PayPal and Square

In the world of financial technology, it is no doubt that PayPal and Square stock are two of the leading competitors. They both play huge roles in helping business owners and customers carry out transactions online in the easiest way possible. In fact, most analysts in the FinTech industry will agree that both PayPal and Square possess a wide range of financial products that have helped fill the gaping spaces left open by traditional financial institutions and that their buying rates make them a solid investment for at least the next 10 years.

However, there have been arguments as to which stock is better PayPal and Square stock, with some choosing to pick the former over the latter and vice versa. These arguments have led us to put together some guides on the two companies that might help you make the right decision when you next are faced with the dilemma of picking one of the two.


PayPal and Square Stock

Paypal is a FinTech company in the United States(even though it operates in other parts of the world) that provides a platform for people to send money, receive money, and make payments online in different currencies and in different parts of the world.

Square, on the other hand, is a FinTech platform that provides financial services to its users. It is renowned for serving as a platform where businesses can accept payments from customers with credit cards.


PayPal and Square: How They Size Up

Paypal, as we know, has built a reputation in the world of finance and business as a reliable company when it comes to making payments online or with a mobile phone, and it is no news that it makes a profit off the fees paid by users during transactions. Also, of the top 1,500 online retailers in Europe and North America, 76% of them use Paypal for their transactions. This, coupled with the fact that the company now allows users to buy and pay later at checkouts and also supports P2P money transfers through Venmo, makes PayPal one of the best FinTech companies in the world.

Square, on the other hand, with over 30 products and services, has helped businesses to receive payments for products and services in person. In terms of revenue, Square relies majorly on its position as a middleman in the transactions of Bitcoin by its users on its Cash App platform.


PayPal vs. Square Stock: Point of Sale Comparison

As you already know, PayPal thrives in online payments while Square has the upper hand when it comes to payments in person. But how well do these two FinTech giants line up in terms of POS systems?


  • Software Integrations:- while PayPal makes use of software like Sales Vu, Big Commerce, Woo Commerce, and Quickbooks, Square, the other hand, makes use of software like JotForm, SKU IQ, Wix, Acquity Scheduling, and Linktree, among others.


  • Transaction Fees:- PayPal does not charge its users any monthly transaction fees, although it requires them to pay 3.49%(+ 9 cents) for each manual card transaction and 2.29%(+ 9 cents) for each card present transaction. On the other hand, Square does not charge monthly transaction fees but only charges 2.6% (+ 10 cents) per transaction.


  • Card Readers:- while PayPal charges users $29 for the first card reader and $79 for additional devices, Square does not charge for the first card reader and only charges $10 for additional card readers.


  • Terminal Cost:- PayPal charges for terminals starts at $249, while Square starts at $299.


PayPal Vs Square Stock: Valuation

If you are an investor interested in buying the stocks of either company, you might want to read this.


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Regarding value, Square is more expensive than PayPal, with a trading P/E multiple of 382x, which is way higher than PayPal‘s P/E of 30x. Although PayPal has an earnings growth estimate of 38%, which is more than Square’s 15%, and a revenue growth estimate of 35%, which is more than Square’s 15%, the latter is expected to grow in earnings at a rate 2.5 times higher than that of the former.


So, when deciding between PayPal and Square based on their values, keep in mind that PayPal has a better chance of being a successful investment because it offers investors the possibility of growth and value.


PayPal vs. Square: Dangers

One of the dangers investors should have in mind before buying stock from Square is the fact that it is faced with heavy competition, notably from companies like PayPal, Intuit, Clover, and Shopify, among others.


Also, in terms of the products they offer, Square seems to be smaller when compared to PayPal. This is why investing in its stock is considered risky for investors.


Although not much can be said about the risks involved in investing in PayPal, some companies are already creating their own payment services, and as such, they are taking their users off of PayPal. This is a warning sign for those looking to invest in its stocks.


Also, on some platforms where PayPal is being used to facilitate transactions, there are also other options(PayPal alternatives) provided for users to use. Hence, the competition, which poses potential risks to PayPal.


No doubt, both PayPal and Square have been flying high ever since the bounce back from the coronavirus pandemic in 2020, but there is no guarantee that investors will make a profit off their stocks. This is why it is advisable to always look at both the advantages and disadvantages that come with investing in either of the platforms.




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