If you run a small business today, you can’t escape the question: which payment processor should I choose?
The options feel endless. Stripe, Square, PayPal, Clover, Shopify, Toast — and that’s just the tip of the iceberg. Each promises simplicity, speed, or cost savings. Each markets themselves as the “best” option. And each is a little different in ways that matter more than most business owners realize.
The truth is, there’s no single “best” processor. The right choice depends on your business model, your sales channels, your transaction volume, and your priorities. Picking the wrong one doesn’t mean failure, but it can mean paying more than you should, missing out on features you need, or getting locked into tools that don’t grow with you.
Let’s break down some of the most common processors SMBs turn to, what they do well, and where the tradeoffs lie.
Square
Square is often the entry point for small businesses. It’s easy to get started, the hardware is simple and stylish, and you can be taking payments in minutes. Square shines for businesses that want an all-in-one solution: payment acceptance, point-of-sale, invoicing, even payroll and scheduling.
But simplicity comes at a cost. Square uses flat-rate pricing (typically 2.6% + 10¢ for in-person swipes, more for online). For lower-volume businesses, this predictability is fine. But once you start doing significant volume, you may be paying more than you would under an interchange-plus model.
PayPal
PayPal is the giant of online payments. It’s instantly recognizable to consumers, and that brand trust can boost checkout conversions. If you sell online, having PayPal as an option can mean fewer abandoned carts.
PayPal also offers business accounts, invoicing, and integrations with most major platforms. But transaction fees can be high (often around 2.9% + 30¢), and moving money out of your PayPal account into your business bank can involve delays or fees. For e-commerce, PayPal is almost a must-have. For other models, it may not be your primary processor.
Stripe
Stripe has become the developer’s favorite. It’s flexible, customizable, and built to scale with complex online businesses. If you’re building an app, subscription service, or marketplace, Stripe’s APIs let you create exactly the payment flows you need.
But with that flexibility comes complexity. Stripe isn’t always plug-and-play. It can require technical resources to set up and maintain. And while their pricing is transparent (typically 2.9% + 30¢ per online transaction), you’ll need to dig into your specific setup to see if it makes sense for your margins.
Shopify Payments
For e-commerce merchants using Shopify, Shopify Payments is the default. It’s convenient, integrates seamlessly with your store, and avoids the extra transaction fees Shopify charges if you use another processor.
But you’re tied into Shopify’s ecosystem. If you decide to move platforms later, you’ll need to rethink your processing setup.
Industry-Specific Options (Toast, Clover, etc.)
Some processors are tailored to specific verticals. Toast is built for restaurants, with tools for menus, online ordering, and delivery baked in. Clover offers a range of POS hardware and app integrations for retail and service businesses. These can be great fits if you want industry-specific functionality. Just be sure to compare costs and flexibility before committing.
Which is the right processor for you? Here’s the honest answer: it depends.
If you’re a coffee shop just getting started, Square’s simplicity might be perfect. If you’re a SaaS startup, Stripe is probably your best bet. If you’re an e-commerce store, Shopify Payments (and PayPal as a backup) make sense. And if you’re a growing multi-location restaurant, Toast might be the right partner.
What matters most is aligning your processor to your business needs — and understanding the tradeoffs behind the marketing. No processor is “free.” No processor is the cheapest in every situation. And no processor is a perfect fit for everyone.
That’s where tools like Paygent.ai’s Processor Wizard come in (coming Q4'25). We don’t push one option over another. Instead, we help you see which processor actually fits your business, based on your transaction data, your priorities, and your growth plans.
Because at the end of the day, the best processor is the one that helps you run your business smarter — not just the one with the catchiest ad.