Square Invoices vs PayPal Invoicing 2026: Fees Compared

For 100 US invoices of $100 each paid by domestic card, PayPal Invoicing costs $348 in published processing fees versus $360 on Square Free, as of October 28, 2026. Square is cheaper on smaller card invoices under the stated rates. PayPal's bank payment cap can matter on larger invoices, while Square Checking changes Square's bank fee calculation.

These are fee models, not quotes. We use one successful payment per invoice, no taxes or tips, a single US location and no refunds, currency conversion, negotiated rates, or other add-ons. Rates and eligible payment methods depend on the account and transaction. Check Square's US fee table, Square's plan pricing, and PayPal's US invoicing page before choosing.

Toolradar data: Toolradar, the software directory we run, lists 238 invoicing tools evaluated on its invoicing category page, read October 28, 2026. The directory's Square and PayPal profiles provide a starting point for a wider shortlist. We compare the vendors' own published invoice terms below, not directory ranks.

At a glance

Square's named plans here are the new Square Free, Plus and Premium plans, not its separately named legacy Invoices Plus subscription. Existing customers should inspect their actual plan and fee schedule. PayPal's invoice page lists card and Apple Pay at the same invoice rate, while PayPal and Venmo payments are 3.49% + $0.49. A customer choosing a wallet can change the fee while the invoice total stays fixed.

What do 100 card payments cost?

Assume 100 separate $100 invoices paid online with eligible US domestic cards, with no refund or extra charge. The invoice total is $10,000. The Square plans below cover one location and the regular monthly subscription, without a trial or negotiated rate.

PayPal's card rate produces a $12 lower fee total than Square Free in this exact example. Square Plus saves $40 in transaction fees against Free, but its $49 subscription makes it $9 more expensive overall. A paid plan can still be worthwhile if its extra features replace work the team otherwise pays for; this calculation does not price that work.

At 100 invoices of $1,000, the calculation changes. Square Free costs $3,330, Square Plus costs $2,979 including its subscription, and PayPal card costs $3,039. Under these assumptions Square Plus is $60 cheaper than PayPal card. Taxes, refunds, additional locations and other payment rails would alter these totals.

For Square Free versus PayPal card on one invoice, the rates cross at approximately $61.29: 3.3% × amount + $0.30 = 2.99% × amount + $0.49. Below that amount Square Free's published fee is lower; above it PayPal's card fee is lower, before rounding and any other fees. This threshold does not compare PayPal or Venmo wallet payments, Square's paid plans, or custom rates.

How do bank payments change the comparison?

PayPal lists Pay by Bank at 1% with a $10 fee cap. Square Free lists invoice ACH at 1% with a $1 minimum; its published table says invoice ACH deposits into Square Checking carry $0 processing fees. Square Plus and Premium list the same 1% invoice ACH rate and $1 minimum with a $10 cap, with that Square Checking exception. These are invoice rates: Square lists separate terms for ACH via its API.

For one eligible $5,000 invoice paid by bank, PayPal's listed capped fee is $10. Square Free's 1% invoice ACH fee would be $50 if it is not deposited into Square Checking; the listed Square Checking processing fee is $0. Square Plus's capped transaction fee is $10, plus its subscription. Eligibility, deposit destination and actual account terms must be checked before relying on a cap or exception.

The comparison is about the cost of receiving a customer payment, not the price of paying suppliers. Finance teams managing outbound bills should use the accounts payable checklist, BILL review, or Melio review for that different workflow.

Which invoice workflow fits?

Square's invoice instructions describe unlimited digital invoices, estimates and recurring invoices. They also say Square Plus, Premium and legacy Invoices Plus subscribers can send batch invoices, use multiple-package estimates, automatically convert accepted estimates and use custom fields and content templates. Batch creation happens in the dashboard. A finance team should cost a paid plan if those features are required, rather than assuming the Free rate buys them.

PayPal's invoicing page says users can create invoices with their company name and logo, add taxes, discounts and notes, share invoices by email or a link, track payment status and schedule reminders. Its page lists PayPal, Venmo, debit and credit cards, Apple Pay, Pay Later and Pay by Bank among options. Availability and fees vary by payment method and account; do not assume every buyer sees every option.

Square's support page describes invoices up to $1 million, with customer partial payments up to $50,000 toward the balance. That is an invoice-system limit, not proof that a particular customer's payment will be approved. PayPal's eligibility and transaction limits should be checked in the merchant account before sending unusually large invoices. Both payment systems need a separate review of the accounting process: an invoice that is marked paid still needs to be matched to a bank deposit and the ledger.

If the priority is accounting rather than payment collection, compare the QuickBooks Online review, Xero review, and Zoho Books review. The best billing software guide offers another starting point for a larger shortlist.

Fees that can change the result

Payment method. The $348 PayPal example applies to cards and Apple Pay under the invoicing page's stated rate. If all 100 customers instead pay with PayPal or Venmo at 3.49% + $0.49, the total becomes $398. If the customers split between methods, calculate each group separately.

International cards. Square lists an additional 1.5% for cards issued outside the seller's country. Do not extrapolate our domestic-card comparison to international payments. PayPal's terms and any currency conversion costs also need to be checked for the actual transaction.

Card on file. Square's table separates manually entered and card-on-file payments at 3.5% + $0.15 from online invoice payments. A recurring invoice is not proof that the online invoice rate applies to every payment; check the rate that will apply to the account's chosen payment method.

Locations and add-ons. Square's $49 and $149 monthly plan prices apply per location. Our scenario contains one location and no add-ons. A second paid location changes the fixed-cost line before a single invoice is paid. A finance team that already uses a paid Square plan for other work should also consider the incremental cost of invoicing rather than allocating the entire subscription to it by default.

Limits and refunds. The examples are list-price illustrations, not a total cost of ownership. They exclude disputes, refunds, taxes, foreign exchange, settlement timing and negotiated rates. Ask each provider for the applicable merchant schedule, then reconcile a representative month using the payment mix rather than the lowest advertised percentage.

Which should a CFO choose?

Choose PayPal Invoicing for the illustrated $100 domestic-card scenario if the published card fee applies and its invoice workflow meets the business's needs. At that amount it is $12 cheaper than Square Free across 100 payments. The result does not predict how much customers will pay by PayPal, Venmo or bank.

Choose Square when existing Square operations, invoice features, or the stated Square Checking ACH exception make the complete workflow a better fit. If considering Plus for its lower card rate, include the $49 per-location subscription and the other jobs it covers. Budget using the actual payment mix. A cheap rate on a rail customers rarely use will not describe the month.

For broader spend controls, see the expense management software guide and the AP automation guide. Neither invoice service's published fee table establishes the cost of the entire finance stack.

Frequently asked questions

Is Square Invoices free?

Square Free is listed at $0 per location, and Square describes invoice creation and recurring invoices in its plan. Payment processing still has fees. The new Square Plus and Premium plans cost $49 and $149 per location per month, respectively.

Does PayPal charge to send invoices?

PayPal says creating and sending invoices is included with an account. Fees depend on how the invoice is paid: its US invoicing page lists 2.99% + $0.49 for eligible card and Apple Pay payments, and 3.49% + $0.49 for PayPal and Venmo.

Is Square cheaper than PayPal for card invoices?

For the published Square Free and PayPal card rates used here, Square is cheaper below approximately $61.29 per successful domestic card payment and PayPal is cheaper above it. The calculation excludes rounding, additional fees and subscription charges.

Does either provider cap bank payment fees?

PayPal lists a $10 cap for Pay by Bank. Square lists a $10 cap for invoice ACH on Square Plus and Premium, not on its Free invoice ACH line. Square also lists a $0 processing fee for ACH deposited to Square Checking. Check eligibility and your account terms.

Can I send recurring invoices with Square?

Yes. Square's support page describes recurring digital invoices. Its fee table also distinguishes online invoice payments from card-on-file payments, so confirm which rate applies to the payment configuration.

Are these prices valid outside the US?

No. This comparison uses the vendors' US pages and US-dollar rates. Availability, rates and terms vary by country and account, so use the applicable local fee schedule.

Methodology: We compared public US invoice pricing and product documentation read on October 28, 2026. The worked totals assume one successful payment per invoice, one location and no extra fees. We did not test either product or verify individual merchant eligibility. Prices and features may change.

Cite this: CFOpresso, "Square Invoices vs PayPal Invoicing 2026: Fees Compared", October 28, 2026.

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