Square vs shopify payments: which should I use? | Payment Gods Forum

Question

I'm a small business owner selling handmade jewelry online and at local craft fairs, and I'm completely overwhelmed trying to pick between Square and Shopify Payments. I currently use Square for in-person sales, but I'm building a new Shopify store and can't figure out if it makes sense to switch everything over to Shopify Payments or keep Square for both. What's the best option for me?

Answers

Payment Gods (Best Answer)

Hi SmallBizSue, that's a classic dilemma many small businesses face when expanding their online presence. You're right to explore your options carefully, especially as you’re already familiar with Square for your in-person craft fair sales. Let's break down Square vs Shopify Payments to help you make an informed decision for your handmade jewelry business. First, consider your primary sales channels. Since you’re building a Shopify store, using Shopify Payments offers a significant advantage: integrated payment processing. This means simpler reconciliation, unified reporting, and frequently, lower processing fees on transactions made through your Shopify store. If you use a third-party payment gateway like Square with a Shopify plan other than Basic Shopify or Shopify Starter, Shopify will charge an additional transaction fee ranging from 0.5% to 2% on top of your payment processor’s fees. This alone can make Shopify Payments a more cost-effective choice for your online sales. However, your existing familiarity and setup with Square for your craft fairs is also a huge factor. Square is known for its excellent point-of-sale (POS) hardware and ease of use for in-person transactions. If you switch entirely to Shopify Payments for everything, you would likely need to invest in Shopify's POS hardware or find a compatible solution for your craft fair sales, which could incur additional costs and a learning curve. Keeping Square for in-person sales and using Shopify Payments for online sales is a common hybrid approach that many merchants find effective, but it does mean managing two separate merchant accounts. When comparing Square vs Shopify Payments, always look closely at the credit card processing fees. Shopify Payments offers competitive rates, typically starting around 2.9% + $0.30 for online transactions and 2.7% for in-person transactions, which can decrease with higher-tier Shopify plans. Square’s rates are similar, often 2.6% + $0.10 for in-person contactless payments and 2.9% + $0.30 for online transactions. These rates are interchange-plus or flat-rate depending on the provider, so always look for transparency in their pricing structure. Also, think about potential chargeback fees – both platforms have procedures and fees associated with disputes. Ultimately, for your specific situation, SmallBizSue, if the majority of your sales will be online through your new Shopify store, leaning into Shopify Payments makes a lot of sense to avoid additional transaction fees from Shopify and streamline your online operations. For your in-person craft fair sales, you could certainly continue to use Square, creating a dual-provider system. This allows you to leverage the strengths of each platform without compromising on cost or convenience too much. I recommend calculating your expected transaction volume for both online and in-person sales and getting a free, no-obligation rate analysis from both Shopify Payments and Square based on those projections. This way, you’ll have a clear picture of your actual processing fees and can make an informed decision that will benefit your handmade jewelry business in the long run. Ensuring PCI compliance is also critical, and both providers will guide you through this, so don’t let that be a deciding factor between the two.