Square and Stripe Now Offer Instant Payments

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For many entrepreneurs, startups are lean endeavors and require steady income. Racking up sales is the easy part, but how do you get paid quickly? There are a few options, depending on how you’ve structured your business.

For those who prefer a more out-of-the-box experience, Square is probably the way to go. A small- to medium-sized business can create an entire end-to-end experience on Square, managing everything from stock levels to payment processing.

Square also has physical card readers, and its newest hardware supports NFC payments so any business can accept Apple Pay or Android Pay. If you’re opening an online-only store, Square offers eCommerce solutions for websites.

If you’re curating an experience for customers and prefer not to have pre-fabricated solutions, Stripe is now a solid option with its new Instant Payouts program. Its easy-to-use APIs add payment processing to any app or website, and is relied on by developers everywhere. It’s even included as the default payment processing system in Twitter’s Fabric toolkit for developers.

If you’ve got a digital-only environment and an existing app, Stripe is a good choice. If you plan to take physical payments, it lacks hardware or a forward-facing experience for customers, making it a non-starter for many.

Getting paid is the name of the game, though—and each have similar approaches.

Square takes a svelte 1 percent of a balance for same-day payments, which can be requested manually (which also means you pay the fee each time you get funds) or set for automatic deposit at the end of your work day. Stripe is similarly structured, but takes 1.5 percent of your balance. Both require a minimum of $50 in transactions before transferring funds to your bank account.


Square or Stripe? Pick Your Poison

So far the choice is limited to Square’s all-in-one ease of use or Stripe’s behind-the-scenes, developer-focused integration—but there are significant differences between the two when it comes to the details.

Stripe allows you to withdraw up to $5,000 instantly, while Square limits you to $2,500 daily. If your business is doing better than that, Square doesn’t let you get all you’ve earned right away. It does have an enterprise solution that handles high-volume accounts, and the fees associated are custom-tooled to each customer.

Square’s processing fees are a touch lower; 2.75 percent, compared to 2.9 percent plus a 30-cent charge per instance for Stripe. For 50 transactions of $50 totaling $2,500, Square would be able to deposit $2406.94 instantly after taking the additional 1 percent cut. Stripe would move $2386.15 to your linked bank account, with a slightly higher cut and per-charge processing fee.

If you don’t need your cash straight away, Square waives the 1 percent fee for its Fast Deposit program, which takes up to two business days to hit your bank account.

Both will pay you instantly, but that $20 difference in what is actually deposited adds up quickly. Stripe feels more native for in-app payments, while Square’s eCommerce API forces an app to offload to a web browser for payment processing, which feels clumsy—but it’s not a deal-breaker.