The Bottom Line: Square is a financial services, merchant services aggregator, and mobile payment that helps millions of sellers run their business-from secure credit card processing to point of sale solutions.
Best Payment Processor
AT A GLANCE
- Accept payments quickly
- Fast payment transfers
- Low transaction fees
- Outstanding customer support
Rated the best payment processor for small businesses
Pros & Cons
Whether your business is large or small, you want a payment processing system that’s affordable and reliable.
You want a system that’s intuitive and quick to set up, so you can dive right into growing your business — without worrying about complications slowing you down.
Let me introduce you to Square — one of the most popular payment processing systems on the market.
Even if you’ve never used Square yourself, you’ve probably swiped your card at one of the millions of businesses that use it around the globe.
Read on as we give you the 411 on Square — what it is, how it works, and how to decide if it’s the right payment processing system for your business.
Service: Payment processing solutions
Transaction Fees: 2.6% + 10¢
Promotion: Get a free Square reader
What Is Square?
Square is a payment processing company most known for its signature card reader — the one that plugs into your phone and allows you to accept card payments on the go.
But the company is so much more than that.
What started as a small business in 2009 has blossomed into an industry giant that offers payment processing, point of sale (POS) systems, e-commerce solutions, payroll management, marketing, and more.
Square is headquartered in San Francisco, California but has office locations in Canada, Japan, Australia, United Kingdom, and Ireland.
What Services Does Square Offer?
Square offers three main services: payment processing, POS systems, and e-commerce integrations. Let’s take a look at each.
Square Payments allows you to quickly and painlessly receive payments wherever you are — whether in-person or online.
If you run an in-person business, Square has an entire suite of payment processing devices, including card readers and tablets.
Or, you can use your own mobile phone or computer as long as it meets the software’s system requirements.
Square Payments also has an invoicing feature, which gives you the ability to create, customize, and send invoices.
That way you can digitally request payments from contractors or customers.
For appointment-based business, you can use Square Appointments to collect prepayments and virtually consult with clients.
Square sells a robust range of point of sale software and hardware.
Square has four POS software systems — each designed for a specific type of merchant:
Each software is fully customizable and has everything you need to run your business.
You can process payments, manage inventory, and keep track of your employees’ payroll all in one convenient location.
Square POS Hardware
Square designs and builds its own hardware in-house.
You have the option to bring your own devices as long as they’re compatible with Square’s software.
Or, you can buy your hardware directly from Square.
The company has no shortage of equipment.
They sell card readers, stands, terminals, registers, hardware kits, barcode scanners, accessories, and more.
This comprehensive list of hardware allows you to choose a combination of devices perfectly suited to your business’s needs.
Here’s a rundown of Square’s most popular hardware offerings:
Square Reader (Magstripe)
Square Reader (Contactless & Chip)
Plugs into the Lightning connector or headphone jack on your device
NFC reader that accepts chip cards, Apple Pay, and Google Pay
POS for brick and mortar store
All-in-one credit card machine
Portable magstripe payments
Portable contactless, chip & digital wallet payments
Contactless and chip payments in a physical store
Accepting payments and printing receipts
$10 (first one is free)
If you run an e-commerce business, you’ll find Square’s offerings especially attractive.
First off, you can build a free online store with Square that enables you to sell your products and services and track your inventory in real-time.
If you already have your own website, you can connect Square to it in minutes — without having to do any coding.
Square integrates with popular e-commerce providers such as Magento, BigCommerce, WooCommerce, GoDaddy, Wix, OpenCart, and more.
There are also developer APIs if you’re interested in a custom solution.
Last up on the list of e-commerce features is the Square Photo Studio.
What is this exactly? You can ship your products to Square, and they’ll shoot three high-resolution photos to use on your website and across social media.
You’ll pay $9.95 per product and get your photos within 14 days (you download them from a secure portal).
Here’s a sample of the type of photos you can expect to get:
Pricing & Fees
Unlike other payment processing companies, you’re not locked into a contract when you use Square.
You pay a flat fee for transactions (plus a potential monthly fee depending on which software you choose).
Use the table below to see how much you could pay based on the POS software you choose:
Square Point of Sale
2.6% + 10¢
Square for Restaurants
First POS: $60/month
Additional POS: $40/month
2.6% + 10¢
2–5 employees: $50/month
6–10 employees: $90/month
Individuals: 2.6% + 10¢
2–5 employees: 2.5% + 10¢
6–10 employees: 2.5% + 10¢
Manually keyed-in or card on file payments: 3.5% + 15¢
Square for Retail
$60/month per location
Tapped, dipped & swiped cards: 2.5% + 10¢
Manually keyed-in, card on file & virtual terminal payments: 3.5% + 15¢
Note: This table doesn’t include hardware costs, which will vary depending on your company’s needs.
Square also has the following add-on features you can buy:
$29 + $5/employee
Starts at $45/month
Physical gift cards
Starts at 80¢ a card
0 to 500 contacts: $15/month
501 to 1,000 contacts: $25/month
1,001 to 2,000 contacts: $35/month
Small credit card reader, big possibilities.
Who Is Square Best For?
Square is a great option for businesses looking for a one-stop-shop merchant services company that offers POS systems, payment processing, e-commerce services, and more.
It only takes a few minutes to set up your account and your first magstripe card reader is free.
While Square accepts almost anyone who applies, it may not be ideal for high-risk businesses.
If you have routine mishaps, the company could put a hold on transactions or close your account.
That said, read the fine print to learn what steps you should take to keep your account in good standing before you get started.
What Do Customers Say About Square?
As of May 2020, Square has amassed a stellar 4.5 out of 5-star rating on Trustpilot based on 1,882 reviews.
It’s Better Business Bureau (BBB) rating shows a stark contrast as the company has over 3,000 complaints.
Here are a few recent customer reviews:
So, why do these two sites show such contradictory ratings?
Most complaints on the BBB are about Square’s Cash app.
It’s a peer-to-peer payment service that lets you transfer money through your bank using your debit card.
Most users buy and sell Bitcoin through the app, but have run into snags with declined transactions and poor customer service.
After reading through several complaints, most have nothing with Square’s main offerings, which we discuss in this review.
When we look at Trustpilot reviews, customers love how easy it is to get started with Square.
The signup process is simple and efficient, and the customer service team is quick to help should you need it.
Now that we’ve done a deep-dive into Square’s fees and services, let’s talk about a few added bonuses that set this company apart from the competition.
One thing customers love about Square is that there are no hidden fees. You know exactly how much you’ll pay per transaction (or per month if you choose a POS software for restaurants, retail, or appointments).
You’re not locked into any contract with Square, so you can easily switch things up if you’re not satisfied with their services. They make the entire process so simple. There’s really no reason not to give it a try.
Are you selling any big-ticket items?
With Square Installments, customers can break large purchases up into small monthly payments. You get paid upfront. But they get the flexibility of paying overtime. It’s a win-win.
Depending on the type of business you have, you may sell products and services online and in-person.
Square makes it easy to sync your inventory across all platforms, so you always know how much product you have left.
The Square Card gives you immediate access to your money — which means no more waiting on bank transfers. It’s a Mastercard debit card, so you can use it in-stores, online, and at ATMs nationwide.
As an added bonus, you get a 2.75% discount when you use your debit card to support other Square businesses.
The Square Card has absolutely no fees, so you’ll never get dinged for overdrafts, monthly maintenance, low balances, and so on. But the ATM operator may still charge you a fee for not being in its network.
Who doesn’t love a good loyalty program that rewards you for coming back time and time again?
With Square’s loyalty program integration, you can set up a rewards system or allow customers to buy gift cards for friends and family.
The Card On File feature is for businesses that want to give regular customers a better checkout experience.
This feature lets you safely and securely store your customer’s card information, so you can complete future orders with the tap of a button.
Once a payment is complete, the customer gets a digital receipt sent straight to their inbox. If they no longer want their card info on file, all they have to do is unlink it from their receipt.
As a Square customer, you can create an online store that supports curbside pickup and local delivery and allows you to sell on Instagram and Facebook.
The basic online store has no monthly fee. The only time you’ll pay is when you make a sale.
But Square also offers three paid plans for those who want access to advanced features. Some of these features include a custom domain, a website with no Square branding, a web page for customer reviews, abandoned cart emails, lower transaction fees, and a real-time shipping rate calculator.
Online Store Pricing & Fees
Here’s a rundown of the price and features that come with each online store plan (in case you’re thinking you want more than just the basic site).
Per Transaction Fee
Those just starting out
2.9% + 30¢
- Automated inventory
- Integration with Instagram & Pinterest
- Online shopping cart
Those who want a custom domain
2.9% + 30¢
Everything in Free plan, plus:
- Custom domain (free for first
- No Square branding or ads
Those who want integrated e-commerce features
2.9% + 30¢
Everything in Professional plan, plus:
- Webpage for customer reviews
- Discounted shipping labels
- Abandoned cart emails
Those who want discounted fees and low rates
2.6% + 30¢
Everything in Performance plan, plus:
- Discounted transaction fees
- Higher discount on shipping rates
- Real-time shipping rate calculator
How Do I Get Started With Square?
You can sign up for Square online following these simple steps. It only takes a few minutes:
Enter your email, create your password, and click Continue.
Select the type of features you’re looking for and click Continue.
Select your merchant and business type and click Continue.
Select where you’ll take payments and click Continue.
Select any extra features you’d like access to and click Continue.
Enter your personal information, including your name (or business name), address, Social Security number (or EIN) and phone number, and click Continue.
Square is arguably the most popular payment system available today.
What started as a small company in 2009 has now blossomed into a full-fledged merchant services company.
Whether you’re simply looking for an easy way to accept payment on the go or are looking for a comprehensive POS solution that lets you manage payroll, send invoices, track inventory, and more — Square may be just what you’re looking for.
The best part?
The company doesn’t lock you into a contract, so there’s no harm in trying it out.
If you don’t like the platform after using it for a while, you can switch to another one — no strings attached.
But we’re thinking you’ll like Square’s straightforward pricing and user-friendly payment solutions.
Have questions about Square we didn’t answer? Drop them in the comments below.
Square is a financial services, merchant services aggregator, and mobile payment that helps millions of sellers run their business-from secure credit card processing to point of sale solutions.
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I’m Cassidy Horton, a personal finance freelance copywriter. I craft action-worthy content for financial services companies. My #1 goal is helping people break the paycheck-to-paycheck cycle and experience financial freedom.