Stripe vs Square Australia: all-in-one platform or building blocks for payments

Square and Stripe are two giant payment platforms with similar products, for very different businesses.

Square was initially focused on face-to-face merchants with its app-dependent card reader, but has since expanded services to online channels too. Stripe’s developer-centric online payments platform is made for custom solutions and bigger businesses, with or without EFTPOS terminals.

Let’s go through the main differences between the payment services.

No contract lock-in, but what about cost differences?

Stripe and Square both launched in 2010, and that comes across in their pricing structure: no archaic contracts, no setup fees, no monthly fees (barring some features) and no contractual obligations. This is the modern way that many startups, small businesses and professionals feel most comfortable with.

The main costs are instead pay-as-pay transaction charges.

Square transaction fees are deliberately simple: 1.6% for all EFTPOS machine payments regardless of the type of card and where it is from. It costs 2.2% for all keyed and online payments regardless of whether the merchant or customer entered their card details remotely or in person.

For in-person payments, Square is definitely cheaper. Stripe’s EFTPOS machines charge 1.7% + A$0.10 per domestic card transaction and 3.5% + A$0.10 for all other cards. Not only is there a fixed fee (A$0.10) per transaction, which makes small transaction amounts expensive – the domestic rate (1.7%) is also higher than Square’s (1.6%).

But you can save money if the majority of ecommerce payments are made with Australian cards because they cost just 1.7% + A$0.30, compared with Square’s 2.2%. International cards cost more than Square, though: 3.5% + A$0.30 per transaction.

The fixed $0.30 fee could become expensive if most transaction amounts are low ($0.30 of $5 is the equivalent of a 6% fee!). In addition, Stripe charges a 2% currency conversion fee on transactions paid in a different currency from the customer’s card.

With billing, Stripe merchants pay the same for one-off invoice transactions as the above rates for online payments. Automatically charging customers on a recurring basis costs less at 1% + A$0.30 per payment.

Standard payouts are free on both platforms, and both allow you to settle transactions instantly in your bank account for an extra 1.5% added to transactions.

PCI-DSS compliance (card security paperwork) is managed free of charge by Square, while Stripe encourages users to address this but with some support provided. This could cost extra depending on the level of protocols required for your business. Chargebacks cost A$25 each with Stripe, but are free with Square.

Complete webshop vs integrated checkout on your site

Though both platforms provide solutions for ecommerce, there’s a clear distinction in how this is done.

Square offers a complete, ‘all-in-one’ ecommerce platform with a website builder, payment system and hosting, as well as optional integrations with online ordering systems.

Unless you only need a basic online store, Square has a monthly subscription fee for hosting and advanced ecommerce features. It is very user-friendly – built for non-technical merchants keen to create and manage an online store without hiring someone to do it for them.

Image: Square

Square Online is for a complete website.

Image: Stripe

Stripe is commonly used as an online gateway.

Stripe does not provide a website builder or hosting, but it does serve as an online gateway (payment system for online checkout) to integrate within an existing website.

Certain all-in-one platforms like Wix and Squarespace allow you to easily activate Stripe as your online checkout without knowledge of coding. But using a Stripe checkout for a WordPress site requires adding a piece of code (Application Programming Interfaces/APIs) correctly into the system.

What’s great about this approach is the freedom to customise the style and features of the payment process – but it does require being comfortable with codes.

Square also offers APIs so you can use its payments system on a website that’s not hosted through Square. This allows customisations of style and function too. It is also possible to create payment links that go to a simple online checkout page we think is quite user-friendly on mobile phones.

Square is easiest for in-person selling

If you’re looking for a card reader and POS system without a complicated setup, Square is a go-to choice in Australia. We personally love its user-friendly point of sale apps for hospitality, retail and booking systems and nice-looking EFTPOS machines that most people can set up without a manual.

Square’s two main card terminals are:

• Square Reader ($65 incl. GST) – small card reader connecting with any Square POS app on a smartphone or tablet
• Square Terminal ($329 incl. GST) – portable WiFi terminal with POS app integrated on its large touchscreen

They can be purchased upfront or via interest-free payments over 3, 6 or 12 months. Square Reader is best for mobile payments, since it’s tiny, but it does need to be connected with an iPhone, iPad or Android device to accept cards. Square Terminal only works with secured WiFi, so is better for fixed premises where, for example, table service is required.

Photo: MobileTransaction

Square Reader.

Photo: MobileTransaction

Square Terminal.

Then there’s the hardware kits that look like they were designed by Apple:

• Square Register ($1,099 incl. GST) – register with a big, touchscreen POS interface and connected touchscreen card reader
• Square Stand ($149 incl. GST) – iPad holder with built-in chip and contactless card reading capabilities

They look very smart and are very easy to set up, as we noticed when we tested them (below photo).

Photo: MobileTransaction

Square Stand and Register.

Stripe, on the other hand, has EFTPOS terminals (‘Stripe Terminal’) that require a custom configuration with POS software. They include:

• BBPOS WisePad 3 (A$89 + GST) – small, push-button card reader that connects with an app
• BBPOS WisePOS E (A$329 + GST) – touchscreen card terminal that works independently or with an app
• Stripe Reader S700 (A$499 + GST) – independent touchscreen EFTPOS terminal

There are some ready-made apps that work with the BBPOS WisePad 3 reader, but they’re really not the best and often charge extra on top of each Stripe’s transaction fees. In Australia, certain POS systems like Abacus, or ecommerce software like Big Cartel, work with it via quick setup steps.

Still, we think most Stripe Terminal users choose the product because it works with their own, custom ecommerce solution and the EFTPOS machines are adapted around that.

Photo: MobileTransaction

Stripe WisePad 3 is the most affordable of Stripe’s EFTPOS terminals.

Square’s EFTPOS machines can be connected with a receipt printer, cash drawer, barcode scanner and other accessories to suit retail or food-and-drink environment.

What about surcharging? Square has this built in as a simple feature, even with the option to have it automatically switched on at weekends only to compensate for higher staff costs during that time.

Stripe’s terminals have to be configured around your particular point of sale and surcharging setup – none of this is straightforward initially. In all honesty, this is not the best solution if you’re going for a specialised, but straightforward, POS system.

Compared with other POS systems, Square is superior with its many ready-to-use features that suffice for most small, face-to-face businesses.

Other remote payments

Online payments are not just about online stores, as both platforms would agree on. The following payment functions are also offered:

Invoicing: Stripe calls it ‘Billing’ and Square calls it ‘Invoices’. Both allow you to send one-off or recurring email invoices that customers can pay through.

These can be managed through the web dashboard, but only Square has a dedicated (and free) invoice app. Then again, only Stripe can charge your customers automatically on a recurring basis as a subscription.

Virtual terminal: The feature-rich Square Virtual Terminal can be used as a standalone product with no monthly fees, just the transaction rate. It allows you to take MOTO (Mail Order and Telephone Order) payments.

Stripe can also activate a simple virtual terminal in the dashboard, but only wants you to use it as a backup solution. This is because Stripe is not geared towards remote payments keyed in by the merchant, while Square is.

Payment links: Only Square has an easy-to-use pay-by-link solution. It allows you to define a product or service with a fixed price and generate a payment link for it.

You can embed this as a button on a website, send it as a QR code or URL for a remote payment, or even create a donation link that allows customers to enter an amount to pay.

Image: Square

Square can generate payment links.

Image: Stripe

Create subscriptions with Stripe.

Advanced payment systems: Stripe and Square both allow you to build their payment system into any website or app of yours.

But Stripe is the most advanced with its extensive API documents that are easy for developers to learn. This is its key strength: Stripe has many options to build complicated payment systems for marketplace platforms, subscription services, loyalty apps and much more.

Transactions, payouts and reports

Even with regards to the payment systems, there are big differences. Let’s start with the similarities between Square and Stripe:

• Transactions automatically process to your bank account
• eftpos, Visa, Mastercard, Maestro, American Express, Apple Pay and Google Pay are accepted

Square also accepts Samsung Pay through its card readers. But Stripe has the option to accept BECS Direct Debit online as well.

There are some slight differences in payout times. Square settles transactions in your bank account 1-2 days after each transaction. Stripe, however, takes up to two weeks to settle your first payment in your bank account. From here, Stripe will automatically settle every two days unless manually changed.

Both offer instant transfers for an added fee of 1.5%, where you receive the payout within minutes in your bank account.

Detailed transaction reports are free on both platforms. Businesses with SQL coders on hand can pay a monthly fee for Stripe Sigma (fees will change depending on amount of processed transaction), providing access to in-depth user data from the payments processed in your business.

Square’s free analytics detail products and services sold, as long as you make use of the inventory library linked with all sales channels.

Customer support

Whereas Square support only respond to customer queries on weekdays between 9am and 5pm, Stripe support boasts round-the-clock availability every day of the year.

However, it doesn’t take much digging to find more complaints about Stripe than Square.

For example, there’s no phone number for Stripe so you’re reliant on email, messaging chat or requesting a callback. Square has a phone number and email address for support queries.

We should emphasise Stripe has significantly more reviews in Australia, so it’s easier to find more complaints about it than Square.

Both companies have complaints about slow responses and frozen accounts with funds inaccessible to their owners. Account holds happen on many payment platforms, but it appears that Stripe users experience them more in Australia compared with Square.

Stripe has a good reputation when it comes to solving general queries, but anything more serious appears to be more difficult for the support team to resolve. This issue is amplified with Stripe’s lack of phone support.

Square similarly gets complaints about their support team, but many more reviews indicate happy users appreciative of the overall service and ease of use.

Our verdict

Choosing Stripe or Square depends a lot on your resources, business model and tools required.

Square is built for the lay merchant who wants a very user-friendly, complete system that can be managed easily without special knowledge. In particular, Square works great as a low-cost POS solution for merchants that also want remote payment options thrown in the mix for free.

In contrast, Stripe is intended for the tech-savvy, online-only business that needs a unique payment system adapted to their business model. It’s mainly enterprises or bigger businesses that benefit – they get lower card processing fees as well.

Unless Stripe is already integrated on your ecommerce platform of choice, it takes some coding knowledge to tailor a solution. This will be overkill for many who just need a simple payment system like Square’s.