Square is often touted as the standard for small business mPOS systems—and for good reason. Square offers a ton of goodies on top of its basic payment processing, it’s easy enough to get set up that even Curious George could manage it, and it’s relatively cheap.
That said, it’s never going to be the answer every business needs. Today, we’ll take a look at some alternatives to Square for small businesses with different needs. These companies all offer something unique, which might make them a better fit for your daily needs.
First, we’ll take a look at what Square offers, then we’ll dive into the alternatives with an eye to what each one offers beyond the basics.
Square: The alternative to Square alternatives
Square’s biggest selling feature is arguably its low-cost setup. Square’s payment processing features are all based on transactions, not some fixed monthly schedule. That means small businesses can dip their toes in without incurring lots of unavoidable fees.
The system also offers some bonus features that do require monthly fees, e.g., employee management, payroll, a loyalty program, and a few more, but those are outside of the payment features.
Back in the payment realm, the feature set is rich. If you want to turn off signatures under $25 or manage discounts or edit tipping defaults or create new items or run shift reports or print receipts or just about any other little thing, Square can make it happen.
All you have to do is sign up for an account to get a card reader, and away you go.
The limitations or downsides of Square fall into two categories. Feature limitations and support limitations.
On the feature side, the biggest limitation to Square is that you have to use it for both swiping the cards and processing the payments. None of the alternatives listed here overcome that limitation, though. For free, Square is probably the best feature set you’re going to find.
There are other systems out there that separate processing and merchant services (the bit that actually makes the money move around) but they’re not as plug-and-play as the options provided here.
So you’re stuck with Square’s rates if you use Square’s technology. Right now (May 2017), Square’s basic fees are 2.75% for swiped transactions and 3.5% + $0.15 for keyed transactions.
On the support side, one of the most difficult parts for Square users is reportedly its intense risk management department. Since anyone can easily open an account, Square ends up taking on a lot of risk. To offset this, it has a strong—and final-word-owning—risk management team that seeks out and shuts down high-risk and fraudulent operations. Merchant Maverick has a nice rundown of the problems this can create for small businesses.
In short, Square is great, overall, but that doesn’t mean it’s for everyone. Let’s jump into the alternatives, presented here in alphabetical order.
You may have heard of PayPal before. In 2015, PayPal processed $41 billion in payments between individuals. As it turns out, PayPal also has a payment processing solution for small businesses.
PayPal Here works like Square, in that it both physically and digitally processes transactions. You swipe with the little triangle swiper attachment, and then the payment is actually processed using PayPal’s technology.
If you want to process chipped cards, you’ll need to get a separate reader that runs $79. That’s more than Square’s $29 chip-enabled reader, but probably not a bank breaker.
PayPal Here’s pricing is closely aligned with Square’s, at 2.7% per swipe or 3.5% + $0.15 for keyed sales. That’s to say, this is not a decision you’ll be making on transaction price.
PayPal is making a hard push to be the omnichannel retailer of your small business’s future. Due to the tight integration with other PayPal properties, using PayPal Here can save you a ton of work and headache if you’re already using the company’s other services.
For instance, with PayPal Here, you can get payments deposited instantly into your PayPal account. That can be a big deal for businesses that have quick inventory turnover and need cash on hand to restock supplies. Square offers instant deposit, but it charges 1% of the deposit amount for the service.
PayPal’s integration can make small omnichannel retail a real possibility. You can use a single payment processor for online, in-store, and mobile payments. All that data flows to one place, giving you more insight into your business.
- Multichannel retailers
- Businesses already in love with PayPal
QuickBooks Payments offers a two plan system, letting businesses choose the one that fits their needs.
In the first plan there is no monthly fee; you pay per transaction: 2.4% + $0.25 for swipe and 3.4% + $0.25 for keyed. In practice, this means that Square is less expensive than QuickBooks for transactions under $70 and more expensive for those over $70.
The second option charges a $20 per month flat fee with lower transaction fees of 1.6% + $0.25 for swipe and 3.2% + $0.25 for keyed. The more transaction volume you have, and the higher your average transaction value, the more this saves you. At 100 transactions per month, you’d need your average transaction to be over $25 for this to be cheaper than the free option.
QuickBooks is betting on two underserved business communities: those that process a lot of larger transactions and those that need a dedicated merchant services account.
Due to its pricing model, QuickBooks is perfect for businesses that would otherwise get hammered by Square fees. Maybe you sell antiques, for instance, and you’re bringing in 500 transactions a month, averaging $100 per transaction.
With Square, that would end up costing you $1,375, or 2.75% of the total. With QuickBooks’ monthly paid plan, you’d only be out $965 in transaction fees, or 1.93% of your total.
The second part of this is the dedicated merchant account. With Square, PayPal, and Spark Pay, you’re part of an aggregated set of sellers. Being one of many means, on one hand, you have fewer hoops to jump through, as the risk is aggregated for the provider, but on the other, you could end up getting your account cancelled or frozen if you throw of the risk portfolio.
Dedicated merchant accounts require more vetting upfront, but then the provider knows who you are and what your payments are going to look like with more clarity.
- Businesses that love, love, love QuickBooks
- Those that need more control over their funds
- Businesses with higher average payment values
Spark Pay is Capital One’s small business payment option. Spark Pay also offers two different payment plans. The free plan costs 2.65% +$0.05 per swiped transaction or 3.7% +$0.05 per keyed transaction. The $19 per month plan runs 1.99% + $0.05 per transaction or 2.8% +$0.05 per keyed transaction.
The percentage is higher than QuickBooks, but the fixed transaction fee is lower. That ends up meaning your business pays less at the lower end of the scale and more as the average transaction value increases. Free Spark Pay is cheaper than free QuickBooks, until you hit $80 average values.
Meanwhile, Square is cheaper than free Spark Pay until you hit an average $50 transaction, and then Spark Pay is slightly more expensive.
A warning: Spark Pay, for reasons unclear to anyone, does not have a mobile chip-and-pin solution. You can get a reader for your in-store POS, but the mobile tech doesn’t seem to exist.
Spark Pay’s proposition
Spark Pay is part of Capital One’s small business offering. Of all the options here, it’s the one that looks most like it’s part of a “real” bank because it is part of one.
If you want a one-stop shop for your small business, Spark Pay might be the right option for you. You’ll have a tighter connection between the rest of your finances and your revenue capture, which can be a big deal when you start thinking about small business loans. Of course, that assumes you like everything else Capital One has to offer.
Capital One is making a play for traditional banks in mobile payment and the small business payment space, in general. It’s nice to have a whole business solution to look to, and businesses with a diverse set of needs might want to consider the value of having all those needs met in one place.
- Retailers in the pricing sweet spot Spark Pay hits
- Companies that want a one-stop banking shop
Choosing the right payment processor
Figuring out which payment processor is right for you might take some time. Luckily, none of these companies have long term commitment requirements or debilitating cancellation policies. If you use Square for a while and hate it, you can switch to another option.
If you’re looking for a full list of point of sale software providers, check out Capterra’s directory. You can filter down the results to help narrow your search and find the perfect solution for your small business.
Looking for Retail Management Systems software? Check out Capterra's list of the best Retail Management Systems software solutions.