Lots of options these days for Credit Card processing—you can see their pricing is virtually identical. PayPal used to have per-item fixed fees and that adds alot for small transactions but now they both offer percentage-only fees.
2016 PayPal Here
2.7% Per swipe (or “dip” of an EMV chip card)
3.5% + $0.15 to key in cards
2.75% Per swipe (or “dip” of an EMV chip card)
3.5% + 15¢ Per manually entered transaction
- Both services offer a free or cheap “swipe only” little card reader
- Stripe has a new (inexpensive) small reader for “swipes” and “chips”
- Both services offer a more expensive reader that takes Apple pay
PayPal offers a small “swipe” only reader
and a bigger unit that does all 3: “swipes” “chips” and apple pay
Square has a new small reader for “swipes” and “chips” (their old reader was for swipe only)
and a bigger reader for apple pay only
and also a new “RED
” one that raises money for charity
So for compactness, price and versatility, Square wins out with their super compact new reader. It doesn’t need batteries either.
Note that using swipe-only is fine for the next few years at least – but at some point new cards won’t have magnetic stripes.
Note also that setting up a Square account might take a while – they might run a credit check or something since it’s a new account and maybe there would be other delays since it is a business account. More people already have a PayPal account so it can be simpler to use that.
Accounting for Taxes
For either service, if you make $20,000 in payments AND at least 200 transactions then you will receive a 1099K form. This is a fairly new kind of 1099 and it means these services are reporting your income to the IRS. For many this will be a convenient way to track and confirm their yearly income but for others it will cause issues since some small businesses will get the 1099k and also a 1099 “misc” from clients who are not clear that they should no longer issue 1099 “misc” since they are paying via a third party service. Also, if you use PayPal for non-income transactions – like someone paying you back for a purchase – then you need to be aware the IRS will think all you incoming money is taxable income.
Other kinds of fees
for sending invoices:
2016 PayPal Here: 2.9% + $0.30 to invoice
1% for cross-border transfers
you can enter checks into the mobile app also
2016 Square: 2.75% Per swipe (or paid Square Invoice)