International sales are a massive opportunity for ecommerce stores. The latest figures show that 40% of non-U.S. shoppers have made online purchases from a foreign site, with cross-border purchases averaging higher than domestic.
As a result, more and more ecommerce stores are looking to sell internationally. There are, of course, a series of challenges to solve before embarking on this adventure, including logistics, localization, legal and financial aspects.
And of course, the processing of international payments, whose resolution will clear the way towards international operations. This is the problem we will be tackling today.
- What is the best payment platform for international payments?
- What should you look after?
- Which one offers the lowest fees?
In this article, we will go over these questions and compare two of the leading payment processing platforms: Square and Stripe. Time to see which one is the best fit for your store!
What is a payment gateway?
A payment gateway is a technology that allows ecommerce merchants to accept credit and debit card transactions from online customers. A payment gateway will:
- Process the payment information
- Secure the transaction
- Ensure the seller gets the payment
You can picture payment gateways as a bridge between stores, customers and bank accounts. As long as you provide the option to pay online, you need a payment gateway.
How are international payments different from domestic ones?
International payments bring in several challenges, and you have to carefully evaluate each one of them before picking a payment gateway platform:
- Availability: Are your preferred payment processing solutions available in the countries you will be operating in?
- Fees and currency conversion: What are the fees applied to international purchases? How does the platform handle currency conversion? For countries with unstable currencies, this could become a deterrent for customers, and also impact on businesses operating on low margins.
- Customer support: What languages are supported by the platform?
- Legal status: What is the legal status of the platform selected in the countries the company will be operating? Is it compliant with local legal frameworks and infrastructure? Think of companies operating in Europe and GDPR.
- Third-party operators: Look out for middlemen operators that payment processors might associate with, for example to issue prepaid cards.
- API availability: In order to make sure the solution you pick integrates well with your workflow and internal processes, look into their integrations and API availability. Integromat can also help with that.
- Features depending on the country: Check that the features offered by the payment processors in the US are similar to what they offer abroad.
Now that we’ve established these basic questions, let’s go over our two platforms of the day: Stripe and Square.
What are the differences between Stripe and Square?
Stripe and Square are two of the most popular payment processing companies in the US, let’s have a look at their main specifications:
- No monthly fee, pay-as-you-go model (see full pricing here)
- In-person purchases: 2.7% + $0.10
- Online processing fee: 2.9% + $0.30
Stripe has a significant partner program, Stripe features hundreds of apps and integrations in areas including:
- Communication platforms such as ListBuilder, Plutio, Klaviyo
- Accounting and billing software like Xero, Zoho Subscription, or Payhere
- Ecommerce tools including Mailchimp Websites, BigCommerce or Squarespace
- Customizable checkout experience
- Advanced integrations, features for tech-savvy teams
- Available in multiple languages
Does Stripe accept international payments? Yes.
- No monthly fee, pay-as-you-go model (see full pricing here)
- In-person purchases: 2.6% + $0.10
- Online processing fee: 2.9% + $0.30
Square integrations are available on their App marketplace. Notable integrations include:
- Ecommerce with platforms like WooCommerce, BigCommerce and Magento
- Form creation with tools like Jotform, Wufoo and Cognito forms
- Items and inventory management with MarketMan, PeachWorks and BevSpot
- Extensive, concise, and readily available documentation
- One-stop-shop: Square allows users to create their online store, process payments and manage their physical store, all in one place
- Easier and more straightforward for less technical users
Does Square accept international payments? Yes.
As you can see, both options come with their own bells and whistles at almost the same price point.
The first difference between the platforms lies within their origins. Stripe was specifically designed to process online payments, while Square was initially created to process payment in-person using their POS hardware.
This may help explain why Stripe provides a more advanced experience for online businesses by offering:
- Customizable checkouts
- Advanced integrations
- Extensive documentation about their apps, integrations, and APIs
This comes at a price, as Stripe's features can easily overwhelm non-technical adopters with all the possibilities it offers.
On the other hand, Square strikes as a better option for businesses selling on and offline.
Their selection of payment processing hardware is quite impressive (card readers, registers, terminals, stands, etc) and the platform's interface is user-friendly, ideal for "digital transformation" efforts.
To summarize, Square is a valuable choice for businesses looking to use a single platform to manage both their physical location as well as their online store, with a user-friendly interface.
In contrast, Stripe is a particularly attractive option for “online first” businesses looking to make the most out of advanced features and integrations.
Now that we’ve covered each platform and how they fare against each other, let’s get into the topic of international payments.
International payments with Stripe
Where is Stripe available
- Available for businesses in 42 countries.
- Accept payments from anywhere in the world, in 135 currencies
International fees with Stripe
Additional 1% on top of the base fee (2.9% for online processing, 2.7% in person)
Advantages of using Stripe for international payments
- Available in more countries
- Sellers can get paid in 15+ different currencies
- Sellers can take advantage of local payment platforms (such as Alipay and WeChat Pay) via integrations
International payments with Square
Where is Square available
- US, Canada, Japan, Australia, and the United Kingdom.
International fees with Square
Square only accepts payments in currencies from the aforementioned countries. Customers will have to bear the conversion costs with their bank when paying. While Square mentions that most internationally-issued cards are accepted, the topic can be slightly confusing.
Advantages of using Square for international payments
- Square works with any US-issued and most internationally-issued magstripe or chip cards bearing a Visa, MasterCard, American Express, Discover, JCB, or UnionPay logo.
As we can see, Stripe has a clear advantage when it comes to international payments.
Square is very limited outside the handful of countries where it is available, and not as competitive when it comes to international payments. Let’s take a moment to analyze why.
On the legal front, both Stripe and Square are ensuring local regulations compliance. In Europe for example, where Strong Customer Authentication (SCA) is a regulatory requirement, both platforms have taken steps to comply and ensure that both vendors and customers can conduct business legally. If you are interested in the details, please refer to Stripe and Square articles on the matter.
When it comes to partnerships, both tools offer comprehensive ecosystems for companies to add payments to their platform or develop new extensions.
Square encourages collaboration through partner programs for businesses and agencies.
Stripe, on the other hand, offers both a free and a “verified” solution, granting extra perks such as being featured in the partner gallery, and access to customer support escalation on behalf of customers.
However, Stripe clearly takes the lead for businesses interested in reaching an international audience thanks to its coverage of relevant markets.
While Square operates in 5 countries, Stripe is available in 42, including strategic ones for ecommerce: China (accounting for 42% of global ecommerce) India (a $48.5billion ecommerce sector as of 2018), Germany, Mexico, and Brazil, among others.
Alternatives to Stripe and Square around the world
While both Square and Stripe represent excellent options, the payment processing alternatives do not end with them.
Depending on your business needs, you might also want to consider the following alternatives.
PayPal is a household name, and doesn't really need an introduction. Available in over 200 countries and supporting 25 currencies, it’s one of the preferred payment methods around the world.
PayMongo is a payment gateway allowing businesses in The Philippines to process payments from debit and credit cards, e-wallets and over-the-counter transactions.
Based in India, Razorpay offers businesses the ability to accept payments through cards, wallets, APIs or UPI in 92 currencies. India-based businesses will also benefit from WooCommerce integration.
A popular payment gateway in Latin America, EBANX facilitates ecommerce transactions throughout 9 countries, with more than 100 payment methods like local cards, instalments, and voucher payments.
While only 19% of Latin Americans own credit cards, 70% are connected to the internet (source: WorldBank, via EBANX), representing a major opportunity for ecommerce businesses with the right payment processing infrastructure.
The Chinese online payment platform is part of the Alibaba group and overtook PayPal as the world's largest mobile payment platform in 2013.
It is very popular in China, allowing users to process online payments and benefit from the entire Alibaba ecosystem from purchasing through QR codes to paying for transport fares and more.
A joint venture between the leading search engine in Russia Yandex and Sberbank (Russia's largest bank), Yandex.money is an electronic payment service accepting online payments from bank cards, e-wallets, mobile phone balances, and in cash via payment kiosks.
As of today, Yandex.money stands out as the most popular payment processing platform among Russians aged 20-44.
The leading online payment solution in Latin America, Mercado Pago provides online retailers with a secure, simple, and convenient way of sending and receiving online payments using a wide variety of payment methods across multiple platforms, and solutions to pay in instalments.
It was launched in 2004 and is now available across Latin America, supporting local payment methods and boasting an efficient anti-fraud system.
As we’ve seen throughout the article, both Stripe and Square are solid options when it comes to picking an ecommerce payment gateway solution.
However, when it comes to international payments, Stripe is the clear winner.
By being available in 40+ countries and accepting 135 currencies, Stripe clearly has the edge in the international payment category. Square, on the other hand, falls a tad short as a payment gateway solution for ecommerce with an international focus. Regardless, it still provides a lot of value for businesses looking to sell online within their supported range of countries.
If you are a Stripe or Square user and want to get more out of your tool, please look at our available integrations for both platforms:
At the end of the day, what matters the most is who your audience is and how to accommodate them best. It's always good to keep in mind what international customers want. Sometimes, this goes beyond your preference and convenience, and yet it's good for business.
Now that you’ve got all the elements to choose from, it’s up to you. Let’s get selling!