Updated August 2, 2024

Square Review: Pros and Cons

By Kim P, personal finance expert at CreditDonkey
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Explore a thorough review of Square's cost, security, and benefits for businesses. Find out if it's the right choice for you.

5-point scale (the higher, the better)

Pros and Cons

  • No monthly or annual fee
  • Free swipe card reader
  • Low, predictable fixed rates
  • Flat-rate pricing can be expensive for larger businesses
  • Costly add-on services

Bottom Line

Good credit card processor for low-volume businesses

You've probably seen their card readers at Girl Scout cookie stands and food trucks.

Why is Square so popular?

They're known for low costs and an easy setup. No contract required. The mobile reader is free and plugs into your phone or tablet. You could start swiping in minutes.

But Square isn't for everyone.

Take a look at the fees, features and types of businesses they're best for. Plus, see if other payment processors can offer you a better deal.

What is Square?

Square is a payment processor that lets businesses accept credit card payments in-person and online. It offers a full range of equipment, software, and business services to help you run your business. Square has more free tools compared to other processors.

It's popular with new businesses because anyone can open an account for free and start taking cards right away. All you pay is a simple flat-rate transaction fee for each sale.

The Square POS already includes many features, like free online store, inventory tracking, and employee scheduling. Small business owners can save time and energy by having everything they need in one app.

The Square company was renamed to Block, Inc. in December 2021. You may recognize Block's other businesses too, such as Cash App, Afterpay (a buy now pay later service), Weebly (a web hosting service), and Tidal (a music streaming service).

Who Is Square Best For?

Square is a good company for new or mobile businesses thanks to the low 2.6% + $0.10 per-swipe fee. But large high volume businesses should consider a dedicated merchant account.

  • New companies: With no monthly fee and flat rates for all credit cards processed, Square is an affordable option for new businesses.

  • Companies with small transactions: Because it's a fixed rate (2.6% + $0.10), small transactions remain affordable. For example, a $10 transaction would only cost you $0.37 (versus a $1,000 transaction, which would cost $26.10).

  • Mobile businesses: Companies on-the-go need a simple payment processor they can use anywhere. Square's card reader can be plugged right into your phone or tablet.

Counterpoint: If you're processing more than $10,000 a month in sales, you'd be better off with a subscription-based processor like Stax. Square's flat-rate pricing will end up being expensive if you have lots of transactions.

Square Pros & Cons

PROS:

  • Low, predictable fixed-rate at 2.6% + $0.10 per swipe
  • No monthly or annual fee
  • No contract
  • User friendly interface
  • Free swipe card reader
  • Free POS app
  • Feature-rich all-in-one system
  • Can accept offline payments
  • Quick deposits within 2 business days
  • See Square Deal >>

CONS:

  • Weak customer support
  • Costly add-on services
  • Risk of having funds on hold or account closure
  • Flat-rate pricing can be expensive for larger businesses
  • High-risk businesses may not be accepted

If you want an alternative with stronger customer support, check out Helcim. They have an in-house customer service team that's serious about making customers happy.

Is Square or PayPal better?
Square is better for in-person payments, while PayPal is better for online businesses. Square has a more advanced POS with tools such as scheduling, employee, and inventory management. On the other hand, PayPal can accept PayPal and Venmo, but it has limited functions for physical retailers.

How to Get the Best Credit Card Processing Deal

Square is good for new and smaller merchants, but it may not be the best deal for larger businesses. If you process more than $5,000 a month, a full service merchant account is usually a cheaper option than Square.

Pricing & Other Fees

The basic Square account is free with no monthly fee and no contract. You'll only pay a flat-rate processing fee for every transaction.

Square's fees are as follows:

TRANSACTION FEES:
Square charges a fixed flat-rate fee for all credit card transactions - regardless of whether it's Visa, MasterCard, or AMEX. The fees are as follows:[1]

  • Square reader or stand transactions (including credit cards, gift cards, and prepaid cards): 2.6% + $0.10
  • Online transactions: 2.9% + $0.30
  • Keyed-in or card-on-file transactions: 3.5% + $0.15
  • Square Terminal and Register payments: $2.6% + $0.10
  • Square for Restaurants (paid plan): $2.6% + $0.10
  • Square for Retail (paid plan): $2.5% + $0.10
  • Square Appointments (paid plan): $2.5% + $0.10

Related: Credit Card Processing Fees

How many credit card transaction does your business process in a month?

ACCOUNT FEES:
Square waives many typical account fees. With Square you pay:

  • No monthly or annual fee
  • No PCI compliance fee
  • No startup fees
  • No payment gateway fee
  • No chargeback fees
  • No early termination fee
  • No monthly minimum requirements

HARDWARE PRICES:
Square provides your first swipe card reader free of charge. If you need other devices, the costs are as follows:[2]

  • Additional magstripe reader: $10
  • Contactless and chip card reader: $59
  • Square Stand for iPad for contactless and chip: $149
  • Square Terminal: $299
  • Square Register: $799

Looking for a cheaper alternative? Stax offers one of the best deals for high-volume businesses with its subscription price. You pay one flat fee each month. No per-transaction markup and no contracts.

Is the Square Card Reader Good?

The free Square card reader offers the ability to accept credit cards anywhere with your smart device. Here are some things to know about it:

  • You can only accept swiped credit cards. Chip and contactless payments will require the chip reader.
  • You can choose between the reader with a headphone jack and one with Lightning connector.
  • You can send receipts via text or email. If you want to print receipts, you'll need to use a tablet and attach a receipt printer.
  • Offline payments only work with the swipe reader. Chip and contactless payments require internet connection.
  • No charging necessary. Just plug into your smart device.
  • The card reader works with iOS 15 or later and Android 7 or later.

If you don't want to wait to get the free reader shipped to you, you can buy it at a retail store. It costs $10, but Square reimburses the $10 to your designated account after activation.

Where can I buy a Square card reader? You can find the Square reader at major retail stores, including Target, Meijer, Walmart, and Walgreens. You may also find them at your local cellphone store, including AT&T, Verizon, and U.S. Cellular.

What You Get With Square

When you sign up with Square, you get:

Free magstripe reader:
This allows you to accept swiped credit card payments. For chip and contactless payments (such as Apple Pay and Google Pay), you'll have to buy the chip reader.

Free Point-of-Sale app:
The free POS app is pretty powerful. Functions include emailing/texting receipts, setting discounts, issuing refunds, reviewing sales data reports, and managing inventory. See more details in section below.

Free Virtual Terminal:
Lets you enter card payments directly from your web browser for phone and card-not-present payments. You can also store credit card info so you can easily charge repeat customers.

Customizable dashboard:
On your dashboard, you can enter multiple locations, customize receipts, create custom categories, tax settings, and inventory. You can also set up a loyalty program, manage employees' hours and sales, and create custom reports.

Note: some are add-on services for an additional cost.

Free online store:
Square comes with a free online store and eCommerce tools. You can build your own website with a variety of layouts and designs. It integrates with the Square POS so everything remains synced.

Square Online Checkout:
This free feature lets you create customizable pay buttons, buy links, and scannable QR codes. This lets you collect payment even without a website. You can just send a buy link directly to someone via email or text.

This feature is great for selling items, collecting payment for services, or accepting donations or membership fees. You're only charged the online processing rate.

Square POS App Features & Tools

The free Square POS app has a full array of services. Features and functions include:

  • Detailed reports and insights, such as what sells best, customer spending trends, and sales comparisons.
  • Track each employee's time cards, breaks, and overtime.
  • Grant different levels of access to employees.
  • Send custom invoices
  • Update inventory, run reports, and receive low-stock alerts.
  • Quick deposits within 2 business days. Instant Deposit will cost 1% per deposit.
  • Sell and accept gift cards.
  • Installment plan for customers, but you are paid upfront.
  • Create and manage up to 300 locations under one master account.
  • Integrates with many third-party apps and software.

Currently, you can only use the app on iOS and Android devices. It is not available on Windows, Blackberry, and Amazon Fire.

Keep in mind, though, that certain features in the app are only available on a tablet, such as an iPad. Most notably:

  • Printing physical receipts
  • Printing physical kitchen tickets (for a restaurant)
  • Displaying kitchen orders (for a restaurant)

Additional Add-On Services

You can also add more advanced tools for an extra fee. These include:

  • Advanced employee management: See sales reports by team member and manage multiple wage rates. $35/month per location.[3]

  • Loyalty programs: Create loyalty programs and enroll and rewards customers directly from the POS. Starts at $45/month.[4]

  • Marketing: Create email and social campaigns and track results, all within your POS. Starts at $15/month.[5]

  • Payroll: Import timecards and pay employees and contractors. You can even offer benefits and 401k plans. Square takes care of tax filings. Employee payrolls are $35/month + $6/person. Contractor payrolls are $6/person/month.[6]

Advanced Square Plans

For businesses with more specific needs, Square offers advanced industry-specific plans for extra cost. These include:

Square Appointments
For service industries such as consultants, spas, personal trainers, etc, this advanced plan helps you manage scheduling. Includes:

  • Free booking site, or integrate with Instagram and Google
  • Allows online appointment bookings 24/7
  • Syncs with your own calendar
  • Send automated reminders
  • No-show protection by requiring pre-payment or cancellation fees

Free for a single location. Paid plans start from $29 per month, per location.

  • Free ($0/mo for a single location): 2.6% + $0.10 for swipe, dip, and tap
  • Plus ($29/mo per location)): 2.5% + $0.10 for swipe, dip, and tap
  • Premium ($69/mo per location)): 2.5% + $0.10 for swipe, dip, and tap

Businesses that process over $250K per year can contact Square Sales team for pricing.[7]

Square for Restaurants
Restaurants can benefit with Square's POS system specifically built for restaurant operations. There is a Free plan available and you only pay for processing fees. Larger operations can choose the Plus or Premium plans.

  • Menu and table management
  • Add on customers items and modifiers
  • Auto gratuity
  • Manage multiple restaurants

The paid plans have more features like custom floor plans, reopen closed checks, and live sales and close of day reports.

  • Free: $0/mo per location
  • Plus: $69/mo per location
  • Premium: $165/mo per location

All plans have the same processing rate of 2.6% + $0.10. For businesses with over $250k per year in card sales, custom pricing is available.[8]

Square for Retail
New online or in-person businesses can start with the free plan. Expanding businesses have the option to sign up for one of the more advanced paid plans.

All plans include:

  • Automatic customer profiles
  • Unlimited inventory tracking
  • Unlimited employee pass codes

The paid plans include more advanced features like cross location inventory, vendor and purchase order management, multiple wage rates, and more.

  • Free ($0/mo): 2.6% + $0.10 in-person; 2.9% + $0.30 online
  • Plus ($89/mo per location): 2.5% + $0.10 in-person; 2.9% + $0.30 online

For businesses with over $250k per year in card sales, contact Square for custom processing rates.[9]

Square Customer Service

You have to be an existing merchant if you want phone support. You must complete an online form after signing into your dashboard. Once you complete the form, Square will provide you with a unique customer code that you use to talk to them.

Live phone support hours are from 6 AM to 6 PM PT. There is also email support if you don't need an immediate response.

Square also has an extensive knowledge database consisting of blogs, FAQs, videos, and community forum.

Square's customer service number is 855-700-6000. You need to be an active customer with a customer code.

You can also email Square at help@squareup.com.

Is Square Safe?

Square takes these security measures to keep your payments safe:

  • All security is implemented and maintained in-house by engineers.
  • All products come out of the box with end-to-end encryption.
  • Prohibits storage of card numbers, mag-stripe data, and security codes on client devices.
  • Frequent hacker tests to identify potential vulnerabilities.
  • Takes on the burden of PCI compliance for you.
  • Requires 2-step authentication to prevent unauthorized personnel from hacking into your dashboard.

Is Square trustworthy?
Square is a legit company, with an A+ BBB rating and 4.3 stars on Trustpilot out of over 4,014 customer reviews. But it does receive a fair number of complaints. Most complaints are related to the poor customer service and frozen accounts. Since Square doesn't verify your business beforehand, there's a higher risk of funds on hold (or even account closure) if there's suspected fraud.

How It Compares

With Square, merchants pay a flat rate of 2.6% + $0.10 for swipe, dip, and tap transactions, 2.9% + $0.30 for online transactions, and 3.5% + $0.15 for keyed-in transactions. It offers a free mobile reader, web store, and virtual terminal. There is no contract and no monthly fee.

PayPal:
Square provides more features. It has a stronger POS with more advanced management features, such as scheduling, employee, and inventory management.

Square provides a free virtual terminal, where you can take keyed-in payments over the phone. With PayPal, you need to pay an extra $30/month for this feature.

PayPal does have an advantage if you sell online though. You can accept PayPal payments, which is popular with online shoppers. The system integrates with just about all eCommerce platforms. PayPal's mobile POS also accepts PayPal payments, which Square's does not.

Stripe:
Stripe also charges a flat rate per-transaction fee comparable to Square's. Stripe started as an online-only credit card processor (though they do now offer a terminal for in-person payments).

Stripe is known for its advanced tools which allow for complete customization of your checkout experience. However, it's best if you have a built-in developer team. So it may not be ideal for small online businesses that don't need advanced customization.

It's also worth considering for large volume businesses, as they give a volume discount after $80,000 in monthly sales.

What the Experts Say

As part of our series on small businesses and payment processing, CreditDonkey asked a panel of industry experts to answer readers' most pressing questions. Here's what they said:

Bottom Line

Square offers many benefits, operating as a full point-of-sale. They have the richest history in mobile payment processing and offer many additional features via third parties.

Square is a cheap, convenient way to accept credit card payments. There's no monthly fee and it offers lots of free features, making it worth it for new and small businesses. But, if you have heavy volume, could be considered "risky," or need phone support, you may want to look elsewhere.

References

  1. ^ Square Pricing
  2. ^ Square POS Hardware and Equipment
  3. ^ Advanced employee management. Pricing, Retrieved 7/28/23
  4. ^ Square. Loyalty, Retrieved 7/28/23
  5. ^ Square. Pricing, Retrieved 7/28/23
  6. ^ Square. Pricing, Retrieved 7/28/23
  7. ^ Square. Appointments Pricing, Retrieved 07/28/2024
  8. ^ Square. Restuarants Pricing, Retrieved 07/28/2024
  9. ^ Square. Retail Pricing, Retrieved 07/28/2024
Square Reader: Free Mobile Credit Card Reader

Square Reader: Free Mobile Credit Card Reader

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  • Pay 2.6% + 10¢ Per Swipe for Visa, Mastercard, Discover, and American Express
  • Accept Credit Cards Anywhere
  • Fast Setup, No Commitments
Stripe

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  • Predictable costs: Transparent flat-rate pricing with no setup fees or monthly charges – pay only for what you use
  • Enable more sales: Support credit cards, mobile wallets, and 135+ international payment methods
  • Developer-friendly tools: Integrate payments quickly with Stripe's intuitive APIs and documentation
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Compare:

How many credit card transaction does your business process in a month?
74% Less than 100
15% Between 100 to 500
4% Between 500 to 1,000
8% More than 1,000
Source: CreditDonkey. Totals may not add to 100% due to rounding.
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