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Online Payment Options: Shopify vs. Square

If you are looking for an easy way to sell your products or services, either online or in a physical store - there are literally hundreds of shopping carts, POS solutions, and mobile apps available to the potential merchant these days. And perhaps Shopify and Square stand out the most.


Square is the most comprehensive free mPOS app out there. Founded in 2009, it was the first company to make card processing widely available to everyone using just a free card reader and a smartphone.

Shopify launched in 2006 as eCommerce software. Shopify has made selling online much easier for merchants, especially those who are just starting their business.

Shopify VS Square

Square and Shopify each have powerful POS apps targeted for iPads, a mobile solution, and multiple eCommerce options. Both give you the tools you need to run a physical shop or online store.

A quick look at Shopify’s services

Their card processing rates are even similar, with a couple of important caveats. The first of these is that Square and its POS app, Square Point of Sale, are completely free, while Shopify will charge you a baseline monthly fee (plus credit card fees and additional fees for add-ons). The second is that if you opt for higher-priced Shopify packages, you can also get lower processing fees.

f your sales are good enough to justify the monthly subscription and added costs, Shopify has some very useful features and stunning themes for your online store. It’s certainly a great option for merchants who want to focus primarily on their web sales.

Square at a glance

Square is the better option for merchants who sell in person but only process credit card payments sporadically — such as artists who vend at conventions and art shows — because there’s no monthly fee. Also, Square and its tools are well suited to retail, service, mobile businesses, and foodservice businesses, whereas Shopify is primarily for retailers.

Shopify POS Features

  • Accept All Forms Of Payments: Credit card, debit card, cash, check, and other customized payment methods.

  • Split Tender: This is useful and you can actually accept more than just 2 payment forms on a transaction.

  • Discounts: Apply discounts on individual items or on the whole order, by percentage or dollar amount.

  • Store Credit: The only fault with the store credit option is that there’s really no accountability in it. You can simply mark a payment as paid via store credit, with no need for proof of it at all. Still, this is a useful feature.

  • Reporting: Track sales, compare how products are selling, monitor traffic to your store, customer data, and more. With the higher-tiered plans, you can even build custom reports.

  • Item Variants: Set different colors, styles, pricing, etc. for your various items.

  • Syncing: Shopify automatically syncs inventory and product information across all your sales channels.

  • Email Or Print Receipts: Send digital receipts, or if you have an iPad and Shopify’s retail package, print them out.

  • Connect With External Payment Processors: You can choose to forgo Shopify Payments in favor of a third-party payment processor. Beware that if you choose this route you will have to pay an additional transaction fee to Shopify.

  • Inventory: Shopify’s inventory features are pretty impressive. In addition to tracking your stock levels across every channel where you sell, you can print barcodes, and more.

  • Employee Accounts: In a retail setup, knowing who is ringing up sales is especially important. With Shopify’s retail package, you can assign individual staff PINs, track register shifts and sales, and more.

  • Full & Partial Refunds: Issue a refund or store credit.

  • Gift Cards (iPad Only): You can only get gift cards if you opt for the Standard Shopify plan or higher. However, you can sell physical and digital gift cards.

  • Offline Capabilities: You can’t log in during an outage, but if you are already logged in you can still accept payments other than credit cards. This is very limited functionality, but it could get you through an outage mostly fine.

  • Tax Rate Calculation: Shopify will auto-detect your tax rate based on your store’s location (if using the POS), or based on your shipping zones for eCommerce. Shopify doesn’t calculate tax for international orders. You can also set up tax overrides for entire collections of products or individual products (or product variants, such as digital books vs print editions).

Square Point Of Sale Features

  • Accept Credit Card Payments: You can also log cash and check transactions, but this feature isn’t nearly as robust as Shopify’s.

  • Split Tender: Accept cash and card, or cash and check, or check and card.

  • Discounts: Apply discounts on individual items or on the whole order, by percentage or dollar amount.

  • Reporting: Square’s reporting features are pretty solid, but they’re not quite on the same level as Shopify’s. Still, Square’s reporting will cover all the basics and does have some advanced filters so you can customize the data. Square for Retail gives you three more advanced reports, the most significant of which is Cost of Goods Sold reporting.

  • Item Variants: Set different colors/styles/pricing for your various items. Square prefers to call these “price points” and you can track them in inventory. You can also add item modifiers, which are add-ons that don’t affect your inventory counts, though restaurants are far more likely to use this feature than retail shops.

  • Syncing: Square’s inventory feature will automatically sync across your online store and Square Point of Sale, and you can view it in the online dashboard.

  • Low-Stock Alerts: Square will send you daily email alerts for low- or out-of-stock products. A daily alert is very useful for busy merchants, especially because Square lets you set the threshold for low-stock alerts.

  • Email/SMS/Print Receipts: Send digital receipts via email or SMS, or print physical copies from any smartphone or tablet connected to a printer.

  • Inventory: Square has a solid free inventory management system, but you can also upgrade to Square for Retail (see below for more information) for more features, or integrate with other inventory services such as Shopventory (read our review).

  • Employee Accounts: You can use Square on any number of devices, but if you want employee accounts, multiple permissions, and timekeeping, you’ll need to sign up for Square’s employee management ($5 per employee per month) or upgrade to Square for Retail.

  • Invoicing: Send invoices from within Square Point of Sale or online.

  • Full And Partial Refunds: Pretty self-explanatory. Square will actually refund your processing costs in the event of a refund, too.

  • Gift Cards: No subscription required, no redemption fees. Just pay the cost of the cards themselves, and load them up on demand. Note these are physical cards only, but you can use them online.

  • Offline Capabilities: Square’s Offline Mode is actually one of the most powerful I’ve seen. You can still process credit cards during an outage, and they’ll go through so long as you connect to the Internet within 72 hours. The caveat, of course, is that you’re assuming responsibility for any transactions that don’t go through. This feature isn’t available with Square for Retail, only Point of Sale.

  • Tax Features: You can disable or enable tax collection with Square and set price to include tax, or have it added on separately. As with Shopify, you can enable or disable tax on specific items. However, there’s no auto-detect feature, so you need to manually look up your applicable tax rates based on location.

  • Loyalty Programs: Square’s loyalty program is priced on a sliding scale that starts at $25/month after you cross the threshold for a free account. All consumers have to do is opt for a digital receipt. You can set the purchase requirements to earn a reward (which could be a free item or a discount). It’s not the most advanced system, but it’s still pretty flexible.

  • Square also has a host of features/subscription services targeting restaurants and other service-based companies, none of which you’ll find in Shopify. This includes kitchen ticket printing, adding tip (by percentage or dollar amount), appointment booking, delivery services, and much more.

  • In addition, the company has rolled out a retail-specific app for a monthly subscription fee. Called (rather blandly) Square for Retail (read our review), this iPad-exclusive app offers a totally redesigned, search-and-scan-optimized user interface and advanced inventory reports. Square also throws in free, unlimited employee management. However, it comes with a per-register monthly subscription, which adds to your costs.


Overall, compared to Square Point of Sale, Shopify is more robust in most areas, such as its support for many payment methods and store credit, whereas Square is great for the simple things, like supporting SMS receipts as well as email, low-stock alerts, and its offline mode. Square for Retail comes closer to matching Shopify’s POS with free employee management and advanced inventory, but it does so by sacrificing a few of the features that make Square Point of Sale stand out, such as offline mode.

As a merchant, which one should you choose? Which service provides better value and has the best features? That depends largely on your own particular situation, as described above.

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