PayPal is known as the giant in the industry of mobile payments and it has had years to get a head start on the rest of the competition, but that hasn’t stopped other payment processors and providers from popping up, including one known as Square. Square has managed to gain serious ground in the mobile payments department mainly due to its release alongside newly available NFC technology integrated into the latest smartphones. PayPal has its fingers in plenty of pies as well, but in the end, who has a better strategy? We hope to peel back the mystery of this by examining the similarities and differences of each company and figure out what’s in store for them in the future.
Both Square and PayPal offer mobile apps that allow you to check your balance, initiate payments and send money to other users. The main difference between PayPal’s app and Square’s app is that Square was designed to utilize existing forms of payment (debit cards, checking accounts) and near field communications to allow payment processing without the actual use of the card and in real-life settings (through systems such as MasterCard PayPass). PayPal’s app still revolves around person-to-person spending and purchases and its app does not include NFC payments.
Square and PayPal each offer common and unique solutions to getting paid. PayPal has thrived on the ability to allow individuals to pay one another without revealing sensitive account information. This has been PayPal’s primary claim to fame, but in the age of smartphones, Square is playing catch-up. Square utilizes the same system as credit card processors do; processing payments using Square’s free card reader makes it easy to accept credit cards. PayPal recently unveiled its PayPal Here as a competing solution to Square, who has been making inward ground on PayPal’s market in recent months.
The Future of Square and PayPal
Square seems to have its head on its shoulders and is taking a much more sensible long-term approach to mobile payments. By using NFC technology to allow mobile phone payments and the free credit card readers that give the user the same ability to process cards as a vendor but for a smaller fee than a PayPal transaction, Square stands to grow in the coming years as a serious alternative to PayPal. Currently, PayPal handles approximately 15 times more volume than Square but with frustrations at the monopoly of PayPal running high, it’s only a matter of time before it is dethroned – at least in part.