Two popular payment-processing services for small businesses are Square and Stripe. These have grown in popularity because they have a payment processing rate that is fixed and they have also managed to draw in big supporters like Starbucks that use and promote their systems. As a small business you will need to understand how each of these work.
Square was started as a mobile processor for small businesses that operate on the go. They began by targeting service-based businesses so that they could accept credit and debit cards on the job. Square started to gain popularity because of its free and convenient adapters that operate through a phones headphone jack and the flat rate of 2.75% as a processing fee and there are no monthly service fees to pay.
Square then went on to set up a physical Square Stand that turned iPads into cash registers. They have also added other product additions like appointment management, inventory management, invoicing, analytics, online ordering, capital management tools and gift cards. Square Cash is a person-to-person mobile payment platform.
Stripe is an Internet payment processing system that charges 2.9% and 0.30 cents per transaction. There are no monthly service fees and the business owners are only charged for what is processed. Stripe was created with online developers in mind so that it was easy to integrate a variety of online payment processing tools and plugins.
Stripe is not meant for in person payments and is focused on online transactions. The higher transaction cost of Stripe is due to the higher probability of fraud with online transactions.
The major difference is the way that the payment information is acquired. Square is used for in person payments so the card is present and swiped through the card reader. Stripe is for Internet transactions as the card is not present.
Square and Stripe are aimed at smaller businesses that do not want to pay monthly transaction fees or have to pay for expensive processing equipment.
They both have automated direct deposits that occur within a few days of processing each transaction.