TL;DR
Both Square and Shopify Payments charge 2.9 percent plus 30 cents on online card transactions at their entry tiers, so the headline rates tie. Square wins for any merchant who needs free point-of-sale software, in-person retail, or a zero monthly software fee. Shopify Payments wins for sellers already on a Shopify store, because Shopify charges a 0.5 to 2 percent third-party transaction fee on every order if you use any other processor. Above roughly $200,000 monthly online volume, neither beats interchange-plus.
How we ranked
We compared Square and Shopify Payments on the six criteria operators actually feel on a statement:
- Effective rate at $25K, $100K, and $500K monthly volume, calculated using each processor's published card-present and card-not-present rates.
- Software and platform fees that hit the bill before the first swipe (Shopify plan tiers; Square free baseline plus optional paid plans).
- Contract length and early termination fees. Both are month-to-month with no ETF, which is non-trivial in this category.
- Settlement speed on the standard schedule, not the paid-instant-deposit upsell.
- Hardware and platform lock-in, including the cost of switching processors mid-stream.
- Coverage of the four hidden fees: PCI, batch, monthly minimum, and chargeback handling.
We did not weight loyalty programs, marketing tools, or app ecosystems. Those are real, but they do not show up on a processing statement and they vary by vertical.
At a glance
| Provider | Headline pricing | Contract | Settlement | Best for | Watch out for |
|---|---|---|---|---|---|
| Square | In-person 2.6% + 10 cents; online 2.9% + 30 cents; keyed 3.5% + 15 cents | Month-to-month, no ETF | 1 to 2 business days | In-person retail and food service under $250K monthly | Account stability holds on high-ticket or seasonal spikes |
| Shopify Payments | Basic 2.9% + 30 cents online, 2.6% + 10 cents in-person; rates drop on higher plans | Month-to-month plan; no processor ETF | 2 to 3 business days, varies by region | Online sellers running a Shopify storefront | 0.5 to 2% third-party fee if you use any other processor |
Square
Square publishes a flat-rate card on its pricing page: 2.6 percent plus 10 cents for in-person tapped, dipped, or swiped transactions; 2.9 percent plus 30 cents for online checkout; 3.5 percent plus 15 cents for keyed-in card-not-present; and 3.3 percent plus 30 cents for invoices paid by card. There is no monthly software fee for the base POS, no PCI fee, no statement fee, and no batch fee.
Pricing structure is flat across all card brands and reward tiers, so a premium rewards Visa costs the same as a regular debit card on the merchant statement. That is good for predictability and bad for any merchant whose mix skews to debit, where interchange-plus would save 80 to 130 basis points on those specific transactions.
Contract terms are month-to-month with no early termination fee. Hardware sits between $0 (the magstripe reader) and roughly $799 (Square Register). The hardware is locked to Square, so switching processors later means buying a new terminal.
Settlement runs on a 1 to 2 business day schedule, with same-day or instant deposits available for an extra 1.75 percent. Square reserves the right to hold funds on accounts that show high chargeback risk, large tickets relative to historical volume, or sudden volume jumps, which is the single most common complaint among Square users with seasonal spikes.
Who it's for: in-person retail, food service, and service businesses under $250K monthly volume who want a free POS and no contract.
Who should avoid it: any merchant with a high debit mix, B2B card-not-present volume, or above $250K monthly. At that volume, interchange-plus from Helcim or Stax usually beats Square by 30 to 60 basis points.
Shopify Payments
Shopify Payments is the in-house processor for Shopify storefronts, powered by Stripe on the back end. Rates are tied to the Shopify plan you pay for. Per Shopify's public pricing, Basic at $39 per month charges 2.9 percent plus 30 cents online and 2.6 percent plus 10 cents in-person. The Shopify plan at $105 per month drops online to 2.7 percent plus 30 cents and in-person to 2.5 percent plus 10 cents. Advanced at $399 per month charges 2.5 percent plus 30 cents online and 2.4 percent plus 10 cents in-person. Shopify Plus starts at $2,300 per month with custom rates.
The mechanic that defines Shopify economics is the third-party transaction fee. If you use any processor other than Shopify Payments to settle Shopify orders, Shopify charges an additional 2 percent on Basic, 1 percent on Shopify, and 0.5 percent on Advanced, per their pricing page. This is on top of whatever the third-party processor charges. The fee effectively prices Shopify Payments into the platform.
Contract is month-to-month on the Shopify plan; there is no separate processor contract or ETF. Settlement runs on a 2 to 3 business day cycle in the U.S., longer for some international banks.
Who it's for: any merchant already running a Shopify store. The third-party fee makes the math one-sided.
Who should avoid it: any merchant who is not on Shopify, or any high-volume Shopify Plus account that has negotiated custom rates with a separate gateway.
What it costs at $25K, $100K, and $500K
Headline rates do not tell you what the statement says. Run the math at three volume tiers, assuming an average ticket of $75 and a roughly 80 percent online / 20 percent in-person split:
At Square: same card math without the $39 plan. Total $797. Square wins by $39 per month, $468 per year, if and only if you do not need a Shopify store.
At $500K monthly, neither flat-rate option is competitive. Visa's published interchange schedule puts most card-present consumer credit at 1.43 percent plus 5 cents and CPS Retail debit at 0.80 percent plus 15 cents. An interchange-plus deal at IC + 0.40 percent will land an effective rate around 2.10 to 2.30 percent, which is 60 to 80 basis points below either Square or Shopify Basic. On $500K monthly, that gap is $3,000 to $4,000 per month, or $36,000 to $48,000 per year.
Verdict
For an in-person retail or service business under $250K monthly volume and no ecommerce platform, Square wins. The card rates match Shopify Basic's in-person rate, and you save the plan fee. For any merchant who is already running, or planning to launch, a Shopify storefront, Shopify Payments wins. The 0.5 to 2 percent third-party fee on the platform reprices every other option until you reach Shopify Plus volumes and can negotiate it down.
Above $200K monthly, neither flat-rate processor is the right answer. Move to interchange-plus through Helcim, Stax, or a direct merchant account, and you will recover 30 to 80 basis points depending on your card mix. On a five-year horizon at $300K monthly, that math typically clears $60,000 to $90,000 in saved fees, which is the entire reason interchange-plus exists.
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