Stripe vs PayPal vs Square: what each really charges to take a card

Everyone compares payment processors on the percentage: 2.9 against 2.99 against 3.3. That is the wrong number to fixate on. The flat per-transaction fee, the 30 or 49 or 15 cents tacked onto every sale, is what actually decides which processor is cheapest for you, and it decides differently depending on how big your average order is and whether you sell online or in person.

The standard published US rates

These are the everyday, non-negotiated rates each processor publishes for 2026. Volume deals and interchange-plus pricing exist above them, but this is the shelf price most stores actually pay:

• Stripe, standard online card: 2.9% plus 30 cents.
• PayPal, branded PayPal button: 3.49% plus 49 cents. Plain card through PayPal: 2.99% plus 49 cents.
• Square, online: 3.3% plus 30 cents on the free plan (2.9% plus 30 cents on a paid plan).
• Square, in person (tap or dip): 2.6% plus 15 cents on the free plan.
• Square, manually keyed or card on file: 3.5% plus 15 cents.

The fixed fee is what flips the winner

On a $100 order, the percentage does most of the work, so the ranking looks calm: Stripe costs $3.20 (2.9% plus 30 cents), a plain card through PayPal costs $3.48, Square free online costs $3.60, and the branded PayPal button costs $3.98. A spread of about 78 cents.

Now shrink the order to $25. Stripe costs about $1.03, an effective rate of 4.1%. The branded PayPal button costs about $1.36, an effective 5.5%. The 49-cent fixed fee, harmless on a $100 order, is now nearly 2% of the sale on its own. On a $10 order that same 49 cents is 4.9% before a single percentage point is added. This is why average order value, not the headline rate, is the first thing to check: the smaller your typical order, the more the fixed fee dominates and the more the cheapest-percentage processor can still be the most expensive one.

PayPal is really two prices

PayPal is the one people most often quote wrong, because it charges two different rates through the same checkout. When a buyer pays with the branded PayPal button (logging into their PayPal balance or saved account) you pay 3.49% plus 49 cents. When a buyer types in a plain card, you pay 2.99% plus 49 cents. Most stores get a mix, so the real blended PayPal cost sits between the two, pulled toward whichever your buyers actually use. Quoting PayPal as a single number hides half a point of margin either way.

Square splits online and in person

Square is the mirror image of a web-first processor. Online it is the most expensive of the three on its free plan, 3.3% plus 30 cents, and you only reach 2.9% plus 30 cents by paying for a plan. In person it is the cheapest by a clear margin: 2.6% plus 15 cents, with a fixed fee half the size of the others, which is exactly the range where a small fixed fee matters most. If most of your sales happen across a counter, Square usually wins; if most happen in a browser, it usually does not. The one rate to avoid is keying a card in by hand at 3.5% plus 15 cents, so save the card properly or take it on the terminal.

What none of these published rates include

The shelf price assumes every order sticks and every card is domestic. Three lines sit outside it, and each one only pushes your real rate up:

• International cards cost more. Each processor adds a cross-border surcharge when the buyer is abroad; PayPal publishes this as an extra 1.5% on international transactions, and any currency conversion adds a further fee on top.
• Refunds do not give the fee back. When you refund an order the customer gets the full amount, but the processor keeps the fee it already charged, because it has to move the money both ways. A returned sale costs you the fee on money you no longer have.
• Chargebacks cost more than the sale. A disputed charge pulls back the order total plus a flat dispute fee, immediately, and you have usually already shipped the goods.

The cross-border line that can dwarf the rest: currency conversion

That last bullet hides the fee that catches out anyone selling across borders, because it is charged as a percentage of the whole sale, not a flat add-on. When a buyer pays in a currency you do not settle in, the processor converts it and keeps a spread over the real exchange rate. That spread is where Stripe and PayPal part company hard, and it is nowhere on the headline comparison.

Stripe converts at 1% over the base rate, and separately adds 1.5% on top of the base when the card itself is foreign. So a US account taking a euro card and settling to dollars runs 2.9% plus 30 cents, plus 1.5% for the international card, plus 1% to convert, about 5.4% plus 30 cents on that sale. PayPal converts at a far wider spread: its published currency-conversion rate is 4% over the base exchange rate for most conversions (3% on some), so a plain card through PayPal at 2.99% plus 49 cents, plus the 1.5% cross-border surcharge, plus the 4% conversion, lands near 8.5% plus 49 cents on the same euro sale. The conversion line alone is four times what Stripe charges to do the same job.

Square barely enters this comparison, because a US Square account settles in dollars and does not offer merchant-side currency conversion the way the other two do, running each country as a separate local account. So the cross-border conversion trap is really a Stripe-versus-PayPal story, and it can outweigh every fraction-of-a-percent gap in the headline rate you were comparing. It is also partly avoidable: you can often dodge the conversion by holding and settling in the currency you receive, or by letting the card network convert on the buyer side, rather than letting the processor convert to your home balance at its own spread. Check which currency each processor is set to settle you in before you assume the domestic rate is the rate you pay. (List prices, checked July 2026; they move and vary by country and account.)

What a dispute actually costs, processor by processor

A refund at least returns the sale amount to the customer and stops there. A chargeback, where the buyer disputes the charge through their own bank, is worse: you lose the order total, you have usually already shipped, and two of these three processors add a per-dispute fee on top. This is the line the pricing pages bury, and it is where the three differ most:

• Stripe charges a 15 dollar dispute fee on every chargeback, on top of losing the sale amount. Since a 2025 change it also adds a separate fee when you choose to contest a dispute, so fighting one and losing can cost more than letting it go.
• PayPal charges a chargeback fee, 20 dollars in the US, and a separate dispute fee that rises to 30 dollars per case for sellers whose dispute rate passes 1.5% on more than 100 recent transactions. Seller Protection can waive the fee on eligible transactions.
• Square is the outlier: it charges no per-dispute fee at all, the only one of the three that does not. You still lose the disputed amount while the case is reviewed, but there is no extra penalty stacked on top.

In every case the original processing fee is not returned when you lose, so a disputed 100 dollar sale on Stripe costs you the 100 dollars, the 15 dollar dispute fee and the 3.20 dollars you already paid to take the card. On a thin-margin product one chargeback can wipe out the profit on a dozen clean sales, which is why the dispute line matters more than the fraction-of-a-percent gaps in the headline rate.

How fast you get paid, and what faster costs

The processing fee is what it costs to take the card. When the money actually reaches your bank is a separate question, and if you cannot wait for the standard schedule, all three charge a second fee to speed it up. That instant-access fee stacks on top of the processing fee, so it belongs in any honest total but never shows up in the headline comparison.

The free, standard timing for a US account in 2026:

• Stripe pays out on a rolling two-business-day schedule (T+2) for an established US account, and schedules your very first payout about 7 to 14 days after your first successful charge while the account is verified.
• PayPal credits the sale to your PayPal balance right away; moving that balance to your bank is free on the standard 1 to 3 business day transfer.
• Square deposits to your linked bank by the next business day at no charge.

Paying to get it sooner is where the second fee lands, and it is a percentage of the money moved, not a flat charge:

• Stripe Instant Payouts cost 1.5% of the payout in the US, with a 0.50 dollar minimum, and land in minutes on an eligible debit card.
• PayPal Instant Transfer to a bank or debit card costs 1.75%, a minimum of 0.25 dollars and a cap of 25 dollars per transfer.
• Square Instant Transfer costs 1.95% per transfer, with a 25 dollar minimum balance to send.

The number to notice is the size of these fees against the processing rate. Cashing out 1,000 dollars instantly on Square costs 19.50 dollars, close to what you paid to process it in the first place; the same instant pull is 15 dollars on Stripe and capped at 25 dollars on PayPal. Used once for a genuine cash-flow crunch that is a fair price. Used as your default because next-day feels slow, it can quietly add a percent or two to your all-in cost of taking money, on top of everything above. The free schedule is the one to plan around; treat instant as the exception you reach for on purpose.

The risk the rate tables never show: your money getting held

Everything so far is a fee, a known slice off each sale. The bigger cash-flow risk is not a fee at all: it is the processor deciding to hold your money, and none of the three publishes it as a rate because it is applied to accounts, not to transactions. All three keep the right to delay or reserve funds when they judge an account risky, and for a small store a hold can hurt far more than any fraction of a percent on the headline rate.

The three do it in recognisable ways:

• PayPal is the one merchants meet first. A new selling account can have its payments held for up to 21 days while PayPal covers itself against complaints, released sooner once you add tracking and delivery is confirmed. Beyond that, a higher-risk account can be put on a reserve: a rolling reserve holds a percentage of each day of receipts and releases it on a schedule (for example 10 percent held for 90 days), or a minimum reserve keeps a fixed balance parked. PayPal reviews the account over time and eases the hold as you build a clean selling history.
• Stripe can apply the same rolling reserve to an account it reads as higher risk, holding a percentage of your card sales for a fixed window, commonly reported in the 5 to 15 percent range and often 90 to 180 days, released on a rolling basis as new sales replace old. The usual triggers are a chargeback rate above about 1 percent, a sudden spike in volume, a business in a category Stripe treats as high risk, or verification that is still incomplete.
• Square also reserves funds for the small share of sellers it deems higher risk (it has said around 0.3 percent of sellers), and can hold an individual payment for review when it looks unusual, such as a charge far larger than your usual ticket. Reserve percentages and release windows vary widely, and a chargeback rate creeping toward 1 percent is a common trigger here too.

The pattern is the same across all three: the hold is discretionary, risk-based and rarely negotiable in the moment, so it belongs in your planning even though it sits on no pricing page. The defences are the dull ones that also keep your fees down: verify the account fully up front, add shipping tracking so delivery is provable, keep chargebacks well under 1 percent, and warn the processor before a genuine volume spike rather than letting it look like fraud. Do not run a business on money you cannot afford to have parked for 90 days, and if steady cash flow is critical, keep a second processor live so one hold cannot stop everything.

The subscription line: one of the three charges extra to bill recurring

Everything above prices a single card charge. If your business is subscriptions, a membership, a SaaS seat, a retainer billed every month, there is one more line to check, because collecting recurring money is not always priced the same as collecting a one-off sale. Here the three split cleanly.

PayPal and Square do not add anything for the recurring part. Their subscription tools sit on top of the standard card rate, so a plan billed monthly costs the same 2.9% plus fixed fee to collect as any other sale, with no separate subscription percentage. Square Subscriptions carries no monthly fee, and PayPal bills recurring charges at its normal rate.

Stripe is the exception, and it is the one people miss. Its subscription product, Stripe Billing, adds 0.7% of the billing volume on top of the card fee. A 50 dollar plan run through Billing costs the usual 2.9% plus 30 cents to take the card, then about another 0.35 dollar for the Billing layer, so the all-in rate on recurring revenue is higher than the headline suggests. You only pay it if you use Stripe Billing to run the subscriptions; a recurring charge you build yourself on the raw Stripe API is just the card rate. Stripe Invoicing is a separate 0.4% per paid invoice. So Stripe can be the cheapest of the three to take a single card and still cost more than PayPal or Square once you turn on the tool that actually runs the subscription, which is exactly the kind of line the fee comparison hides. (Rates checked July 2026; they move and vary by account.)

The line the fee comparison hides: who owes the sales tax

Every rate above is just the cost of moving the money. It says nothing about the tax on the sale, and with a plain gateway that job is yours. Stripe, PayPal and Square process the card but leave you as the merchant of record, the legal seller, which means you are the one who has to work out where you owe US sales tax and then register, collect and remit it.

That used to matter only where you had an office. Since the Supreme Court decided South Dakota v. Wayfair in 2018, a state can require you to collect its sales tax on economic nexus alone, once your sales into that state pass a threshold, with no physical presence needed. The common threshold is around 100,000 dollars of sales into a state in a year, and some states also count 200 separate transactions, though many have since dropped the transaction test and the exact figures vary. There are 45 states plus the District of Columbia that levy a sales tax, each with its own rules on whether digital goods or SaaS are even taxable, so a store that grows across state lines can pick up filing duties in a dozen places without noticing.

This is where a merchant of record changes the math. Paddle and Lemon Squeezy do not just process the card, they become the legal seller of your product and handle the sales-tax registration, collection and filing (and VAT abroad) for you. The price is a higher blended fee, about 5 percent plus roughly 0.50 dollar per transaction against a gateway 2.9 percent plus 30 cents, so over half again as much per sale. Tools like Stripe Tax sit in between: they calculate what is owed but leave you to register and remit. Whether the premium is worth it comes down to spread. A seller of digital products or SaaS crossing nexus in many states often comes out ahead letting a merchant of record carry it, while a store with nexus in one or two states is usually cheaper on a gateway plus a tax tool or an accountant.

Stripe now sells the merchant-of-record option itself

That choice used to mean leaving Stripe for a separate platform, but as of a release dated 25 February 2026 it no longer does. Stripe added Managed Payments, its own merchant-of-record product, so Stripe can be the legal seller and take on indirect tax (sales tax, VAT and GST) in more than 80 countries, along with fraud, disputes and buyer support, without you moving to Paddle or Lemon Squeezy. It is priced at 3.5% per successful transaction charged on top of the normal card fee, not instead of it, so on a standard US card at 2.9% plus 30 cents the all-in cost is about 6.4% plus 30 cents, a shade above the roughly 5% Paddle and Lemon Squeezy blend into a single rate. The difference that matters is not the headline number but the shape: Managed Payments is switched on per transaction, so you keep plain Stripe pricing on domestic sales and flag only the cross-border digital orders that actually need someone else to carry the tax. For a store already on Stripe, that makes trying the merchant-of-record model a per-order toggle rather than a checkout rebuild, which is a real change to the gateway-versus-MoR decision this section describes.

So the honest ranking is not a single winner. Online with normal-sized orders, Stripe is the lowest standard rate. In person, Square is. On tiny orders, whoever has the smallest fixed fee wins regardless of the percentage. Set your own average order value, channel and rate in the calculator and it will show you the real per-sale cost rather than the number on the pricing page.