Block vs. PayPal 2022 | Credit Card Processing




Popular Credit Card Processing Companies

For business owners that want to take payments via credit card, debit card, and more, navigating the many credit card processors can feel overwhelming. Two of the most popular options are Block (formerly Square) and PayPal. While they are both well-known in the industry, the main difference is that Block is more focused on businesses that are taking mostly in-person transactions, while PayPal is geared more toward online transactions. Both companies do offer a similar suite of services to cover all types of transactions, however.

Block and PayPal both use flat-rate pricing in which you pay a set amount for each transaction. This helps keep things simple since there are no fluctuating prices. As such, this type of model is best for smaller businesses with lower volume. (Larger businesses are better served by the more complex cost-plus pricing model, since the higher the volume, the less you’ll pay.)

Block and PayPal are also both well-known in the industry, so you’re not dealing with a fly-by-night operation. And because they both offer no-contract plans and transparent pricing, you don’t have to worry about getting sold into a payment solution that isn’t the right fit.

Some considerations are if you do more in-person or online transactions, if you want your customers to be able to pay via PayPal, and if you want your deposits to go directly to your bank account. But, choosing between Block and PayPal really comes down to personal preference since pricing is similar.

Compare Credit Card Processing Fees

PayPal »
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*Transactional fees displayed correspond with the cheapest monthly plan or lowest credit card processing volume (if applicable). *Table does not list all fees

PayPal and Block both utilize flat-rate pricing structures. Their fees don’t vary by card type, as they would with interchange-plus processors, but they do vary based on how each transaction is completed. Here’s a breakdown:

In-Person: 2.6% plus 10 cents
Online: 2.9% plus 30 cents
Keyed-In: 3.5% plus 15 cents

In-Person: 2.7% plus 30 cents
Online: 2.9% plus 30 cents
Keyed-In: 3.5% plus 15 cents

With both PayPal and Block, rates are higher when the card isn’t present because there’s a greater risk for fraud. As you can see, Block and PayPal offer comparable transaction rates. For brick-and-mortar businesses, the difference might come down to your average ticket cost or what type of POS system and hardware you want to use. For online businesses, the choice may rest on whether you want to accept PayPal payments from your customers. PayPal is also available in more countries.

Both PayPal and Block offer processing without monthly fees or long-term commitments, which is great for startups. Both also offer free card readers when you sign up. Block hardware ranges from $10 to $799, while PayPal integrates with five POS systems that vary in cost.

Block is one of the few payment processors we reviewed that doesn’t have chargeback fees for disputed transactions. In contrast, PayPal’s chargeback fee is $20, which is higher than the average fee (around $15) among the companies in our rating. PayPal also charges $30 per month for access to a virtual terminal, while it’s free with Block. Meanwhile, PayPal offers discounted rates for nonprofits, while Block doesn’t.

Both PayPal and Block offer a variety of add-ons. PayPal has extra payment processing services, like recurring payments, account monitoring, and invoicing. Meanwhile, Block offers business management services like payroll software and marketing assistance. Most of these items come with additional costs.

While Block offers custom rates for some large clients, companies with a high volume of credit card sales might want to consider payment processors that provide interchange-plus pricing, which is typically favorable for large companies. PayPal and Block don’t require merchant accounts, which makes setup easy. But professional reviews note both are known to freeze accounts if there’s any indication of fraud, like a particularly big sale, which may make it difficult to access your funds at times.

Block is probably best known for its hardware since it started out with its trademark square-shaped device for mobile payments. Customers can get a free magstripe reader, but if you need to accept other types of payments or want more of a “register” experience, Block offers Block Reader for Contactless and Chip with Block Stand, Block Terminal, and Block Register for purchase. The more expensive options offer payment plans depending on your state. There are also lots of accessories available, including printers, barcode scanners, mounts, and docks. With Block, there’s no monthly fee for its virtual terminal, while it costs $30 per month with PayPal.

PayPal also offers a free Chip and Swipe Card Reader for credit card transactions and sells a Chip and Tap device for contactless payments. However, for POS hardware, you’ll need to work with a third party that integrates PayPal. Depending on which vendor you choose, you may be able to lease or buy the hardware.

Overall, Block gets the edge over PayPal when it comes to hardware.

Both solutions work well with third parties. Block users have to worry less about POS integrations since it offers a robust POS system. But PayPal integration is built into a number of POS platforms (like Vend, Lavu,, BrightPearlPOS, and others) so you’ll have flexibility. In addition, PayPal integrates with other business platforms like Shopify, BigCommerce, Intuit QuickBooks, Xero, and eBay.

Block’s third-party integrations can be found in the Block App Marketplace. You’ll find options for customer relationship management software, bookkeeping, and more including Xero, Intuit Quickbooks Online, TaxJar, SumAll, Fresh KDS, Postmates, and ZipRecruiter.

Both Block and PayPal take security seriously, and for the most part, out of customers’ hands. For transactions, Payment Card Industry Data Security Standard (PCI DSS) compliance is the gold standard, as well as end-to-end encryption and EMV-compliant equipment (which means using a chip reader as opposed to just a magstripe). Both Block and PayPal offer EMV payment hardware, encrypted transactions, and PCI compliance.

For PCI compliance, Block handles the fraud monitoring for the entire transaction, so it’s one less thing that businesses need to worry about. Similarly, because PayPal transactions take customers off of a merchant’s site and onto PayPal’s form, it indicates that PayPal handles at least part of the PCI compliance. For in-store transactions contact PayPal for more information. The exception is for PayPal Pro transactions. For those, the merchant must take on some of the PCI responsibility since the transaction is happening on the merchant’s own site. This requires quarterly scans and annual questionnaires to maintain compliance.

Both Block and PayPal are aimed at businesses looking for a “set it and forget it” payment solution. Unlike more complex and customized merchant accounts that involve developers, the goal with these two processors is to get you up and running quickly so that you can focus on the other aspects of your business. In other words, there isn’t a lot of hand-holding or one-on-one support during the setup, and if you need to troubleshoot something, you won’t have a dedicated sales representative on call to help you.

That said, both Block and PayPal offer an abundance of FAQ and troubleshooting content on their sites so that customers can quickly find the answers to common issues. PayPal also has a community forum where you can ask questions. If you do need a person to guide you, you are probably better off initiating a live chat or using online messaging or social media as opposed to trying to get someone on the phone.

Though both companies do have phone customer service, neither make it available 24/7 for all accounts.

Block Is Recommended For:

  • Brick-and-mortar businesses that want quick and easy setup

  • Busy small business owners that want access to lots of tools on one platform

  • Users who could benefit from Block’s free POS system

Block Isn’t Recommended For:

  • Big companies that would benefit from interchange-plus pricing

Block is a great option for companies that conduct business in person, especially those that want to get up and running quickly. You don’t need to sign up for a merchant account, and you can get approved in just a few minutes.

It’s well known for its hardware options, which range from on-the-go card readers to a dual-screen register. You even get a free magstripe reader when you activate your account. Block’s basic POS system is free, which can also be a big draw. The Block POS app is downloadable from the Apple App Store and Google Play store for your tablet or mobile device.

With Block, there are no monthly fees or contracts, so you can cancel at any time. There’s also no cost for chargebacks, PCI compliance, or Block’s virtual terminal. Block employs a flat-rate pricing structure, with transaction rates comparable to other payment processors that made our Best Credit Card Processing Companies of 2022 rating, like PayPal. It’s a simple pricing system for small businesses, but large companies might find preferable rates with credit card processors that offer lower interchange-plus pricing with a monthly fee. Charities that accept lots of credit card payments might also want to look elsewhere, as Block doesn’t offer discounted rates for nonprofits.

When it comes to online transactions, Block and PayPal offer the same rates, and both are easy to implement. Block offers free tools and paid plans to help you build an e-commerce site. But PayPal is the better choice for companies who want to accept it as a form of payment on their website. Meanwhile, both Block and PayPal support lots of integrations, including Intuit QuickBooks Online.

Some businesses might not qualify to work with Block or other payment aggregators. These include gambling enterprises and some financial institutions. Block’s policy on restricted businesses can be a bit vague. For example, it prohibits businesses selling “high-risk products” or “occult materials.” If you think your business may be a high-risk merchant, contact Block for more information or consider another processor on our rating.

Depending on what you purchase from Block, round-the-clock phone support may be available, but it’s not provided with all accounts. Online sellers who want 24/7 phone assistance might want to consider Stripe. Block does offer helpful articles on its website for users who want to troubleshoot on their own.

Finally, Block offers a variety of extra business tools. Using one platform to run payroll, manage appointments, and administer your loyalty program can be handy for busy small business owners, though these services may come with extra fees.

PayPal  »


Best for E-Commerce

Monthly Fee
$0 & Up

Online Fee
2.9% + 30¢

Swiped/Chip Fee

PayPal Is Recommended For:

  • Companies that want to get set up quickly

  • Businesses that might benefit from PayPal’s brand recognition

PayPal Isn’t Recommended For:

  • Large companies that might find lower rates from processors with monthly fees

  • Businesses that want round-the-clock phone support

  • Companies that might be susceptible to account freezes

Like Block, PayPal is easy to set up, and there are no long-term commitments. For online retailers, there are several ways to integrate PayPal into your checkout flow, including an option known as PayPal Payments Pro that runs $30 per month and allows users to stay on your site throughout the checkout process. Meanwhile, there are no monthly fees for standard processing, and PayPal’s online transaction rate is the same as Stripe’s and Block’s – but with PayPal, you get the added bonus of being able to accept PayPal as a form of payment. Research from Nielsen has shown that customers are more likely to complete transactions on websites where the PayPal logo is visible because they trust the brand.

PayPal isn’t only for online businesses, as it supports a wide variety of integrations, including several POS systems. Plus, PayPal offers two different portable card readers that can be used to take payments through the PayPal Here app, which allows you to accept payments from anywhere. You even get a free reader when you sign up. PayPal offers another app too: The PayPal Business app that allows you to track invoices, find customer information, transfer money, and more.

With PayPal, you might have to pay for a couple of things that come standard with Block: chargebacks and a virtual terminal. The former is $20 per incident, a higher price than most of the processors in our rating. Moreover, PayPal can raise its transaction rates up to 5% for high-risk merchants.

Like Block, PayPal won’t work with all businesses, and some firms might need to get approval before signing up. That includes airlines, jewelry stores, or some financial institutions. And like Block, PayPal customers may run the risk of having their accounts frozen over suspicious activity, including big spikes in sales. Furthermore, PayPal might not be the best choice for large businesses that could benefit from interchange-plus pricing, or companies that require phone support at all hours.

Finally, PayPal offers some extra services for additional costs, including recurring payments, fraud monitoring, and chargeback protection. PayPal also operates in more countries and currencies than some of its competitors, including Block.

Credit Card Processing Companies

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From pricing structures and fees to hardware and integrations, there’s a lot to consider when it comes to choosing a payment processor. Find help choosing the one that’s right for your business with our other reviews.

Other Ratings from 360 Reviews

Our reviews go beyond credit card processors. Learn more about other software and service providers, and make informed decisions for your business.

Why You Can Trust Us: 24 Credit Card Processing Companies Researched

At U.S. News & World Report, we rank the Best Hospitals, Best Colleges, and Best Cars to guide readers through some of life’s most complicated decisions. Our 360 Reviews team draws on this same unbiased approach to rate the products that you use every day. To build our ratings, we researched more than 24 Credit Card Processing Companies and analyzed 15 reviews. Our 360 Reviews team does not take samples, gifts, or loans of products or services we review. All sample products provided for review are donated after review. In addition, we maintain a separate business team that has no influence over our methodology or recommendations.

U.S. News 360 Reviews takes an unbiased approach to our recommendations. When you use our links to buy products, we may earn a commission but that in no way affects our editorial independence.

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