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You could say Shopify is the go-to online store platform for retailers, while Square is the jack-of-all-trades platform for small businesses with an emphasis on payments. It’s not so simple, though.

Shopify always focused on ecommerce, but has developed its own point of sale (POS) system. In contrast, Square started with the world’s first mobile credit card reader with app, then added more payment tools including ecommerce.

Both giants in their own right, which platform should you choose? Depending on what you need the most, the answer could be easy, but you should know the key differences to make an informed decision.

Square Shopify
Primary product Payment tools, card readers and POS systems Online store platform
Best for Any small business that wants the widest range of tools on the same platform Any size retailer that needs an expandable, but user-friendly, online store
Card machines App-based or standalone App-based
POS systems General, Retail, Hospitality, Services Retail
Online store builder Yes Yes
Payment systems Square Payments (built in) Shopify Payments (built in), external payment gateways
Remote payments Payment links, e-invoices, virtual terminal, ordering for pickup/delivery, QR codes, recurring payments Online checkout, e-invoices, virtual terminal
Payouts 0-2 business days in bank account or immediately on Square Card Up to 5 business days with Shopify Payments, varies for other payment gateways
Pricing Free or monthly subscriptions, pay-as-you-go transaction fees Paid subscriptions, pay-as-you-go transaction fees
Square Shopify
Primary product Payment tools, card readers and POS systems Online store platform
Best for Any small business that wants the widest range of tools on the same platform Any size retailer that needs an expandable, but user-friendly, online store
Card machines App-based or standalone App-based
POS systems General, Retail, Hospitality, Services Retail
Online store builder Yes Yes
Payment systems Square Payments (built in) Shopify Payments (built in), external payment gateways
Remote payments Payment links, e-invoices, virtual terminal, ordering for pickup/delivery, QR codes, recurring payments Online checkout, e-invoices, virtual terminal
Payouts 0-2 business days in bank account or immediately on Square Card Up to 5 business days with Shopify Payments, varies for other payment gateways
Pricing Free or monthly subscriptions, pay-as-you-go transaction fees Paid subscriptions, pay-as-you-go transaction fees

Pricing

Some similarities exist between Shopify and Square pricing, but Shopify is for many reasons more expensive. Let’s start with the differences in subscription costs.

Ecommerce and POS subscriptions

Since Shopify is primarily an online store platform, you must subscribe to a paid ecommerce plan. The subscriptions are cheaper the more you pay upfront, e.g. subscriptions can be paid annually, every other year or every three years upfront, which works out cheaper on a monthly basis. Despite not having contract lock-in, you cannot get a refund for subscriptions. This means even an annual plan is still a big commitment unless you’re confident with Shopify for the long term.

The cheapest subscription is Shopify Lite ($9/month on a monthly plan), but this only includes Buy Buttons, invoicing and access to the free Shopify POS app. Online store plans start at $29/month on a monthly plan (Basic Shopify) with a general set of online store features. The medium plan, just called Shopify, is $79 per month whereas Advanced Shopify is $299 per month (monthly plans).

The Shopify POS app can be used on all these plans for free – but only the Shopify POS Lite features. The full range of Shopify POS features costs $89 per month per location in addition to the ecommerce subscription.

Square Shopify
Lock-in None None
Ecommerce plans $0-$79/mo $9-$299/mo
POS software $0-$90/mo $0-$89/mo + mandatory ecommerce subscription
Online transactions 2.9% + 30¢ Shopify Payments: 2.4%-2.9% + 30¢
External gateway: 0.5%-2% fee to Shopify + fees to card processor
Keyed transactions 3.5% + 15¢ 2.4%-2.9% + 30¢
Card reader payments 2.6% + 10¢ 2.4%-2.7%
Payouts Free in 1-2 business days, 1.5% w/Instant Transfers Free with Shopify Payments
Refunds Free Shopify keeps original transaction fees
Chargebacks Free $15 (refunded if resolved in your favor)
Currency conversion Free 1.5%
Trial
Square Shopify
Lock-in None None
Ecommerce plans $0-$79/mo $9-$299/mo
POS software $0-$90/mo $0-$89/mo + mandatory ecommerce subscription
Online transactions 2.9% + 30¢ Shopify Payments: 2.4%-2.9% + 30¢
External gateway: 0.5%-2% fee to Shopify + fees to card processor
Keyed transactions 3.5% + 15¢ 2.4%-2.9% + 30¢
Card reader payments 2.6% + 10¢ 2.4%-2.7%
Payouts Free in 1-2 business days, 1.5% w/Instant Transfers Free with Shopify Payments
Refunds Free Shopify keeps original transaction fees
Chargebacks Free $15 (refunded if resolved in your favor)
Currency conversion Free 1.5%
Trial

With Square, there is no requirement to subscribe to ecommerce to use a POS system, or vice versa. In fact, most Square software is available as a free service, with options to upgrade to a paid plan for more features.

Square has a lot of products with different costs, though, but we’ll keep it simple by focusing on the commerce and point of sale systems.

Square Online is the online store builder. Apart from the free plan with basic online store features, there’s a Professional subscription for $16 monthly, Performance for $29 monthly and Premium for $79 per month (monthly plans). On an annual plan, you pay for a year upfront which works out a bit cheaper per month.

Square has a selection of POS apps for the different industries: Square for Retail (free or $60 monthly plan per location), Square for Restaurants (free or $60 monthly plan per location) or Square Appointments (free for one employee, paid plans for more users).

Canceling a subscription

To cancel a Shopify subscription, you have to contact support in advance of the auto-renewal of your subscription(s). The support team will then do this for you, after which your online store will be inaccessible.

This is in contrast to Square who allows you to cancel any subscription, any time, in your account without having to contact support. All the many free features and saved changes will still be accessible in the Square account thereafter.

Transaction fees

Then we have transaction fees that in some ways are similar, but high-volume merchants will see some clear differences.

Online transactions through a Square website, payment links or email invoice cost a fixed 2.9% + 30¢ per transaction. Only on Square Online Premium does the transaction fee reduce to 2.6% + 30¢.

If you use Shopify Payments (built into the platform), transactions cost 2.9% + 30¢ on Basic Shopify (same as Square’s default rate), 2.6% + 30¢ on Shopify or 2.4% + 30¢ on Advanced Shopify. This applies to email invoices and virtual terminal payments as well.

Only Shopify allows you to use another online payment gateway, but at an additional cost: 2% on Basic Shopify, 1% on Shopify or 0.5% on Advanced Shopify. This fee is added to your external card processing costs for every transaction. We call it a penalty fee for using a different payment system, but Shopify calls it a “transaction fee”.

Shopify review

Keyed transactions refer to payments manually entered by the merchant. This includes the virtual terminal (included with Square and Shopify), card on file transactions (only possible with Square) and keyed-in payments through a POS app (only possible with Square). For Square, this costs 3.5% + 15¢ per transaction whereas Shopify uses the same rates as above.

Card reader payments are a fixed 2.6% + 10¢ through Square, whereas Shopify charges tiered rates: 2.7% on Basic Shopify, 2.5% on Shopify or 2.4% on Advanced Shopify.

Shopify also adds a 1.5% currency conversion rate on all transactions paid with a foreign-currency card, which could make a big difference to cross-border retailers. Square has no such fee.

Refund costs

Overall, the discounted rates on the higher Shopify plans do not make a big difference for businesses transacting only a few thousand dollars a month. But the rates between Square and Shopify make a clear difference when it comes to refunds: Square charges nothing for refunds, whereas Shopify charges the original transaction fees (both the percentage and fixed fee) for every refund processed.

Given the fact that 20% or so online purchases end up being refunded, this could make a big difference to your margins, particularly when transaction values are high.

Other fees

On top of this, Shopify charges $15 per chargeback, which is refunded if you successfully resolve the customer dispute. Square does not have a chargeback fee.

Finally, Square has plenty of other features that may incur monthly costs or pay-as-you-go fees (if they’re not free). For example, advanced employee permissions for the point of sale have a monthly fee of $35/month per location, though basic permissions are free of charge. There are too many add-ons to list here, but that’s a great thing about Square. Shopify also offers many additional apps at a cost, but they are typically developed by other software companies with their own fees.

Square Register review UK

Payouts and access to funds

With Shopify Payments, you have to wait up to a week to receive funds from online sales into your bank account. With Square, transactions are typically settled in your bank account the next business day – this is the default payout method free of charge.

Long-term Square users can activate Instant Transfers at a cost of 1.5% on top of the usual transaction fees for every immediate payout into your bank account. Alternatively, transactions can immediately settle into an online Square account linked to a Square Card (Business Mastercard). This doesn’t cost anything and could actually work as a stand-in business account separate from personal funds.

Shopify has no fast access to funds. The only way to arrange a faster cashflow is to use a different online payment gateway or add PayPal to the checkout.

Online store builder: basic versus mature

If you only looked at the differences between the website builders, Shopify would win hands down. It is simply the most advanced online store builder with lots of functions to grow any retailer with either Shopify’s own features or the 6000+ apps you can add. At the same time, it’s user-friendly enough for a lay person to set up a shop, while also allowing developers and web designers to implement their own code.

With Square Online, you also get an online store builder, but only a few templates (one for retailers, another for food and drink) with basic customization options designed to make it easy to create a site with no prior experience in web design. You can add integrations for e.g. accounting and inventory, but it’s limited which of these apps are directly adding value to the online store itself.

Shopify template example

Example of a Shopify template for $180 USD.

All of Shopify’s website plans require a subscription, but then you get enough features to start a professional web store even on Basic Shopify. A Shopify website is equipped to handle many products linked to different stock locations (if needed). Although some themes are free, the best cost $100-$180 – another expense, but Shopify’s template library is quite good.

You can build a free online store with Square if you can live with the Square branding in the footer and the free URL. Suffice to say, a subscription is better for serious stores using Square, particularly as many features are missing on the free and cheaper plans. That being said, Square Online is perfect for a single online ordering page (free to have) that can be used for delivery, collection and shipped orders.

Square Online ordering

Square has mastered the art of a simple – and free – web page for online ordering.

In-person payments at a point of sale

Those who only do business face to face should go for Square with its industry-tailored POS systems. There’s no value in using Shopify POS unless you’re actively using the mandatory ecommerce subscription that has to be paid for.

Shopify POS is designed to benefit online retailers who need a POS system that cleverly works works together with the online store for a unified sales experience between online and in-store purchases. This synergy is very valuable in today’s retail environment, for example when customers purchase something online and want to exchange it in person or they need to collect it in store. To fully benefit from this, the monthly cost of Shopify POS Pro is in most cases necessary.

Photo: Shopify

Shopify POS retail

The Shopify POS system suits a simple retail shop with a strong online presence.

Square, on the other hand, lets you use its general (Square Point of Sale), hospitality (Square for Restaurants), retail (Square for Retail) and service (Square Appointments) POS software independently from other sales channels if preferred. They all have free versions and there are paid subscriptions for all but the general POS system. This allows you to choose a system designed for your sector, with options to mix and match with any other Square tools in your account.

What about hardware? The most recent Shopify POS app only works on iPad and iPhone, not Android devices. Whereas Square Point of Sale and Square Appointments work on Android, iPhone and iPad, the restaurant and retail apps are made for iPad or Square Register.

Both Shopify and Square sell their own card readers that connect to its POS apps, but Square also offers Square Terminal and Square Register with POS software built in. Cash drawers, receipt printers and barcode scanners can connect with either provider, but Shopify is not built for hospitality and therefore won’t work with a kitchen printer. In other words, there’s more choice with Square.

Photo: Square

Square POS system

Square has different POS systems, equipment and hardware integrations for a variety of setups.

Payment system and remote payments

Square and Shopify come with their own credit card processing system built in, but only Shopify allows you to use an alternative payment system.

All of Square’s POS and online features use Square Payments. For this reason, you should not choose Square if you want another payment processor in your online store or brick and mortar shop. You can add PayPal as a payment method to an online store, though, on the Performance plan only.

Shopify Payments is Shopify’s default payment system, but you can use another online payment gateway with an added fee per transaction accepted. This gives you more flexibility to use a better payment processor, but the cost prohibits merchants on a budget to stray away from Shopify Payments.

Apart from its online checkout, Shopify has a basic virtual terminal labeled a “Draft Order”. As the name suggests, it’s best for creating orders on behalf of the customer. In contrast, Square Virtual Terminal is a very versatile solution designed for Mail Order/Telephone Order (MOTO) payments.

Email invoices can be sent through Shopify, but again, Square Invoices comes with more features including a dedicated app.

Payment links including QR codes for contact-free ordering can be generated and sent for free through Square – you only pay a transaction fee. Shopify does not offer payment links.

Does Square work with Shopify?

Does Square integrate with Shopify (or vice versa)? Yes and no.

Several inventory syncing platforms can connect your Shopify inventory with Square inventory, like Square Sync (Shopify App Store) and Finale Inventory (Square App Marketplace). This means you can use Shopify for your online store while simultaneously using Square as your brick-and-mortar solution and still keep stock synced.

What about using Square as your online store and Shopify as your POS system? As stated earlier, Shopify POS is only worth it when connected to a Shopify online store. That said, you could use Shopify for both POS and ecommerce and just use Square for its free tools like payment links and the invoicing app, but then your transactions won’t be processed by the same payment system.

Square integrates with several big ecommerce platforms such as Wix and WooCommerce, so you could also choose to bypass Shopify completely.

Customer service and reviews

Shopify offers 24/7 support for all its subscribers. This is much more than Square’s regular support hours from 6 a.m. to 6 p.m. (PT) on weekdays only. Paid subscribers to Square for Restaurants, however, do get round-the-clock phone support – essential for bars and restaurants operating nights and weekends.

What about reviews? They’re a mixed bag. Like most payment platforms, Shopify and Square get a fair amount of complaints from users about poor customer support and frozen payments (relatively common issue for payment services).

Reaching a real team member from Square is a challenge, as you’re encouraged to find answers through the online help section or submit a message. Shopify is not much better, even on the higher ecommerce plans.

Some users complain they pay more in Shopify fees and chargebacks than what they earn through the online store. Square’s lower price point means this isn’t an issue, but the downside is that Square’s POS or ecommerce software is too simple for some users.

Verdict: Shopify for online retailers, Square for everyone

The choice between Shopify and Square depends on your needs. Shopify is built for retail – you see this with its features catering to large product inventories, not services. Only Square has specific solutions for food and drink, beauty or other professional services.

Ecommerce-wise, Square does provide an easy entry point into selling online, but you’ll struggle with its online store limitations beyond a few hundred items in your inventory. Developers and designers will also struggle to customize a site with Square, but its templates live up to most people’s expectations of a modern website. The amount of customizations available with Shopify, however, far surpasses Square’s.

Brick and mortar shops might prefer Square for its easy, efficient POS systems, but Shopify does offer integrations with major POS systems other than its own pricey version. This means the choice between “Shopify or Square” need not be that black and white, though there’s lots to love about Square’s all-round features that work for most small businesses.

Still in doubt? Try Shopify’s 14-day free trial or sign up free with Square.