Square vs Lopay: The cheaper option when taking deposits and payment links?

Read time: <span>7</span> min min

by James Redding

If you run a mobile business, market stall, or trade service, sending a payment link is often the easiest way to secure a deposit or settle a final invoice. However, when it comes to the cost of processing those remote payments, the headline rate rarely tells the whole story.

When comparing Square and Lopay for payment links, we encounter one of the most frustrating pricing models in the payments industry: The Fixed Pence Trap.

While Square advertises a seemingly low percentage rate for online payments, the reality of their pricing structure can aggressively eat into your profit margins on smaller transactions. Let's break down the hard numbers so you can protect your hard-earned cash.

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The "Fixed Pence" Trap Explained

Payment providers generally structure their fees in one of two ways: a pure flat percentage (e.g., 1.48% per transaction) or a blended rate that combines a percentage with a fixed pence fee.

For its Online Checkout and payment links, Square charges 1.4% + 25p per transaction for standard UK cards.

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To a busy merchant skimming a pricing page, "1.4%" sounds like a fantastic deal. It looks cheaper than many flat-rate competitors. However, that fixed 25p is the catch. If you are sending out invoices for thousands of pounds, 25p is negligible. But if you take smaller deposits to secure a booking or send invoices for lower-value services (like a £15 mobile beauty deposit, a dog walking fee, or a quick £50 call-out charge), that 25p acts as a massive hidden tax on your income.

Lopay takes a transparent, pure percentage approach. For a next-day payout, Lopay's total fee for a payment link is a flat 1.48% (comprising the standard rate plus a small remote processing surcharge). There is no hidden fee.

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Square vs Lopay fee comparison

Deposit / invoice size	Square fee (1.4% + 25p)	Lopay fee (1.48% flat)	Who wins?
£15e.g., Salon Booking	46pEffective rate of 3.06%	22p	Lopay — less than half the price
£50e.g., Service Call-out	95pEffective rate of 1.9%	74p	Lopay
£150e.g., Day Rate Deposit	£2.35Effective rate of 1.56%	£2.22	Lopay
£500e.g., Materials Deposit	£7.25	£7.40	Square — barely edges ahead

£15

e.g., Salon Booking

Square fee46pEffective rate of 3.06%

Lopay fee22p

Who wins?Lopay — less than half the price

£50

e.g., Service Call-out

Square fee95pEffective rate of 1.9%

Lopay fee74p

Who wins?Lopay

£150

e.g., Day Rate Deposit

Square fee£2.35Effective rate of 1.56%

Lopay fee£2.22

Who wins?Lopay

£500

e.g., Materials Deposit

Square fee£7.25

Lopay fee£7.40

Who wins?Square — barely edges ahead

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Note: If you opt for Lopay's Weekly Essential account (1.28% total for links), a £500 deposit costs just £6.40, beating Square entirely.

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The Takeaway:

Unless you exclusively send high-value invoices (well over £300 each), Square's fixed pence fee makes them significantly more expensive than Lopay for everyday deposits and remote payments. For micro-deposits, Square's effective rate spikes to over 3%, heavily penalising small business owners.

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The Premium Card Penalty

We also have to look at the edge cases: what happens when your customer pays via a payment link using an international card, an American Express, or a corporate business card?

These premium cards charge higher interchange rates, and both providers adjust their fees accordingly:

• Square: For any non-UK card processed via an online payment link, Square's fee jumps to 2.5% + 25p.

• Lopay: Adds a transparent +1.00% surcharge for premium/international cards.

If you take a £50 deposit from an international tourist using Square, you will pay £1.50 in fees. With Lopay's Next-Day Standard account, you will pay £1.24. Once again, the 25p fixed fee drags Square's competitiveness down for everyday transactions.

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Which is Better for Your Business?

Your payment provider should give you a rate that scales fairly with your business, whether you are taking a £10 deposit to stop a no-show or a £1,000 final payment for a completed job.

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Choose Square if:

• Your business model relies exclusively on sending massive, high-value invoices (typically £300+) where the 25p fixed fee becomes mathematically irrelevant.

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Choose Lopay if:

• You regularly take smaller upfront deposits (£15 to £100) for trade call-outs, salon bookings, or bespoke orders.

• You want a pure percentage rate that doesn't artificially inflate into a 3%+ fee on your smaller invoices.

• You want the flexibility to lower your rates even further (down to 1.28%) by choosing a weekly payout schedule, securing the lowest possible cost for remote payments.

By choosing a provider without fixed pence traps, you ensure that you aren't being quietly penalised for protecting your calendar with booking deposits.

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