Square Review

That deal didn’t work out very well for Square (who lost millions of dollars because of the way that small transactions are processed) but the company has rebounded by ending their contract with Starbucks, and going public in autumn of 2015. That’s a lot of publicity that won’t necessarily help you figure out if you should use Square, also known as SquareUp. But we can help with that. In this Square review, we’ll tell you everything you need to know about Square’s rates and fees, contract, customer reviews, instant deposit, POS systems, and other information to help you decide if it’s the right fit for your business.

Square’s History

Square was founded in 2009 by Jack Dorsey, who is also a founder and current CEO of Twitter. Square is not strictly a payment processor, but an aggregator. This means that Square processes transactions for all its customers under one merchant account in its own name. Square offers this video about its services:

Square uses Chase Paymentech to process its transactions.

What services does Square offer?

While originally only offering in-person (card-present) payment processing through smartphones or tablets, Square has grown its offerings in the last several years, now providing an ala carte style selection of products and services. Currrently, Square offers:

Square Payments, allowing you to accept credit cards in-person, online, or through an invoice.
Square Payroll, a limited-availability payroll option
Square Appointments, a feature to allow for booking client appointments
Square for Retail, a POS module that offers advanced retail functions
Square for Restaurants, a POS module that offers advanced restaurant functions
Square Capital, a cash advance service

The original Square Payments service does not have a monthly fee - you pay only when accepting credit cards. However, all of Square's other services incur monthly fees. These costs are detailed later in this review. Additionally, Square integrates with accounting programs QuickBooks and Xero, so there’s no need to switch if you already use one of those programs and would prefer to continue. Square also offers a broader range of equipment than in the past, which we'll discuss at length in the Equipment section.

Payment Processing

At the most basic level, Square offers payment processing to small businesses. With Square, you can take Visa, MasterCard, Discover, and American Express. Funds are deposited to your bank account in 1-2 business days, unless you choose another option like instant deposit for an additional fee. You’ll need to download the free Square app, purchase a module such as Square for Retail / Square for Restaurants, or utilize Square’s ecommerce option to use Square for payment processing. The payment app is available for both Android and Apple devices, so you can use whichever you prefer. The Square ecommerce option allows you to enable payments on your website. Note that Square (full name Squareup) is not affiliated with Squarespace, the website creation service. Square also offers a virtual terminal, which allows you to handkey credit card information into a secure form on your website. The virtual terminal has higher pricing than swiping or ecommerce, and will cost you 3.5% + 15 cents per transaction.

Invoicing

You can choose to send invoices to your clients right from the Square app. It’s free to send invoices, and you’ll pay 2.9% + 30 cents when your client pays the bill. (There’s no charge to your clients to pay.) If you need a physical copy of the invoice, you can print them, too. Best of all, invoices sync with your Square Dashboard so you can tell at a glance which invoices have been paid and which are outstanding.

Gift Card Services

If you want to take advantage of the popularity of gift cards, Square has several choices. You can try starter packs and choose from templates, or design your own card. Different package options have different minimum quantity requirements. All gift card choices come with full reporting so you can see how effective gift cards are for your business. Cards will run you between $1.50 and $2 per card depending on your customization and other design choices. Alternately, you can use the digital gift card option, which does not provide customers with a physical card.

Square Payroll (limited availability)

As of 2018, Square’s Payroll option is available in 32 states. Square expects to continue to add payroll support for more states in the future.

Square boasts a payroll option with an integrated time clock that automatically imports staff hours for online time management and tracks sick and paid vacation time. Additionally, Square handles federal and state tax requirements, including withholding and reporting, as well as generating W-2s for your team. Your employees can set up their own direct deposit for their checks and view pay stubs online. Payroll has a separate charge of $29/month plus $5 per employee that is paid in that month. Businesses that pay only contractors are eligible for no monthly fee and $5 per contractor per month.

Square Appointments with No-Show Protection

Square offers an online booking services - called Square Appointments - to let your clients conveniently book services from their computer or smartphone. You can enable prepayment, set reminders to reduce no-shows, and sync with your Google calendar for up-to-date availability and scheduling. Appointments offers unlimited bookings and an embeddable widget for booking. Additionally, you can choose to implement a cancellation or no-show fee. Called "no-show protection," enabling the service will generate a cancellation policy that customers must agree to when booking their appointment.

Square no show protection

However, it’s worth mentioning that customers who are charged cancellation or no-show fees are often known to initiate chargebacks. On the upside, Square has confirmed to CardFellow that its policy of covering up to $250/month in chargebacks would apply to any chargebacks incurred through the no-show penalty. Businesses can also expect assistance from Square’s Disputes Team as well as information in your Square dashboard to help in the event of a chargeback. Note that Square Appointments costs extra unless you're a single practitioner. Current rates:

$50/month and 2.5% + 10 cents per transaction for businesses with 2-5 staff members
$90/month and 2.5% + 10 cents per transaction for up to 10 staff members.

Businesses with more than 10 employees will need to contact Square for custom pricing.

Square CBD Credit Card Processing

In autumn 2019, Square announced that it would begin supporting CBD sales. While the rates are higher, it offers CBD sellers a solution for accepting credit cards online or in-person. Many CBD sellers have complained about the difficulty of securing a merchant account, as many traditional processors have been unable or unwilling to serve the CBD market due to uncertainty about legality and other considerations.

Square-CBD-pricing-chart

Current rates for Square CBD processing are as follows:

In-person (swiped) transactions: 3.9% + 10 cents
Online transactions: 4.2% + 30 cents
Keyed or card on file transactions: 4.8% + 15 cents

Pricing subject to change at Square's discretion. Volume discounts may be available for larger businesses.

Square Installments

In autumn 2018, Square launched Installments, a feature that lets you charge customers for large purchases in smaller “installment” payments. Installments is part of Square Capital, the service that provides cash advances to businesses. The feature is similar to Affirm installment purchases. You can offer installment payments for in-person purchases or with Square Invoices.

Square Installements

With Installments, Square pays your business the full amount of the purchase up front. That means you’re not the one waiting for monthly payments from the purchaser, Square is. Essentially, customers take a loan from Square, which they will repay over 3, 6, or 12 months, depending on their preference. For customers, APR ranges from 0% to 24% and loans are available in mounts from $250 to $10,000. As a loan, Square Installments will show up on customers’ credit reports. Cardholders must secure pre-approval from Square before they can purchase. They’ll complete the process on their phone rather than filling out paperwork in store. If approved, customers receive a one-time-use credit card number that they will provide to your business in order to pay. Incidentally, the one-time-use card means you’ll need to key enter the payment, which comes with a higher rate than your swiped transactions. You’ll pay 3.5% + 15 cents using your point of sale system or virtual terminal, and 2.9% + 30 cents if you offer Installments through an invoice. Currently, Installments is available in 22 states: Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Kentucky, Louisiana, Massachusetts, Michigan, North Carolina, New Jersey, New York, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia, and Washington.

Square for Retail

In 2017, Square introduced its Square for Retail software for the POS system, which offers more robust functionality than it’s basic register app. The basic register app (called Square Point of Sale) lets you take payments track sales, add inventory, and send invoices. At this time, Square has not announced any plans to discontinue Square Point of Sale in favor of Square for Retail. Square offers this video about the Retail option:

Features

It offers inventory management capabilities with the option to create and submit purchase orders to vendors, as well as track or transfer items between multiple locations. You can create customer profiles to keep track of purchase history, add notes about customer preferences, group customers into categories, and create targeted marketing for different customers. Additionally, you can use an integrated timecard system, see labor costs to create schedules that most effectively utilize your staff, and set employee permissions for accessing functions in the app. Square for Retail is only compatible with iOS devices, so you will not be able to use it with Android or Windows systems. Square provides a table with a full list of differences between the basic Square Point of Sale and the Square for Retail software. On Square’s website, testimonials about Square for Retail praise the app as a reliable solution that makes it easy to manage sales, inventory, purchase orders, and more.

Square for Retail Pricing

Using Square for Retail will cost you $60 per month for the first register and $20 per month for each additional register. You'll also pay 2.5% + 10 cents per transaction for swiped, dipped, or tapped cards. Square offers a free 30-day trial of the retail app, but processing fees still apply during the free trial. If your business has annual sales of more than $250,000 and an average transaction size over $15, Square may be able to offer custom pricing.

Square for Restaurants

In spring 2018, Square announced new POS software called Square for Restaurants. The solution aims to fill the gaps in the current system by offering functions that specifically appeal to restaurants. Square offers this intro video about the Restaurants module:

Features

Square for Restaurants gives you several new functions important for food service businesses, including customizable table layouts, course-based ordering with “hold” and “fire” ticket options, and the ability to set multiple menus, such as separate lunch and dinner menus, or custom menus for lounge/bar seating vs. the dining room. Square for Restaurants also offers tabs, automatic gratuities, and the ability to split checks as well. You can set discounts for sales such as happy hour, and easily process refunds of item voids. You can also take advantage of existing Square options such as payroll, loyalty programs, and Square capital. (These services incur additional fees.) Square for Restaurants offers reporting for both basic business reports (such as sales and labor reports) and restaurant-specific reports, including comp and void reports or modifier sales. If you need assistance, Square offers a restaurant-specific custom implementation with options for on-site training and assistance setting up menus, floorplans, and more. Training packages start at $600. Additionally, Square offers restaurant-specific POS bundles that include iPad stands, cash drawers, and kitchen printers. You can choose from countertop or wall-mount stands.

Square wall mount POS

Square for Restaurants Pricing

Square for Restaurants will run you $60/month for your first station and $40/month for each additional station. If you choose the custom installation and training, you'll pay the one-time training fees starting at $600. You’ll pay 2.6% + 10 cents per transaction to accept credit cards. (Rate applies to swiped/dipped/tapped cards only.) Square may also negotiate custom rates for larger clients. Square provides a guideline of annual revenue exceeding $250,000 and an average ticket greater than $15 for custom rates. Is this pricing competitive for your business? Check now with CardFellow’s free price comparison tool.

Square Instant Deposit

While the typical timeframe for receiving your funds is 1-2 business days, if you’re willing to pay a little extra and link a debit card, you can use Square Instant Deposit and get your money immediately, even on weekends and holidays. Instant deposit costs 1% of the deposit amount. This fee is in addition to the processing fees Square charges. The minimum deposit amount is $50 (after fees), with a maximum of $2,500 per deposit. However, there is no limit to the number of instant deposits you can make. (Note that new sellers may be limited to $500 per day in instant deposits until they’ve established a selling history with Square.) Instant Deposit is not available for transactions made through the Square virtual terminal.

Square Scheduled Deposit

The Scheduled Depost option lets you choose to receive funds automatically at the end of the business day. Square Scheduled Deposit funding also incurs a 1% fee of the total transaction.

Do I need to buy equipment?

Maybe. The basic Square payments app is free, and can be used on current smartphones and tablets, but if you need a mobile card reader or a want to use Square Stand POS or Square Register POS, you’ll need to pay for it. Square sells equipment for different needs. In the last several years, Square has expanded its equipment offerings. You can choose from:

The original magstripe-only headphone jack card reader
A combo magstripe/EMV headphone jack reader
A combo contactless (NFC) and EMV reader for POS
The basic POS system, called the Square Stand
The full POS system, the Square Register

Square also offers POS system bundles that include iPad stands, cash drawers, and receipt printers. The traditional magnetic stripe reader is one of the most well-known Square devices. The small white reader connects to smartphones through a standard headphone jack. The reader is free, and you can use it with Android and Apple devices, but remember it does NOT take contactless payments (like Apple Pay) or new EMV chip cards. For chip cards, Square offers a magstripe/EMV combo reader or an EMV/NFC reader (no magstripe option.) That reader currently costs $49. (Pricing subject to change.) Another popular Square device is the Square Stand (pictured below), which holds an iPad that uses the Square app or the Square for Retail or Square for Restaurants software. The Square Stand doesn’t include an iPad and costs $169 for the model that includes options to take EMV chip cards and NFC (contactless) payments.

Square Stand

The newest Square equipment option is the Square Register POS system (pictured below), an integrated hardware/software bundle that features 2 screens - one customer-facing and one employee-facing. The customer facing screen includes built-in card readers so customers can swipe/dip their cards themselves rather than hand them over to staff.

Square Register

The Square headphone jack readers can be used with both Android and Apple devices, but the Square POS systems use iPads. Square POS bundles start around $1,000.

Square Rates and Fees - What will it really cost?

The answer to this has gotten more complex as Square introduces more ala carte services with added fees. As Square has added features, it has also begun imposing monthly fees for those features separately. For example, payroll is one monthly fee, appointments is another, instant deposit is another, etc. So what you’ll actually end up paying also depends on which features (if any) you add on. To further complicate matters, pricing for accepting credit cards depends on whether you're using the basic payments app or the Square for Retail or Restaurant software. At the most basic level, Square Payments uses a flat rate percentage for processing, except for businesses with average transaction totals under $10 who sign up with assistance from Square. Square’s rate is currently 2.6% + 10 cents on swiped transactions when you use the Square mobile readers or the Square Stand POS system. You’ll pay 2.5% + 10 cents per transaction for swiped transactions when you use the Square Register POS system. Businesses choosing Square for Retail will pay $60/month for the first register and 2.5% + 10 cents per swiped transaction. (Additional registers incur a $20/month fee per register.) If you opt for Square for Restaurants, you'll pay $60/month for the first register and 2.6% + 10 cents per swiped transaction. (Additional registers incur a $40/month fee per register.) Note that the monthly fee for Square for Retail and Square for Restaurants is NOT for the purchase or lease of the equipment. This is an ongoing monthly fee in addition to the cost of purchasing or renting equipment. Square Stands start at $169 while the Register POS starts at $999. No matter how you take payments, you’ll pay 3.5% and $0.15 per transaction for keyed transactions. It will cost you 2.9% and $0.30 per transaction for ecommerce payments. Fees for add-on services will apply if you choose those services. Square also offers custom setup support and training starting at $600.

Square-pricing-2019

Square extra services pricing

Depending on your transaction volume and other details, Square's pricing could be a great deal or very expensive. In our article Square: Process for Free, Just Like Starbucks, we detailed circumstances in which Square could be beneficial. Primarily, it applied to transactions under $10. However, now that Square has implemented a per-transaction fee for transactions under $10 for some customers, the competitive pricing advantage has been removed.

Is Square Adding a Transaction Fee?

We've known for a long time that Square has been imposing a transaction fee on businesses where it loses money on small transactions, but lately we've been hearing that Square notified businesses it will be adding a per-transaction fee of 5 - 10 cents as of November 1, 2019.

At the time of this update, we have not received confirmation from Square on whether the fee applies to all customers or only to select customers.

We have also written about Square losing money on certain transactions. If Square's flat charge doesn't cover the costs of interchange and assessments, the company loses money. The introduction of per-transaction fees is an attempt to plug this money leak. As such, it's possible that Square will only add the transaction fee to businesses that otherwise pay less than Square's costs. However, it's also possible that Square is moving away from the flat rate with no transaction fee.

Have you received notification from Square that your pricing is changing? Let us know!

In any event, it's worth your time to compare processors. You can do that quickly (in under 5 minutes) by using our quote comparison tool. The last thing you want is to be the business that’s overpaying, meaning you’re subsidizing another business’s processing.

Is there a contract?

Square doesn’t require long-term contracts, but as always be sure to read anything before you sign it to make sure you know what you’re getting into.

How’s customer service?

One major caveat is that Square does not provide a customer support phone number until you sign up. I know, it’s a little weird. But the company doesn’t seem to want to encourage phone calls, and makes it very difficult to reach anyone by phone. It’s a common complaint from customers. Square says that current customers can get a code that will enable them to contact Square by phone, but the extra hoops can be annoying. How else can you get in touch with Square? They offer email support. But remember, if you have a major problem, you probably won’t be able to pick up the phone and get a quick answer. If that’s important to you, Square may not be your best choice.

What about security and fraud prevention?

Square takes security seriously, and uses encryption and tokenization technologies to keep your customers’ data safe. Square also monitors transactions for suspicious behavior just in case, and can respond to potentially fraudulent transactions quickly. Additionally, you’ll have chargeback protection of up to $250 per month.

News

February 2016 -- Square went public in 2015, and stock prices haven’t been doing as well as experts expected. In February 2016, Visa disclosed its stock ownership in Square in an SEC filing, causing Square’s stock to jump and some journalists to predict that Visa would buy Square. However, Visa’s stake in Square was misconstrued, and there have not been any announcements to indicate Visa will purchase Square. April 2016 -- A professor at Washington University has filed a lawsuit against Square, alleging that he was the original and sole inventor of the infamous Square dongle. The professor, Robert Morley, claims that he was approached by the cofounders of Square for assistance creating an option for processing payments by taking a photo of the credit card. According to Morley, he instead created the headphone jack card reader that Square is known for. A judge has denied Square’s motion to dismiss the case. August 2016 -- Square has partnered with Vend and TouchBistro, offering its credit card processing services to customers who prefer to use the more robust Vend or TouchBistro POS systems. August 2017 -- Square opened a physical store in New York to serve as a tech support center and retail store for testing and purchasing new Square products. The store is in an initial trial phase with limited hours. September 2017 - Square filed an application to become an "industrial loan company." October 2017 -- Adding to its equipment choices, Square announced the Square Register, an integrated POS system. April 2018 -- Square announced that it will purchase Weebly, a service that creates online stores for businesses. Square had already offered payment processing to Weebly customers, as did PayPal and Stripe. (For the time being, all of those payment options will still be available. For Square, the acquisition hints at a desire to grow its presence in online transactions and in international payments, as many Weebly customers are overseas. May 2018 -- Square announced a new offering for the food and beverage industry called Square for Restaurants. Autumn 2019 -- 2.75% flat rate eliminated. Square announced new pricing of 2.6% + 10 cents, replacing the 2.75% flat rate. Autumn 2019 -- Square announced support for CBD sales, with separate CBD pricing.

Banking Application and Withdrawal

Square has withdrawn its application to become a bank after filing an initial request to become an Industrial Loan Company (ILC) in September, 2017. However, the company’s name no longer is on the list of pending new bank applications, according to The American Banker. A company representative confirmed that Square plans to refile its application at a later date. The spokesman also said that Square intends to “bolster its application” prior to refiling. “We have been engaged in constructive dialogue with the FDIC, and our decision to withdraw and refile was a procedural step in the review process that will allow us to amend and strengthen some areas of our FDIC insurance application,” the spokesperson said in a statement. The application with the Utah Department of Financial Institutions is still active, according to the Square representative. ILC charters are controversial within the banking community, and the FDIC has not approved an ILC application by a company in the past decade. Industry representatives feel an ILC falls between the commerce and banking cracks. When Walmart filed such an application in 2005, industry backlash was so fierce that the company withdrew its application. In Square’s case, the Independent Community Bankers of America informed the FDIC shortly after the application was announced that it opposed Square’s application and wanted Congress to “permanently close the ILC legal loophole before it is too late and we have huge commercial or technology firms like Amazon, Google or Walmart owning FDIC-insured ILCs.” Square denies it is trying to compete with community banks, stating it wants to help small businesses that may not have access to the traditional banking system. It planned to offer deposit accounts and loans to such businesses.

Square Reviews

People that love Square really love Square. Reviews say that it’s easy to use, that equipment looks great, and that flat rate pricing offers simplicity not found with other processors. (Just remember that convenience comes at a price.) But Square is not without its flaws, and some customers quickly fall out of love with Square when they have a problem. Negative reviews complain of accounts being closed without warning, and difficulty getting answers. Remember that part in the customer service section and Square not having a published phone number? That suddenly becomes a much bigger problem when you need to find out what’s going on with your processing account.

Square Reviews at the Better Business Bureau

Square was accredited with the Better Business Bureau in September of 2015, but has had a profile with the company for much longer. The Better Business Bureau only keeps a record of complaints for the past 3 years. In that time, Square has had 1,450 complaints lodged with the BBB, which is on the higher side given how long Square has been in business. As of autumn 2016, most of those complaints are in the category “Problems with Product/Service,” while "Advertising/Sales Issues" and "Billing/Collection Issues" each have seeral hundred. The categories "Delivery Issues" and "Guarantee/Warranty Issues" each have fewer than 100 complaints. Reviews allege that Square held funds without explanation, that Square can’t be reached to get answers to questions, and that accounts are closed with no warning or explanation. Only 196 of the complaints have been resolved to the customer’s satisfaction as of autumn 2016. The remaining complaints are listed as “answered” but aren’t considered resolved. Complaints can be listed as “answered” if Square replied to the initial complaint and then the business replied but wasn’t satisfied with Square’s reply, or the business didn’t answer once Square replied. Square does seem to regularly reply to complaints lodged on the BBB website, which likely contributes to its A+ rating despite the high number of complaints. In addition to the formal complaints, there are 61 negative reviews for Square in the BBB’s reviews section as of autumn 2016, up from 4 when we first wrote about the complaints last year. There are also 4 positive reviews and 1 neutral review. The 4 positive reviews express appreciation for assistance with chargebacks, no extra fees, no issues with equipment or customer service, quick availability of funds, and positive experiences with customer service. The 1 neutral review expresses irritation that the customer can’t reach Square by phone, even though the company says you can. The 61 negative reviews complain of the same type of things that others say about Square: accounts were frozen or closed without warning, Square held funds, refused transactions, and was impossible to contact to correct problems. Some reviewers complained of rude customer service reps or even being hung up on when they did reach Square for assistance, and of hidden costs despite Square’s claim of flat rate pricing.

What CardFellow Thinks

CardFellow has written about Square several times. The company is a great option for smaller businesses that have traditionally found it too expensive to get a traditional merchant account for taking credit cards. However, we caution businesses to consider all the factors when looking for a processing solution, and not just buying into the most popular or visible company. Most importantly, if low pricing for merchant accounts is important to you, don’t automatically assume that flat rate is it. Simplicity is not the same thing as low cost. You can read our Square vs. PayPal Here comparison, or check out the detailed CardFellow Square Review.

Ben Dwyer

Ben Dwyer began his career in the processing industry in 2003 on the sales floor for a Connecticut‐based processor. As he learned more about the inner‐workings of the industry, rampant unethical practices, and lack of assistance available to businesses, he cut ties with his employer and started a blog where he could post accurate information about credit card processing. As the blog gained in popularity, Ben began directly assisting merchants in their search for a processor. Ben believes in empowering businesses by providing access to fair, competitive pricing, accurate information, and continued support. His dedication to transparency and education has made CardFellow a staunch small business advocate in the credit card processing industry.