Stripe, PayPal and Square are some of the leading e-commerce payment systems, and an e-commerce payment system is a system that facilitates the acceptance of electronic payment for online transactions. In this day and age where it is odd for a business not to have an online presence, e-commerce payment systems have become increasingly popular.

Credit cards have become one of the most common forms of payment for online transactions. As a matter of fact, statistics shows that in the United States of America and Canada, almost 90 percent of online retail transactions were made with this payment format.

Credit cards are obviously the leading form of online payment but they can be expensive for the merchant to accept because of the inherent transaction fees. Debit cards constitute an excellent alternative with similar security but with usually much cheaper charges. Besides card-based payments, alternative payment methods have emerged and sometimes even claimed market leadership.

But for the purpose of this article, we will be considering Stripe, PayPal and Square.

A Quick Overview All the Three Payment Platforms

Stripe no doubt is one of the most suitable options for a brand new digital startup. As a startup, Stripe will help you establish the business and grow it. PayPal is a global e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders. Even at that, PayPal doesn’t outshine others, and so if you are a small business owner with both online and offline sales, Square is ideal for you. It might interest you to know that Square makes available loan packages to small businesses who truly want to expand and grow.

Stripe Online Payment Platform

Stripe is no doubt one of the leading online payment platforms and it is accepted all across the globe. Good enough, Strip accepts the major credit cards and debit cards used all across the world and they accept some other unpopular payment medium such as AliPay, Android Pay, Apple Pay, and Bitcoin amongst others. As a matter of fact, Stripe supports over a hundred currencies and it offers a few methods of online payment. In 2015, Stripe went further to add a Relay product that allows developers to create a Purchase button in third-party apps like Facebook, Pinterest, and Twitter.

Aside from the above, Stripe also accepts Automated Clearing House (ACH) payments – which might be an unusual model if you are just starting out. Automated Clearing House (ACH) is an electronic network for bulk financial transactions that is accepted all across the United States. Automated Clearing House (ACH) is used for large volumes of business transactions that are carried out in big batches.

Over and above, Stripe provides support with a whole range of business operations as part of their service offerings. For example, Stripe Atlas allows a company (even one outside the US) to incorporate as a US business and provides them with a digital US bank account. They sell themselves on being able to provide this service to companies all over the world.

PayPal Online Payment Platform

When we talk about pacesetters in online payment, you will sure mention PayPal. As a matter of fact, PayPal, was the company that popularized digital payment which is why it is now accepted by a wide range of businesses with online presence. PayPal offers a very modernized and seamless payment experience. All you need to get started when making online payment with PayPal is just your email address and your password. The fact that PayPal makes online payment pretty simple does not rule out the fact that it is a highly secured online payment platform.

As a matter of fact, PayPal has a full service approach that gives users the ability to track and monitor their online transactions. On the other hand, PayPal concentrates a lot of its business services at small or medium sized businesses leaving out larger corporations. A major area where PayPal is looking towards providing additional value is in the provision of company loans and they are providing loans worth up to 18 percent of your PayPal revenue.

The loan service provided by PayPal is targeted towards their offline customers who are processing payments through PayPal and want to expand. It is easier to track businesses with physical presence than businesses with just online presence without a physical address.

Square Online Payment Platform

Square is a slightly different online payment service in that they combine the unique services offered by their competitors. While Square perform most of the same services as Stripe and PayPal, the actual exclusive selling point of Square is their point of sale (POS) system. When you sign up with them, Square sends you a card reader on signing up (contactless readers come at a fee) and provides you with the software you need to manage an offline store. This allows for all your sales, both online and off, to navigate through the same payment platform; making it easier to track and manage your company’s performance. One major advantage of using Square is that they accept all the normal credit and debit cards available for use not just in the United States, but all across the world.

Square ensures that they structure their service so that it can manage physical sales of goods and things like professional services. Their calendar and booking system is designed for service provision, allowing a customer to book and pay online easily and hitch free. These are some of the features that distinguish Square from other online payment services providers.

It is important to point out that Square also has value added services designed towards assisting entrepreneurs, just like the PayPal loans system. Unlike PayPal, Square offers virtual loans based on your business performance. As long as all your sales activity is being routed through their platform, they are able to leverage machine learning to calculate what kind of loan they could offer you – and that you can afford to pay.

If you are making use of Square, you will note that on your Square dashboard, you can easily check if you are qualified for their loan and how much loan you can access. Square designed their loan system in such a way that as your business grows, the amount of loan you can access will automatically change to reflect your improved performance. Good enough, it only takes just few clicks and, if approved, the money is credited into your account on the next business day.

After the loan is credited into your account, Square then takes loan repayments directly from your sales. With that, you don’t have to bother yourself about defaulting as long as you keep generating sales for your business. The process helps small businesses improve their accounting process and of course enable them to concentrate in marketing their products and services. You can also pre-pay at no additional cost. As for the last count, Square can boast to have given out approximately $1.5 billion in funds to over 130,000 small businesses, with funding amounts ranging from $500 to $100,000.

Comparing Stripe vs PayPal vs Square

When comparing Square and PayPal as it relates to mobile payment processing, it would be noted that Square is more preferred than PayPal because Square’s mobile POS system delivers a full range of sales, inventory and business management features. PayPal mobile POS simply diminishes by comparison, especially in one key feature; the offline model. Unlike PayPal and Stripe, Square enables its users accept mobile payments and complete sales without an internet or cellular connection.

Apart from the fact that Stripe, Square and PayPal are quite similar in mobile processing, all of them allow its users accept payments using mobile devices like smartphones or tablets, and provide reliable, low-cost card readers.

It is important to clearly state that Stripe, Square and PayPal offer many of the same mobile selling features – They support multiple mobile users on one account, they accept all major credit cards, plus eWallets like ApplePay and AndroidPay, they accept swipe, chip cards, and contactless (eWallet) payments. So also, they support a product list and they all record customer data and send e-receipts. They offer records check and cash payments and deliver a variety of business sales report as required.

When it comes to managing in-store sales, it is obvious that Square comes top when compared with Stripe and PayPal. Unlike Stripe and PayPal, Squares’ strongest offline advantage is of course it’s free, and its quite robust POS software. Square delivers a wide range of business management tools geared towards helping retailers, dining establishments, service providers, and others run efficient, profitable day-to-day operations. Plus, it offers a wide range of sleek in-store checkout registers suited to any sales need and budget.

In recent time, PayPal has started moving into the in-store sales arena and offers iPad-based registers, but when compared with Square, its POS system has a long way to go. When compared with PayPal as it relates to managing in-store sales, Square’s full suite of inventory, sales, employee, and customer management tools is most preferred.

Stripe, Square and PayPal all offer online invoicing for free with very similar invoice creation, payment, and tracking features, hence a customer can afford to settle for any of them based on this feature.

So also, Stripe, Square and PayPal allow their users create invoices online using computer or mobile POS software and email them to customers. Once received, customers can click the Pay button to pay online, and also pay the credit card processing fee. Stripe, Square and PayPal handle automatic recurring payments for things like subscriptions, monthly services, lesson fees, tuition, and so on. On the other hand, PayPal’s recurring payments feature is more autopilot than Square and Stripe and they can handle high-volume needs.

Square comes tops when compared with Stripe and PayPal. Square provides easy to use payment processing services that cover all types of sales: mobile, in-store, invoicing, recurring payments, virtual terminal, and online payments, with fees that meet or beat PayPal in most instances. So also, Square’s free point-of-sale (POS) software includes a full suite of sales, inventory, customer, and employee management tools that can benefit all types of businesses. It is not so for both Stripe and PayPal.

No doubt, PayPal is a leader in the online payment industry and if online sales are your focus, it’s worth serious consideration. But, if you hope to move into multichannel sales, both online and off, Square and even Stripe can be the better choice of these three payment processing platforms. PayPal’s features just haven’t kept up in several important offline selling areas, plus you pay a fee for things that Square and Stripe offer for free, like a virtual terminal and recurring payments.

Lastly, Stripe is a great option for a range of use cases because they have in place a well customized e-commerce process. Stripe is not great for companies looking to make offline sales or companies that want to accept PayPal through the same system. When compared with Square and PayPal, Stripe is a very powerful solution to many business needs and could be a very good option for a new business just starting up and wanting an infrastructure in which to leverage on especially as it relates to loans and business support. No doubt, this is one of Stripe’s strongest competitive advantages especially when compared with Square and PayPal.

Ajaero Tony Martins