Square and Stripe get compared constantly and rarely head-to-head, because they don't actually compete for the same transaction most of the time. Square owns in-person. Stripe owns online infrastructure. The fee math only matters once you know which business you're actually running, and the two rate structures produce different winners depending on how a customer is paying.
The Fee Math, Directly
Square's card processing runs 2.6% + $0.10 per in-person swipe or tap, 2.9% + $0.30 online, and 3.5% + $0.15 for manually-keyed transactions. No monthly fee for the basic POS software; you pay per transaction and nothing when you don't sell.
Stripe charges 2.9% + $0.30 per successful US card charge, flat, whether the transaction happens through a checkout page, an API call, or an invoice. International cards add 1.5%, currency conversion adds another 1%, and ACH bank transfers run 0.8% capped at $5, which is the cheapest way to move money through Stripe if your customers can pay that way.
On a $100 sale: Square in-person costs $2.70, while Stripe or Square's own online rate costs $3.20, a gap that only widens as transaction volume grows. That $0.50 difference is 2.6% vs 2.9% plus a $0.20 gap in the fixed fee, and it only shows up for in-person transactions, because Square's online rate matches Stripe's exactly at 2.9% + $0.30. The entire "Square is cheaper" argument lives specifically in the in-person rate. Online, the two are identical to the penny.
Volume Changes the Math, But Not the Winner
At $10,000/month in in-person sales averaging $50/transaction (200 transactions): Square costs $280 (2.6% of $10,000 plus $0.10 × 200 = $260 + $20). Running the same volume through Stripe's in-person hardware (Stripe Terminal, which exists but is a smaller product than Square's dedicated POS lineup) at 2.7% + $0.05 in-person costs roughly $270 + $10 = $280, close enough that hardware and software fit matter more than the fee gap at this scale.
At $50,000/month online with a $75 average order (667 transactions): both Square Online and Stripe run 2.9% + $0.30, landing at $1,450 + $200 = $1,650 either way. There is no fee-based reason to prefer one over the other for pure online transaction cost; the decision has to come from features, developer experience, or existing infrastructure instead.
The volume threshold that actually changes the conversation is $250,000+/year in card volume. Past that point, negotiated interchange-plus processing or Stripe's custom enterprise pricing (available past roughly $500K/month) both beat the standard published rates, and the decision becomes a negotiation rather than a rate-sheet comparison.
What You're Actually Buying Beyond the Rate
Square is a complete point-of-sale business: a free magstripe reader to start, Square Terminal at $299 for a full countertop setup with a built-in printer, Square Register at $799 for a dual-screen setup at higher-volume locations. Beyond hardware, Square bundles invoicing, inventory tracking, team scheduling, loyalty programs, and a free-tier online store through Square Online. Vertical add-ons (Square for Restaurants, Square for Retail, Square Appointments) run $60-165/month per location for businesses needing more than the generic toolset. Payroll is a separate $35/month plus $5/employee.
Stripe is not a business-in-a-box; it's payments infrastructure for developers to build on. The API is genuinely best-in-class: extensive documentation, support for 135+ currencies, and a development-to-production workflow that's smooth enough to be the default choice cited across developer communities. Beyond raw payment processing, Stripe's product suite covers Billing for subscriptions, Connect for marketplace payouts, Issuing for card issuance, Treasury for banking-as-a-service, and Tax. Stripe Radar handles fraud detection at no additional cost on top of the base rate.
These are not competing feature sets. Square gives a retail or food business register hardware, inventory, and scheduling without writing a line of code. Stripe gives a software team the primitives to build a custom payment flow, a marketplace, or a subscription product. Comparing them on capability is comparing a cash register to a construction kit.
The Complaints That Actually Matter
Both platforms share the same structural weakness: payment processors hold real power over your cash flow, and both have earned real criticism for it. r/smallbusiness threads on Square consistently flag fund holds of 30 or more days on flagged transactions with minimal explanation, a real cash flow risk for businesses running thin margins. r/webdev threads on Stripe report a similar pattern: account holds and freezes with little warning, an opaque dispute resolution process, and customer support that's described as poor relative to the revenue Stripe generates from each account. Neither company differentiates meaningfully here. Budget for the possibility of a hold with either platform, and don't run a business where a 30-day fund freeze would be an existential event.
The Case for Running Both
Plenty of hybrid businesses end up running Square for the physical register and Stripe for the website, rather than picking one processor for everything. A restaurant with a countertop POS and an online ordering system, a retail shop with a storefront and a Shopify store, or a service business taking in-person deposits and online invoices are all reasonable candidates for splitting the two. The cost of running both is minimal since neither charges a mandatory monthly platform fee at the base tier, so the "penalty" for using two processors is mostly reconciliation overhead: two dashboards, two payout schedules, and two sets of transaction records to match against your books at month-end.
That reconciliation cost is real but manageable with basic bookkeeping discipline or accounting software that ingests both feeds. For a business where the in-person side and the online side are genuinely separate operations (a food truck's counter sales versus a separate catering website, for instance), running the processor built for each channel usually beats forcing one platform to do both jobs adequately. Where it stops making sense is a business with heavy volume on both sides needing a single, unified view of revenue and inventory in real time. At that point, the reconciliation tax outweighs the per-transaction savings, and a single platform (Square's own online store, or building a custom Stripe-powered storefront) becomes the better call despite giving up a small amount of channel-specific optimization.
Who Should Use Which
Run a retail shop, food truck, or service business taking payments in person: Square. The 2.6% + $0.10 in-person rate, free basic hardware tier, and bundled inventory/scheduling tools solve the whole operational problem, not just payments.
Build software that needs to accept payments, run subscriptions, or operate a marketplace: Stripe. The API and developer tooling are the actual product; there's no equivalent reason to choose Square for a codebase-first payment integration.
Run a hybrid business with meaningful volume both in-person and online: the rates converge online, so the deciding factor is whether you want Square's integrated retail toolset or Stripe's infrastructure flexibility, not the processing fee. For an e-commerce-first business specifically, the Square vs Stripe vs Shopify Payments comparison covers where Shopify's own processor fits into that decision, and the best e-commerce platforms roundup covers the platform layer these payment processors plug into.
The rate sheet rarely decides this comparison, because the two platforms rarely compete for the same transaction. Pick based on whether you're running a storefront or building software, and the fee math mostly takes care of itself.