on the iPhone 3G, but PayPal Here’s application is compatible only with 3GS phones and above. Check out PayPal Here’s supported devices for more information.
Both Square and PayPal offer chip-capable mobile card readers. The Square reader is priced at $29 as of 2018 and looks much like the previous reader. The EMV-capable PayPal card reader is a larger device with a built-in PIN pad and contactless technology. The PayPal card reader is priced at $79 as of 2018. Both companies have options for contactless payments, as well.
|United States and Canada||United States, Hong Kong, Australia|
|Square now provides service to Canada.|