Better Buy: PayPal Holdings, Inc. vs. Square

Square (NYSE: SQ) is often compared to PayPal (NASDAQ: PYPL) because it's doing for small businesses what PayPal did for online sellers 15 years ago. And based on the success of PayPal, one might think it's a no-brainer to buy up shares of Square right now and enjoy the ride. But while PayPal's already done it, turning into a cash-flow machine, Square isn't much but a lot of potential right now.

Both companies are seeking to expand their offerings right now to further establish a foothold in their respective niches. PayPal is partnering with loads of new online marketplaces and payments companies following its spinoff from eBay, and Square is working to develop new services for merchants to lock them into its ecosystem.

Investors looking to invest in the payments industry could do well with either stock, but which one makes a better buy? Let's take a closer look to figure it out.

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Source: Fool.com