Square vs SumUp vs PayPal: Best Card Reader for Small Businesses?

Which card reader is best for a small business?

For most sole traders and small businesses, Square and SumUp are the easiest places to start. Both offer inexpensive hardware, simple pricing and no need to rent a traditional card terminal just to begin taking payments.

PayPal Point of Sale is also worth considering if PayPal already plays a big part in your business, for example if customers regularly pay you through PayPal online or by invoice.

The best choice is not simply the cheapest reader. A £5 or £10 difference in hardware is tiny compared with the transaction fees, software and admin you may use every day for the next few years.

If you want to compare more providers, see our mobile card readers guide, card machine providers and best card machines for small businesses.

Which one would we choose for a small business?

If you are starting from scratch, we would normally begin with Square or SumUp.

Square is particularly strong if you want more software around the payment. For example, a café, shop, salon or mobile service business may want products, customer records, digital receipts, reports or appointments in the same system.

SumUp is easier to understand if your main priority is simply taking cards. The standard PAYG rate is slightly lower at 1.69%, and there is no monthly processing fee on PAYG.

PayPal becomes more compelling if you already use PayPal heavily online. Keeping online and face-to-face payments closer together can be more useful than saving a few pounds on hardware.

Square Reader

Square Reader costs £19 + VAT and charges 1.75% for standard in-person card payments.

It pairs with a compatible phone or tablet using Bluetooth. The real attraction is Square’s software. Its standard Point of Sale software has no monthly fee and can help you manage products, customers, receipts and reporting.

For a one-person business, this gives you room to grow without buying a full till system on day one.

Square also offers larger devices such as Terminal, Handheld and Register if your business becomes busier.

Read our full Square card reader review.

SumUp Solo Lite

SumUp Solo Lite costs £25 + VAT and charges 1.69% per card-reader transaction on the standard PAYG plan.

Like Square Reader, Solo Lite pairs with your phone. It is a sensible fit for tradespeople, market traders, mobile beauty businesses, personal trainers and other sole traders that just want a simple way to get paid.

If you take more regular card volume, SumUp also offers Payments Plus for £19 a month. That reduces eligible domestic consumer-card payments to 0.99%. Other cards can remain at the higher rate, so check your card mix before assuming every sale will cost 0.99%.

SumUp also offers the standalone Solo and Terminal if you do not want to rely on a phone.

Read our full SumUp card reader review or SumUp fees guide.

PayPal Point of Sale: best if you already use PayPal

PayPal’s current in-person system is called PayPal Point of Sale. The first PayPal Reader currently costs £29 excluding VAT, with additional readers priced higher. Standard card-present payments are 1.75%.

The Reader pairs with a phone or tablet. PayPal also offers an all-in-one Terminal for businesses that want a standalone device.

The biggest reason to choose PayPal is not that its card-present rate is cheaper than Square or SumUp. It is that you may already use PayPal for online payments, invoices or other parts of the business.

Funds from PayPal POS sales can be available quickly in the PayPal Business account, after which you can transfer money to your bank.

How much difference do the fees make?

At low turnover, not much.

If you take £2,000 a month by card:

• Square at 1.75% = £35
• SumUp PAYG at 1.69% = £33.80
• PayPal POS at 1.75% = £35

That means the difference between Square and SumUp is only £1.20 a month at this level.

For a sole trader or tiny business, it makes more sense to choose the setup you actually enjoy using than to save £1.20 and live with software you dislike.

Which is best for a sole trader?

Square or SumUp. Both are cheap to start, both avoid a traditional terminal-rental agreement, and both are easy to understand.

Choose Square if you value the wider software. Choose SumUp if you mainly want simple PAYG payments and the slightly lower standard percentage.

See our card machines for sole traders guide.

Which is best for tradespeople?

A plumber, electrician, builder or other mobile tradesperson normally does not need a complicated till system.

Square Reader or SumUp Solo Lite will usually do the job. You can take payment at the customer’s home or site, send a receipt and avoid chasing a bank transfer later.

Tap to Pay on a compatible phone can also work as a useful backup. See our Tap to Pay and iPhone reader guide.

Which is best for cafés, shops and salons?

Square becomes more attractive here because of the wider POS tools. If your business gets busier, however, do not restrict the shortlist to these three brands.

Dojo, Clover and traditional merchant-service providers can make more sense once you need several terminals, staff sharing, EPOS integrations or better commercial pricing.

See our guides to best card machines for small businesses, Dojo and Clover.

Which is best if you already use PayPal?

PayPal POS deserves a serious look if PayPal is already central to your business.

If most of your online customers pay with PayPal, having face-to-face sales feed into the same wider ecosystem may make administration simpler. That convenience can matter more than a few pounds difference in reader cost.

Do you need a card reader at all?

Not always. Square, SumUp and PayPal all support forms of phone-based contactless acceptance on compatible devices.

If you only take the occasional payment, Tap to Pay may be enough. If you rely on card sales every day, we would still prefer having dedicated hardware as your main setup and the phone as a backup.

See our contactless payment guide.

Questions to ask before choosing

1. Do I want the reader to work with my phone or on its own?
2. What is the normal in-person transaction fee?
3. Are there monthly charges?
4. Do I need products, stock or appointment tools?
5. Will staff need to share the reader?
6. How quickly does money reach my bank?
7. Can I send digital receipts?
8. What happens if I need another reader?
9. How much do online or manually entered payments cost?
10. When would a tailored merchant-services quote become cheaper?

Frequently asked questions

Our verdict

For most UK sole traders and small businesses, Square Reader and SumUp Solo Lite are the two easiest starting points. Square gives you more free software around the payment, while SumUp has the slightly lower standard PAYG in-person percentage.

PayPal POS is a sensible third option when PayPal is already important to your business. Once your card turnover becomes substantial, compare all three with fuller merchant-service packages rather than assuming a PAYG reader will always be cheapest.