There are few tools more important to the small business owner than their payment processing tool. On one hand, you’ll want your processor to be able to accept as many different payment types as possible. If its difficult for your customers to pay you, they may just decide to skip the hassle and take their business elsewhere. And, on the other hand, you’ll want to find a payment processor that charges reasonable fees and transfers your money to your bank on a timely basis.
When it comes to payment processing tools, Square and QuickBooks Payments are two of the strongest options on the market today. Payment processing space is really Square’s core identity as a company, while QuickBooks is primarily known for their accounting software. But, as we’ll see, QuickBooks can more than hold their own with Square in this space. And if you already use QuickBooks as your accounting tool, they could actually end up being your best option.
Let’s take a closer look at Square vs. QuickBooks Payments to see how they compare.
Square vs. QuickBooks Payments Compared
Below, we examine Square vs. QuickBooks Payments across six different factors: payment types, POS equipment, e-Commerce integration, transaction fees, monthly fees, and bank transfers. Here’s what you need to know.
Payment Types
When it comes to credit and debit card payments, Square and QuickBooks Payments are basically identical in what they have to offer. Both can accept card payments in person as well as online or even over the phone. Both offer invoicing and recurring payments as well.
But the big difference that should be noted is that while Square can also accept cash payments, QuickBooks can’t. If you run an online store or are just looking to accept invoice payments from clients, this will be a non-issue.
But if your business has a physical storefront and you need to accept in-person payments, this will be a big deal. Unless you’re OK with telling your customers that you don’t accept cash, Square is the clear winner for brick-and-mortar retailers.
Related: How to Accept Credit Card Payments: The Ultimate Guide
POS Equipment
Speaking of in-person payments, in order to accept them, you’ll also need Point of Sale (POS) software and equipment. Both have a strong POS app. Square’s main app IS its POS app. But, with QuickBooks, you’ll need to download a separate app called GoPayment. Here is the POS equipment that each company offers.
QuickBooks:
- One free chip and magstripe reader
- Extra chip and magstripe readers: $19
- Chip and contactless reader: $49
Square:
- One free magstripe reader
- Chip and contactless chip – $49
- Stand for iPad and chip reader – $199
- Square Terminal – $299
- Square Register – $799
QuickBooks is the winner when it comes to the free readers, because only theirs can accept chip payments. But Square shines on the other end of the spectrum. Their Square Terminal and Registers can handle the checkout needs of virtually any storefront retailer.
eCommerce Integration
QuickBooks says that they have “optimized” integration with two eCommerce platforms: BigCommerce and Shopify. But they say that QuickBooks Payments is also compatible with UltraCart and WooCommerce. Thankfully, those are four of the biggest names in the eCommerce space. But that’s still only four names.
Square on the other hand offers a lot of flexibility. First, they have their own eCommerce builder which is completely FREE to use (including hosting). You only pay Square when you makes sales and that’s it. But Square also integrates with a ton of third party e-Commerce builders, including:
- Wix
- WooCommerce
- BigCommerce
- GoCentral Online Store
- Ecwid
- 3dcart
- OpenCart
- Magento
- Miva
- X-Cart
- Drupal Commerce
- Zen Cart
Square is the clear winner simply due to having so many more options. But if you already happen to use one of QuickBooks Payments’ four eCommerce partners, you shouldn’t have any problems accepting payments on your online store.
Transaction Fees
OK, so this is the biggie. For both Square and QuickBooks Payments, the majority (if not all) of the money you pay them each month will be from your card transaction fees. So let’s a close look at both company’s fee structure.
QuickBooks Payments
- Card Swiped: 2.4% + 25¢
- Card Not Present: 2.9% + 25¢
- Card Keyed: 3.4% + 25¢
QuickBooks Payments for Online Stores:
- Pay as you go: $0 / month
- Card Swiped: 2.4% + 30¢
- Card Keyed: 3.5% + 30¢
- Pay monthly: $20 / month
- Card Swiped: 1.6% + 30¢
- Card Keyed 3.3% + 30¢
Square Point of Sale
- Card Swiped: 2.6% + 10¢
- Card Not Present: 2.9% + 30¢
- Card Keyed: 3.5% + 15¢
Square Retail, Restaurants, and Appointments
- Square Retail: 2.5% + 10¢ (for all transactions)
- Square Restaurants: 2.6% + 10¢ (for all transactions)
- Square Appointments:
- Individual: 2.6% + 10¢ (for all transactions)
- Two employers or more: 2.5% + 10¢ (for all transactions)
Comparing Square vs. QuickBooks Payments Fees
Let’s compare each company’s core plans (the ones that charge no additional monthly fees): Square Point of Sale and QuickBooks Payments. Both charge the same percentage for card-not-present transactions (2.9%). QuickBooks charges a lower percentage fee on card swiped and card keyed transactions. However, Square charges a lower cents-per-order feeacross the board.
What this means is that with smaller transactions, Square will be more affordable, but QuickBooks will come out ahead on big purchases. To illustrate, imagine that you own a coffee shop and someone swipes their card to buy a coffee for $2.50. With QuickBooks, that transaction would cost you 31 cents. Here’s how the math would work out:
$2.50 x 2.4% = 6¢
6¢ + 25¢ = 31¢
But with Square that same transaction would only cost you about 17 cents. Once again, here’s the math.
$2.50 x 2.6% = 6.5¢
6.5¢ + 10 cents = 16.5¢
That makes QuickBooks almost twice as expensive for transactions of that size. However, let’s now imagine that you own a sports and outdoors shop and someone buys a $500 kayak (again card swiped). Here’s how much you’d pay with QuickBooks:
$500 x 2.4% = $12
$12 + 25 cents = $12.25
And this is how much you’d pay with Square.
$500 x 2.6% = $13
$13 + 10 cents = $13.10
So, in this scenario, QuickBooks comes out ahead by about 85 cents. For these reasons, Square will be the more affordable choice if you mostly sell inexpensive items. But if you generate a lot of large transactions per month, QuickBooks Payments will save you money.
Monthly Fees
While there is no fee for QuickBooks payments, you’ll need to be a QuickBooks subscriber to use the service. QuickBooks Online plans range from $25 to $150 per month. The Square Point of Sale plan has no monthly service fee. But their Retail and Restaurant plans cost $60 per month.
It’s important to point out, however, that Square’s paid plans offer a lot more functionality. With Retail and Restaurant you can create and print barcode labels, accept exchanges which automatically adjust your stock, send email purchase orders to vendors, and get access to advanced inventory management reports. Square Point of Sale clients don’t get access to any of those tools and functions.
Square has one final paid plan called Square Appointments. If you have a consulting or coaching business, this could be a great option. Square Appointments is free for individuals, but costs $50 for two to five employees and $90 for six to ten employees.
Bank Transfers
QuickBooks accepts ACH transfers and they say that their customers will soon be able to spend money immediately after it hits their QuickBooks Cash account. But they do charge 1% for ACH transfers.
With Square, on the other hand, ACH transfers are always free. And it only takes one to two business for your funds to arrive. You can also take advantage of instant transfers, but you’ll pay a 1.5% transfer fee. Finally, you can get real-time access to your Square balance by signing up for the free Square Mastercard®.
There’s no doubt that Square is the winner here. They charge no fees for ACH transfers unless you want your money instantly. And the fact that you can access your funds instantly for FREE by using the Square card is a huge bonus.
Sync with Square and Quickbooks Online
QuickBooks has partnered with Square to build the Sync with Square app that’s available on the QuickBooks app store.
Advantages of Using Sync With Square
The best part about Sync with Square is that it keeps you from having to manually enter your Square transactions into QuickBooks. Sales, fees, taxes, tips and discounts can all be imported overnight into your QuickBooks account. You an also build custom reports that show you all your Square fees.
Sync with Square makes it easy to track your Square transactions when you’re on the go. You can create invoices, take snapshots of receipts, and see company activity right from inside the QuickBooks mobile app.
Other benefits include the ability to set up recurring payments, connect your bank and credit card accounts to track all your expenses, and one-click reporting to instantly get your hands on the data that you need to monitor your company’s financial health.
Disadvantages of Using Sync With Square
Unfortunately, Sync with Square also has its fair share of limitations. Most notably, it currently doesn’t support multiple locations. Sync with Square can only connect to only one location at a time, which could be a deal-breaker if you have multiple stores. You also won’t be able to import your customer details with Sync with Square. Information like your vendors’ names and email addresses will all not need to be inputted manually into your QuickBooks account.
Finally, Sync with Square can’t yet provide transaction summaries. Imagine that you had 50 transactions one day for $2,000 in sales. It would be nice to be able to log in the next morning to QuickBooks and just see a $2,000 Square transaction. But, instead, every Square transaction is imported into QuickBooks daily, one-by-one. So, if your business has a lot of daily transactions, this could create a lot categorizing work inside your QuickBooks dashboard each day.
The Bottom Line
If you already use QuickBooks as your accounting tool and you send invoices to the majority of your clients, QuickBooks Payments should easily meet all of your needs. However, if you own a restaurant, retail store, or any other business that has a lot of in-person transactions, Square offers a lot more flexibility.
Thankfully, if you do decide to go with Square, the Sync with Square app makes its easy to import and reconcile all your transactions inside QuickBooks.
Related: 12 Common Bookkeeping Mistakes and How to Fix Them
