Shopify vs Square explained – Payment processing comparison

Updated on 14 July 2023

As we navigate the modern landscape of digital commerce, two key players are often at the forefront of discussion: Shopify vs Square. Both of these payment processing giants offer a range of tools and features to facilitate transactions for businesses of all sizes. However, when deciding which is the best fit for your enterprise, it’s crucial to delve into the specifics.

 
Quick, easy, no commitment!

This article will dissect the unique offerings of Shopify and Square, exploring their advantages, disadvantages, and ideal use cases.

Video: Choosing a card payment machine

Shopify vs Square

ShopifySquare
Payment ProcessingShopify Payments or 100+ external gatewaysDirect processing, no external gateways
POS CapabilitiesAvailable, with mobile and in-store solutionsExtensive, with hardware solutions
Ecommerce CapabilitiesExtensive, with robust online store optionsGood, but not as comprehensive as Shopify
Offline TransactionsLimited supportExtensive support, with offline mode
Security and Fraud ProtectionFraud analysis on all ordersEnd-to-end encryption and fraud detection
Inventory ManagementRobust, especially for ecommerceGood, but better for physical stores
Reporting and AnalyticsAdvanced, with sales and payment trendsDetailed, with source-specific sales data
Basic Pricing Structure£29 to £299 per monthPay-per-use model (No monthly fees)
Transaction FeesVaries by plan, lower with higher plans, extra fees with external gatewaysFlat rate per transaction: 1.75% for chip and PIN or contactless, 2.5% for online or keyed-in
Ideal Use CasePrimarily online sales with some POS needsPrimarily physical sales with some online needs
Shopify vs Square

Please note that these prices and fees are as of the time of writing. For the most accurate and up-to-date information, you should always check the official Shopify and Square websites.

Moorepay logo Cutting edge payroll software
  • Powerful and easy to use
  • HMRC & RTI compliant
  • Used by payroll pros
Pipedrive logo The CRM platform to grow your business
  • Great for entrepreneurs
  • Powerful data analytics
  • Manage sales and data
Wix logo Powerful web builder and advanced business tools
  • Great for startups
  • Powerful web page builder
  • E-commerce available
Planable logo Supercharged content planning
  • Great for marketing
  • Better than lists or sheets
  • Manage social media
Webador logo Create a new website in 10 minutes. Easy.
  • Launch your website fast
  • Powerful data intuitive
  • No coding skills needed

What are Shopify and Square?

Before we delve into the depths of comparison, it’s essential to understand what Shopify and Square are at a basic level.

Shopify is a comprehensive ecommerce platform that enables businesses to create an online store, manage inventory, fulfil orders, and process payments. While known primarily for its online capabilities, Shopify also provides point-of-sale (POS) solutions for in-person transactions.

Square, on the other hand, initially rose to fame through its POS solutions, particularly for small businesses and individual vendors. Square’s POS hardware and software make it easier to accept payments in physical locations. More recently, however, it has expanded to provide ecommerce capabilities, making it a formidable competitor to Shopify.

Payment processing features

Shopify

One of Shopify’s standout features is its built-in payment processor, Shopify Payments. This allows businesses to handle transactions directly within the platform without integrating third-party payment gateways. However, if a business prefers or requires a specific payment provider, Shopify also supports integration with over 100 different gateways, including PayPal, Stripe, and Amazon Pay.

Shopify also offers fraud analysis on all orders, providing an extra layer of security for your transactions. The platform’s robust reporting capabilities mean you can gain insights into your sales and payment trends over time.

Square

Square, conversely, acts as both a payment gateway and a merchant account. It accepts all major credit and debit cards and also allows for the processing of gift cards. The Square POS system is particularly renowned for its ability to take offline payments. If you lose connection during a transaction, Square will still allow you to complete the sale, synchronising the data once you’re back online.

Square also provides security through end-to-end encryption and fraud detection. Its detailed reports and analytics let you keep tabs on how your business is performing and where your sales are coming from.

Pricing structures

One of the most crucial considerations for any business is cost. Both Shopify and Square offer a range of pricing options, but their structures differ significantly.

Shopify’s pricing model is primarily subscription-based, with monthly plans ranging from £29 to £299. Each plan tier offers additional features, with the more expensive plans providing lower transaction fees. If you opt to use a third-party payment gateway rather than Shopify Payments, you will also be charged a transaction fee by Shopify, which decreases with the more expensive plans.

Square’s pricing structure is based on a pay-per-use model. There are no monthly fees; instead, you pay a flat rate per transaction. The cost varies depending on the type of transaction. For example, as of this writing, Square charges 1.75% for chip and PIN or contactless payments in the UK and 2.5% for online, keyed-in, or card-on-file payments.

Ideal use cases

While both platforms can accommodate a wide range of business types and sizes, their feature sets tend to make them more suitable for certain use cases.

Shopify is a strong choice if you’re primarily focused on online selling. Its ecommerce capabilities are robust, with excellent inventory management, shipping integrations, and marketing tools. Plus, its ability to integrate with a vast number of third-party apps can extend its functionality even further.

Square is particularly powerful for businesses that need a robust POS system for physical locations, such as shops, cafes, or market stalls. Its offline mode, combined with an array of hardware options (including card readers and terminal stands), makes it a reliable choice for businesses needing flexibility in accepting in-person payments. Its ecommerce offerings, while not as comprehensive as Shopify’s, are still solid for those looking to maintain a modest online presence alongside their physical one.

The verdict – Shopify vs Square

Choosing between Shopify vs Square will largely depend on your specific business needs and how you want to balance your online and offline sales. Shopify offers a more feature-rich ecommerce solution, while Square excels with in-person transactions.

Remember, it’s not just about the costs involved, but also the benefits and long-term scalability that these platforms can offer. Regardless of your choice, both platforms provide a wealth of tools to help streamline your transactions and make payment processing as seamless as possible.

FAQ

What is the main difference between Shopify and Square?

The main difference lies in their focus areas. Shopify primarily caters to online businesses, offering robust ecommerce capabilities, while Square is ideal for businesses with a strong physical presence due to its extensive POS offerings.

How does payment processing work with Shopify and Square?

Shopify has its own payment gateway, Shopify Payments, but also supports over 100 external payment gateways. Square, on the other hand, directly processes payments and does not need external gateways.

Can Shopify and Square be used for international transactions?

Yes, both Shopify and Square support international transactions, but the availability of services and the fees involved may vary by country.

Do both Shopify and Square offer fraud protection?

Yes, both platforms offer fraud protection. Shopify conducts fraud analysis on all orders, while Square provides end-to-end encryption and fraud detection.

How do the transaction fees of Shopify compare to Square?

Shopify’s transaction fees vary based on the chosen plan and whether you use Shopify Payments or an external gateway. Square charges a flat rate per transaction, with different rates for different types of transactions.

Can I use both Shopify and Square together for my business?

Yes, it is possible to use Shopify for your online store and Square for your physical POS, but this may complicate your business operations and reporting.

What kind of businesses are best suited for Shopify and Square?

Online businesses looking for robust ecommerce capabilities are better suited for Shopify, while businesses with a significant physical presence may find Square more useful due to its extensive POS system.

How easy is it to set up a store on Shopify compared to Square?

Both Shopify and Square offer intuitive setup processes. Shopify’s setup may involve more steps if you’re creating a comprehensive online store, while Square’s setup is often simpler, especially for physical POS.

Are there any hidden fees in Shopify and Square?

Both platforms are transparent about their costs, but it’s important to read the fine print regarding transaction fees, additional services, and hardware costs.

Can I handle offline transactions with Shopify and Square?

Yes, both platforms support offline transactions. However, Square has an edge with its offline mode, allowing transactions even without internet connectivity.

Do Shopify and Square provide customer support?

Yes, both Shopify and Square offer extensive customer support through various channels including phone, email, and live chat.

How does inventory management in Shopify compare to Square?

While both platforms provide inventory management, Shopify’s features are more robust and geared towards ecommerce. Square’s inventory management is solid, especially for physical stores.

What is the return policy for Shopify and Square?

The return policy for transactions processed through Shopify or Square is determined by the individual business, not the platforms themselves.

Can Shopify and Square integrate with other platforms?

Yes, Shopify can integrate with over 100 external gateways and other services, and Square also offers numerous integration options.

Which platform is more secure, Shopify or Square?

Both Shopify and Square take security seriously and have robust measures in place. Shopify offers fraud analysis and secure hosting, while Square provides end-to-end encryption and fraud detection.

Can I migrate my store from Shopify to Square, or vice versa?

Migrating your store from one platform to another is technically possible but can be complex. It involves transferring product data, customer information, and other business-specific details.

Can I manage multiple stores with Shopify and Square?

Yes, both Shopify and Square allow you to manage multiple stores or locations from a single account.

Do Shopify and Square offer mobile solutions?

Yes, both Shopify and Square offer mobile apps that allow you to manage your business on the go.

How are taxes handled in Shopify and Square?

Both platforms have built-in tools to help you set up, calculate, and manage taxes. However, it’s important to consult with a tax professional to ensure compliance with all relevant laws and regulations.

Can I offer gift cards through Shopify and Square?

Yes, both platforms allow you to sell and accept gift cards. The setup and management processes may vary between Shopify and Square.

Reviewed by , Managing Director

Compare ⓘ