Stripe vs Square vs PayPal - What's Best for Your Business

When you’re taking payments for your business, you’ll need a payment gateway. And there a lot ot chose from! You’ll find time and again that there are about 3 main options – and you’ll need find the right one for you. We’ll explore Stripe vs Square vs Paypal in depth to help you make the right decision.

Stripe is one of the leading digital payment gateways for e-commerce businesses around the world. Processing billions of dollars in transactions each year, working with Stripe is a sound choice for your business. And it’s just become even easier to use. 

Stripe have announced their partnership with Xero which means you can have your invoices paid via Stripe with credit card – helping you to get paid faster. 

How Stripe & Xero Work Together

Stripe is a simple add-on for your Xero account which can be set up in just a few clicks. If you’re not currently using Stripe, you can even create a brand new account from within Xero to get started. 

Now when you send your invoices via Xero a “Pay Now” button will be enabled on your online invoices, which means your clients can easily pay via their credit or debit card through this gateway immediately. 

When working with add-ons, there is an extra fee involved. However, with Stripe, you can decide who pays this processing fee – you or your client. You can also choose how often payments will be deposited into your account. 

Sounds great, right? But how do you know Stripe is the best solution for your business?

What About PayPal or Square?

When you’re selling a product or service, there are a lot of payment software options for your business. Along with Stripe, PayPal and Square are some of the most popular in the Australian and international markets. And deciding what’s best for your business can be confusing and VERY time consuming. 

To help you make an informed decision and understand the services a little better, we’re going to review our 3 favourite platforms and discuss what value they can add to your business with a focus on cost and their best features. 

What’s the Price Comparison?

One of the key components of choosing the right platform for your business is the cost. 

Your solution needs to fit into your budget and not affect your ROI too heavily. This might not be a big issue if you’re selling a pricey service or product, but if you’re selling a lot of smaller and less expensive items your transaction fees can have an effect on your take-home revenue. 

Stripe, Square and PayPal all offer very competitive transaction fees with nearly the same amounts. 

All three services don’t have monthly fees – so if you’re not selling you don’t have to pay which is a bonus! 

  • For an online payment with Stripe you’ll pay a processing fee of 1.75% + 30c for domestic cards and 2.9%, plus $0.30 for international cards.
  • Square’s processing fees are 2.2% on online transactions and 1.9% for in-person transactions. Square does not accept international card transactions.
  • For PayPal you’ll pay a fee of 2.6%, plus $0.30 for Australian cards and 3.6% plus a fixed fee for international transactions. 

When you’re paying this kind of fee for a lot of smaller sales it can really add up, so you’ll need to balance out those fees with more sales, higher prices or less expensive product costs. 

As you can see these are all priced competitively, so you’re unlikely to be saving much if you are basing your decision on price. 

Which is Best For Your Business?

The key differences between these systems come into play when we start to look at the features for each and what kinds of businesses they may be more suited to.

Stripe Features

If you’re running an E-Commerce business or something that’s quite technical online, Stripe could be your best bet. Stripe comes with an API that you can use to create a completely custom check-out process on your website. This is great if you’re selling something with add-ons or options you want to cross-sell. However, using this API is technical and you’ll need a developer – or the budget to hire one. 

Now that Stripe is offered as an add-on for Xero, it’s also great for B2B companies as you can invoice your customers directly through Xero with a credit or debit payment option. 

Stripe doesn’t offer an off-line payment solution, so if you need to perform any in-person transactions, this isn’t the platform for you.

PayPal Features

For smaller online businesses, PayPal may be the simpler option as you won’t need a developer to set up the payment gateway on your site. PayPal can integrate easily with a number of different website platforms such as WordPress and Shopify so you don’t have to stress when getting it set up. 

While all the services include standard use protection for the purchaser, PayPal has a stronger brand recognition. So when it comes to checking out, people know that their details will remain safe and could be more likely to complete a transaction. 

If you’re working with subscriptions and recurring billing, PayPal has these options built in to its check out systems. When using either Stripe or Square, you’ll need to add these manually through the online dashboard. 

PayPal Here is also now available for in-person transactions. However, these services are not yet robust enough to be an adequate solution for a brick and mortar store. 

Square Features

If you own a store or other type of brick and mortar business, Square is the solution you’ve been looking for. Square offers a complete in-person POS solution for your business, including hardware. 

If you’re looking to expand your store to online, or have both already, then Square is still a viable option as Square does offer online solutions. However, if you work primarily online, it’s recommended to choose between PayPal and Stripe. 

Square also doesn’t offer an international service at this stage, so if you’re hoping to expand to other countries, you’ll need to find another solution.

What Should You Choose?

When it comes to making the final decision for your business, at the end of the day you can’t really go wrong. All systems are reliable and robust but there is still a best solution for you.


Choose Stripe if you run a larger business with a technical team or budget and don’t offer any in-person transactions. 

Choose PayPal if you run a smaller and primarily online business without a large team for technical support. 

Choose Square if you run a brick and mortar store or work in mostly in-person transactions.


The good news though, is that all solutions are compatible with Xero. This means that no matter what service you sign up with, you can automate your bookkeeping via their add-ons. Manage cash flow, invoices, receipts, bills and more for your entire business in one easy-to-use platform.


Still not sure which platform is right for you? Simply get in touch with our experienced team of bookkeepers and we can find the best solution for you and help you hook it up to Xero, giving you peace of mind. Call us on 1300 803 134 or get in touch online.


Prices and fees are correct for Australia as of July 2019.