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What Is Square Credit Card Processing

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The Fees Are Low But They Dont Offer Any Free Features Like Other Payment Processors Do

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Square currently has flat rate of 2.65% per swipe, which is one of the lowest pricing credit card processor today. In addition to that, there are no monthly fees or yearly charges. All you have to do is pay the transaction fees with each purchase. Square allows businesses to process credit card payments by using their free application or device they send out.

Should You Use Square

Well get into more details on Squares specific products below. But, generally, for any small business processing less than $120,000 per year, Square is the best POS and payment processing solution because it comes with no fixed monthly costs and offers an incredible value with the free POS system. Visit Square to create your free account.

Fees For Square Reader And Square Stand

Square used to offer a very competitively priced magnetic stripe card reader, but following the switch to chip cards in the U.S., users are encouraged to purchase the new chip card reader at a still-low cost of only $49. The company offers a single processing fee option for all merchants using Square Reader or Square Stand, its two flagship pieces of hardware: a flat rate of 2.60% plus $0.10 for swiped transactions and 3.5% + $0.15 for keyed-in transactions. Alternatively, the company provides other rates for merchants from businesses in different industries. Square for Restaurants rate is also 2.60% plus $0.10 while Square for Retail charges 2.5% plus $0.10. Invoice payments are processed at a rate of 2.75%. The company allows merchants to deposit into their bank accounts on the next day for free or instantly for 1% of the amount being transferred.

Square formerly offered a plan that included a flat monthly fee of $275 and 0% on swiped transactions up to $250,000 in processing per year, but this plan was discontinued as of February 2014.

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Beware Of Processing Limitations

Square markets its pricing with a straightforward and easy-to-understand message however, the company fails to mention anything about its account cancellation and risk mitigation policies in its marketing materials and advertising placements. These policies have caused significant problems for many merchants, and some business owners have even complained of large financial losses. Many merchants who find themselves in the crosshairs of Squares underwriting department would be better served by a high-risk specialist or high-volume merchant account provider. Due to the risk posed by Squares fund holding policies, and the fact that Square allows merchants to run transactions that may trigger account cancellation without any prior warning, many merchants have complained of misleading marketing by the company. Hence, we have lowered Squares grade in this section to a B rating.

When Is Square Good For You

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Despite providing products and services that could work for just about any business, Squares offerings are still mainly suited to individuals and small- and medium-sized businesses. This includes start-ups, coffee shops, food trucks, occasional sellers , and other businesses just now making the move to accept credit card payments.

This is mainly because of Squares relatively high credit card processing fees and its use of a flat-rate pricing model. But its also because Square is a payment aggregator and doesnt provide dedicated merchant accounts for processing credit card payments. By payment aggregator we simply mean that Square, like many other third-party payment processors, provides merchants with access to an aggregated merchant account that processes payments for numerous businesses at the same time.

Businesses that process a lot of card transactions and have a fairly high sales volume, however, will typically benefit most from starting a dedicated merchant account with a traditional merchant account provider.

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Top Ten Reviews Verdict

Fast to set up and simple to use, Squares payment-processing service offers cost-effective solutions for small businesses that require no special training, but larger retailers may feel restricted by their offering.

Pros

  • Not suitable for high-risk businesses

– SaaS- Super-fast set up, no experience required- Mobile app- PCI compliant customer card storage- Variety of eComm integrations- Fast payouts for additional fee- Free business debit card with real time balance updates- Transparent pricing- Customized rate for high-volume businesses

Set up in 2009, Square Credit Card Processing was the first to offer a free card reader for its smartphone app with no monthly fee, allowing businesses to take in-person payments via their mobile phone for the first time.

Since then its continued to disrupt, expanding its offering with an iPad-based PoS, an online store that syncs with your in-app inventory, and ecommerce solutions such as inventory management, recurring billing, advanced analytics and third-party integrations. It can even supply its own custom in-store hardware.

While Square is keen to push its big business offering, its the competitive upfront pricing, no monthly fee and no minimum volume that stands it apart from other mobile payment-processing platforms, attracting startups, micro-businesses and low-volume SMEs looking for a better deal.

If you are looking for a choice the read our guide on the best credit card processing services.

Is Square Worth It For Business Owners

As with any product, the answer must be: it depends. Square is often worth the price for small, scaling businesses, freelancers, and independent contractors with simple needs.

But if you plan to forgo the hardware, you may find Squares functionality sorely lacking for the price.

Moreover, larger businesses may prefer the comprehensive service and lower costs that come with contract-based payment processors.

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Intro To Credit Card Processing

You dont need to know the ins and outs of card payment processing to own and operate a business. But it definitely helps to understand the basics. In this guide, we walk you through everything you need to know about credit and debit card processing and how to select the best option for your business.

Square Vs Paypal: Pos Comparison

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Square
Read our PayPal Review

In general, Square is a better option to accept in-person payments while PayPal is a better option for e-commerce and online payments. Both Square and PayPal were rated one of our top ten POS systems in 2021, but Square received a significantly higher score.

One of the biggest differences between these two companies POS systems is that Square offers more business tools, such as employee management, while PayPals features are limited to payment. Square has a feature to schedule appointments within the app so that you can integrate your calendar with your payment platform. Customers can book online and you can send them reminders through the app. The software also enables you to keep client credit cards on file and schedule prepayment before visits.

PayPals transaction fees are listed as lower for card-present transactions2.29% plus $0.09 compared with $2.6% plus $0.10however, PayPal does have more additional fees that are less apparent and harder to account for .

The first card reader Square gives you is free. After that, each additional card reader is $10. With PayPal, card readers cost $29 and $79 for each additional device. Square offers a tip management tool and both companies offer multiple options for software integration.

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Best App Way Better Than Square

This is the best app ever. Ha ha. I mean it really is though, I can run my whole business from my phone with ease and my clients love the ease of paying by text, e-signing contracts, and I love the low processing fee!

I cannot wait to see where this awesome team takes this app and cannot believe how great they are! The greatest and easiest customer service that I can reach within the app and get a lightning fast response! What!? Yep!

Skg1991, 07/17/2016

Where Square Falls Short

Another area that Square comes up short in this review is its customer service. For a company that has only been around for a few years, Square is racking up a lot of complaints . The majority of the complaints fall into three areas: virtually nonexistent phone support, confusion regarding its hold policy, and reports of random fund-holding or account deactivation exceeding 30 days with no explanation or communication from Square.

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Square Credit Card Processor Fees And Cost

There are different fees for each type of payment, so mainly, the cost varies depending on the payment whether it’s a credit card, debit card, or contactless payment.

Let’s get started with the cost of the in-person payments that are made at the point-of-sale, but before we head to the fees of each transaction, it’s important to know that the type of terminal makes a difference, but in this section, we’ll focus on the general Square point of sale fees. However, the company has three other options: Square for restaurants, Square for Retail, and Square Appointments.

  • For in-person payments, the company charges 2.6% + $14.10 for every tapped , dipped , or swiped payment, with fee Square reader for magstripe for the first reader, and $10 for each additional one.
  • Square as we said before, accepts payments on the website, by invoice, or over the phone, for these types of payments, the company charges 2.9% + $42.31 for Square invoices card transactions, 3.5% + $21.16 for Square virtual terminal transactions, 2.9% + $42.31 for eCommerce transactions, and 1% with a $1 minimum for ACH bank transactions.

Does Square Have Chargeback Fees

Credit Card Processing Blog: Problem with Square Credit Card Processing

No. Unlike much of its competition , Square doesnt add on service fees for individual chargebacks, which are payment disputes typically initiated by a customer. When a chargeback occurs, Square will simply place a hold on your account for the amount of the disputed funds or debit the amount from your bank account .

Learn more about chargebacks, how to fight them, and how to avoid them at our comprehensive guide on .

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What Is A Merchant Account

As mentioned, Square allows businesses to start processing so quickly because it bypasses the need for a merchant account. You may now be wondering, what is a merchant account? And, do you need one?

A merchant account is an account that holds the funds youve earned from your customers credit and debit card purchases. It processes transactions automatically, but you cannot add or remove funds to or from it yourself. Any funds deposited into your merchant account will release to your business bank account after processing, usually within a day or two.

And the answer to the latter question: It depends.

Other Considerations Before Choosing Square

There are a few other things to consider before choosing Square. First, you should know that Square is a third-party payment processor, not a traditional merchant account. Being a third-party payment processor means you can have instant access to Square without an application process or waiting period, but it also means you have a higher risk for account holds and terminations.

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Is Square Right For My Business

I run a small business in my local market, but I dont currently accept cards.

Youre missing out! Debit cards are officially Americas favorite way to pay, followed by credit cards . Fortunately, though, Square is an affordable solution to that issue and one thats tailor-made to small businesses.

Theres no contract to tie you in, and no monthly costs youll pay a fee based only on what you sell. So, if your market stall or small business is seasonal , you wont have to worry about ongoing costs swallowing up your hard-earned profits.

Id like to take payments online, but dont have a website. Can Square help?

Of. Course. If youd like to build a website, Square can assist. Set one up through the web design wizardry of Wix, then leverage the ecommerce excellence of BigCommerce and Ecwid to start taking payments through it.

Thats if you want a website if you dont, then Squares virtual terminal is a super simple way of using the internet to accept secure payments. Alternatively, you can use Squares app to save your customers card details on file, and send invoices with ease. Taking online payments has never been easier!

I already take over $10,000 in card payments per month, and Im looking to change provider.

Square, in this case, is not right for your business. Squares flat fee per transaction is well-suited to small enterprises, but larger ones are better off negotiating a more flexible deal with a merchant account provider, such as an ISO or a bank.

Started By The Twitter Guy

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Founded in February of 2009 by Jack Dorsey, who is also the founder of Twitter, Square has grown into a large, publicly-owned company . Much of the companys success can be attributed to its unique take on mobile credit card processing and by being the first to market with it. Traditional credit card processing companies restricted their services to actual businesses, required a long application process, required and credit check, and often have a slimy sales process designed to milk the most in fees out of their customers. Square eliminated most of these barriers brought card payments and acceptance to everyone with a quick sign-up and easy-to-understand fees.

Squares current leadership team.

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How To Use Square To Run Your Business

In addition to payment processing, you can use Squares mobile POS app to help run your business on the go. The following management tools are available through the app:

  • Order and inventory management: Add items to your library, track in-stock inventory, and check order status. Square automatically updates your inventory when you make a sale, so your stock numbers are always up-to-date.
  • Sales reports: Sales are recorded and summarized to help you track growth and make key business decisions.
  • Customer management: Enter your customer information, such as email addresses and purchase history, so you can provide better service or grow your business via email marketing.
  • Team member profiles: Add and view team members to quickly reference contact information.

Since your Square Dashboard is your business hub, this is where youll manage many of the payments-related aspects of your business. Use your Dashboard to access tools and features like:

If youre ready to get started, read our Square POS guide for step-by-step instructions on setting up your account and using its POS features.

Simplicity & Competitiveness Are Two Different Things

Square hasnt invented anything new for better or worse, it has simply made credit card processing more accessible to the masses, largely through oversimplified pricing. Square pays interchange fees to issuing banks and assessments to card brands just like any other processor.

Interchange is credit card processings version of wholesale, and the vast majority of interchange rates are significantly less than the 2.6% and 3.50% rates that Square charges.

However, Squares pricing looks simple. But simple is not the same as competitive. Dont be fooled into thinking that a simple flat rate is automatically the lowest cost for your business. In many cases, it isnt.

If you need help comparing your pricing with Square to other companies, try CardFellows free quote comparison tool, which includes pricing for Square so you can see exactly how it stacks up.

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Does Square Offer Consulting Services For Businesses

Square doesnt offer direct business consulting services. That said, their Town Square is packed with over 1,660 blog articles on everything from how to start a small business to setting up worker benefits to filling out tax forms.

Plus, their blog is packed with tons of tips, tricks, and ideas to jumpstart your creativity and business sense.

Square Vs Merchant Account: Breaking Down The Key Differences

How to Use Square to Process Credit Cards &  Run Your Business

Below explores the key differences between Square vs merchant account.

Merchant Account

A merchant account establishes trust between you and your payment processor. This trust allows you to process a broader range of payments. You will also typically receive overall lower rates when compared to an aggregator like Square. Because it did the due diligence upfront, your payment processor has a higher threshold of tolerance for your business processing habits.

Square

Square is an aggregator. This means that it essentially uses one giant merchant account for all of its customers and their transactions. This merchant account has funds coming and going at Squares discretion. Because of this, the major complaints about Square credit card processing include funding delays, frozen funds, and lack of customer support.

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What Do You Get With A Square Merchant Account

When setting up an account with Square, you receive a payments dashboard enabling you to track your gross and net income, as well as other basic accounting metrics. In addition, you receive a free magstripe reader and access to their virtual terminal to start immediately processing payments if needed.

You may also receive additional hardware, depending on the choices youve selected, shortly after youve completed onboarding.

What Kinds Of Businesses Benefit From Square Credit Card Processing

If your business processing habits fit any of the below descriptions, Square may be worth considering to fulfill your processing needs:

  • Your business processes infrequently.
  • It processes under $5,000 a month.
  • Your business is seasonal and/or simple.
  • You dont foresee the need to reach someone on the phone for support.
  • Youd like to get set up to process payments immediately.

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Stay Or Switch From Square To Another Merchant Service

Are you unhappy or happy with credit card procesor services Square ? Share your comments, insights, honest opinions, service levels from merchant account Square. Have you been Shutoff, Closed, Denied, Cancelled by Square? What are the ratings for Square? Post your experiences with Square on Sales Practices, Length of Contract, Hidden Fees, Early Termination Fees, Problems with Square, Chargebacks, Extra Fees, Transaction Rates, Contracts, Contacts, Support, Services Square. Find lower cost merchant account processor quotes and comparisons no contract service providers that have cheaper rates then Square. Leave your customer rating and review of Square below.

This is for a number of reasons, whenever the founder of Twitter is invol

Tagged as:merchant account reviews, square, square complaints, square credit card processing, square credit card review, Square PCI Compliance, square scam, square security

About the Author

My name is Robert Evans and I am a co-founder of CheapestMerchantAccounts.comWe launched this website in an effort to provide the world’s best merchant account review website. We have done extensive research on each and every provider listed and are continually working to improve our website and rankings.Additionally we will be writing and publishing articles that we hope will allow our visitors a greater look into the credit card processing industry. These articles should give you a solid stance on which to negotiate your next merchant account.

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