Editor’s Note: This blog has been updated with new information about Squarespace’s pricing for digital products.

Squarespace recently introduced a new tool to their website builder, Squarespace Payments. Squarespace Payments is a payment processor that accepts debit and credit charges for products and services on e-commerce websites made on Squarespace. Squarespace Payments is set to replace Stripe on all websites and has already started rolling out on new trials as of December 2023.

Note: You will not get to choose which option (Squarespace Payments or Stripe) is available on your website. While Stripe payments will continue to go through on sites where it was already connected, ALL new websites will offer only Squarespace Payments.

Before Squarespace Payments, Squarespace’s website admins had to sign up with Stripe and/or PayPal, third-party payment processors, to manage their stores. Now, Squarespace hopes to eliminate that extra step by designing its own in-house payment processing tool built directly into the platform.

Squarespace Payments is a change to the status quo for anyone with an e-commerce website on Squarespace. So, to prepare for the new normal, let’s dive into the ins and outs of Squarespace Payments and show you what to expect from this new tool.

Squarespace Payments: The Basics

Now that you know what Squarespace Payments is, let’s look at some of its basic features and functions.

Where You Can Use Squarespace Payments

Squarespace Payments works for most of the platform’s e-commerce and product pages, including these common features:

Shopping Pages
Course and Video Pages
Subscription Services
Members-Only Pages
Donations Pages

You can use Squarespace Payments for pretty much any of Squarespace’s integrated commerce features, including ones not listed above.

Accepted Payment Types

Squarespace Payments takes most major payment methods, including:

Visa
Mastercard
Discover
Apple Pay
Diners Club
Union Pay
American Express

Squarespace Payments also accepts charges through Afterpay (also called Clearpay in the United Kingdom), a lending service that lets shoppers pay for goods and services through small monthly installments rather than as a one-time payment. If one of your customers uses Afterpay, you will still receive your full payment all at once, despite the shopper not initially covering their entire bill.

Security and Support Features

Squarespace Payments uses PCI compliance, risk monitoring on all payments, data encryption, and more to keep transactions secure for your clients. Squarespace also has a 24/7 support team if you experience issues with your account’s security or functionality.

How To Set Up Squarespace Payments

Only people who own or administrate an active Squarespace account can enroll in Squarespace Payments. Additionally, you can only use one Squarespace Payments account per website. So, if you’re running multiple websites with e-commerce features, you’ll need to create a different account for each. To verify your Squarespace Payments account, you’ll need to provide the following information:

Your name, date of birth, contact information, and social security number
Your job title and the industry your business operates in
Your business’s name, contact information, and online URL
Your taxpayer identification number and employer identification number
Contact information for your customer support line

Once you’ve set up your Squarespace Payments account, you must link it to an active bank account to receive payments. For this, all you have to do is hit the ‘Connect Bank’ tab on the Store Payments page and follow the prompts.

Though Squarespace Payments isn’t currently available everywhere, Squarespace plans to roll the feature out to more markets beginning in 2024. You will receive a notification from Squarespace once you’re permitted to use Squarespace Payments.

How Squarespace Payments Affects Stripe and PayPal Users

Before Squarespace Payments launched, website administrators had to use either Stripe or PayPal for their paid transactions. But now that their payment processor is live, Squarespace plans to use it to replace specifically Stripe. Going forward, you must use Squarespace Payments to see transactions on your payment dashboard.

If you have any recurring customers that pay with Stripe, Squarespace will continue billing them with that third-party platform, but the charges will show up as a detached state. Squarespace will still let users accept new payments via PayPal for now, though you will have to link a PayPal Business account to your Squarespace website, which you can read how to do here.

Prohibited Products and Services on Squarespace Payments

Squarespace Payments is reasonably open-ended on what you and your customers can use it for. However, Squarespace does restrict what types of goods and services you can use their payment processor for.

Most of the prohibited items and services are self-explanatory, like goods that are illegal or unauthorized in some states, such as drug products, gambling services, and specific types of firearms and explosives. But there are a few less obvious restrictions as well, including:

Adult Content
Any Content Deemed ‘Misleading’ or ‘Predatory’ by Squarespace (pyramid schemes, misleading investment offers, etc.)
Shops Selling Products or Content Infringing on Copyright, Trademark, or Patent Law

Squarespace Payments Fees and Taxes

One downside to Squarespace Payments is that it charges a processing and transaction fee for every purchase your customers make. While the processing fee is a constant 30 cents plus 2.9% of the purchase price, your transaction fees will vary depending on the products you’re selling and the billing plan attached to your website. For example, if your website is on a Squarespace Commerce plan, whether it's Basic or Advanced, you won’t have to pay any transaction fees. But if you’re on a Business plan, you’ll have to pay a 3% transaction fee every time your customers purchase something.

Those transaction fees are just for physical sales and service products. There are separate billing details for digital sales, like courses and membership subscriptions, which we’ve laid out below:

Without a Digital Products Subscription: 9% Transaction Fee
Starter Subscription: 7% Transaction Fee
Core Subscription: 3% Transaction Fee
Pro Subscription: No Transaction Fees

As of 2024, Squarespace has altered its pricing for Member Areas, Courses, and similar add-ons and is now selling them as part of an all-inclusive subscription which covers "digital products.” Read here to learn more about how Digital Products on Squarespace work.

Of course, you’ll have to pay taxes if you’re selling products from an e-commerce shop. So, toward the beginning of the new calendar year, Squarespace will send a 1099-K form to any website administrator that generates over $600 in sales on Squarespace Payments.

Advanced tax features

Squarespace uses the extension TaxJar, a cloud-based sales tax compliance tool, to give Squarespace Payments users a few handy tax tools to make managing their shop easier, including:

Tax Calculator: Using TaxJar, Squarespace can calcluate how much sales tax your customers owe based on their purchase and the state they’re shopping from.
Filing/Reporting Tools: TaxJar can also track all your sales and automatically file and report your sales tax. However, you will need a TaxJar Professional Plan for this feature, which is only available in the United States.

Final Thoughts On Squarespace Payments

In its current form, Squarespace Payments seems like a fairly equivalent replacement for Stripe. The biggest downside to using ANY payment processor to do commerce transactions on Squarespace is the fees attached to processing and transactions on lesser plans. Still, you can lessen or negate those costs with a higher-priced subscription while accessing the advanced features attached to those more expensive plans.