2022 Square Payments Review: Is It Right for Your Business?
Meaghan has provided content and guidance for indie retailers as the editor for a number of retail publications and a speaker at trade shows. She is Fit Small Business’s authority on retail and ecommerce.
Anna’s experience in business and finance led her to work for a US risk mitigation company in Singapore. She has contributed to POS and payments topics in the Retail section across Fit Small Business.
This article is part of a larger series on Payments.
Square Payments is Square’s built-in payment solution that provides mobile payment processing and aggregated merchant services. Its features include instant setup with no application or approval process, free invoicing software and mobile payment app, next-day deposits, and chargeback management. Square Standard card-present transaction fees are 2.6% + 10 cents, with volume discounts available. Generally, Square is best for new and occasional sellers processing under $10,000 monthly.
Square Payments
What We Like
- Easy to set up
- Seamless omnichannel selling
- Flexible POS system that grows with your business
- Straightforward pricing
What's Missing
- Account stability issues; reports of frozen funds
- Incompatible with most high-risk businesses
- Mixed reviews on customer support
Deciding Factors
- Monthly processing: $0
- Payment processing fees:
- In person: 2.6% + 10 cents
- Online, Recurring, and Invoicing: 2.9% + 30 cents
- ACH processing: 1%, min. $1 (ACH)
- Card-on-file: 3.5% + 15 cents
- Chargeback fee: Waived up to $250/mo.
- Deposit speed: 1–2 business days; instant funding for 1.5%
- Card readers cost: $0–$49
When To Use Square Payments
After spending years reviewing merchant services, we can say that Square Payments offers the most convenient way for new and small businesses to start accepting payments. The free point-of-sale (POS) app and online payment solution offer excellent value, and the entire system is incredibly easy to use.
In particular, Square Payments is best for:
- Mobile payment processing: Square Payments includes a free mobile card reader and POS app for iOS and Android. Users can process payments with or without an internet connection, including adding tips, issuing printed or digital receipts, and even split sales between different payment methods. Square is even our top pick for the best mobile card readers on the market.
- Multichannel payment processing: Square Payments allows users to accept payments made online, in-store, and through mobile. It comes with a free Square Online account that lets you create your own website, create and send payment links, and accept payments through social media accounts, making it one of the leading multichannel POS systems and payment processors for small businesses.
- All-in-one payment processing for low-volume sellers: Square Payments offers one of the most affordable credit card processing rates for businesses that process less than $10,000 in total transactions per month. It has no monthly, cancelation, or chargeback fees and does not require application or approval to sign up.
- Small businesses needing a virtual terminal: Square tops our list for the top virtual terminals because of its free software and user-friendly interface.
Square also offers the best POS software for small businesses, which comes free with every Square Payments account. To learn more about that, read our Square POS review.
When Square Payments Would Not Be a Good Fit
- Businesses processing over $10,000 per month: Square Payments charges a flat fee of 2.6% + 10 cents per transaction, which is ideal for new and small sellers, but established businesses can save money by switching to a cheaper credit card processing company with an interchange-plus model.
- High-risk business: Square does not serve this business type. High-risk businesses will need to apply for an account with a merchant services provider that specializes in high-risk merchant services.
- B2B payment solution: Square Payments charges for instant deposits and has limited ACH and digital check payments processing features that can be better served by Stripe or QuickBooks, our recommended B2B payment solutions.
- Businesses looking for customizable payment options: Square is an outstanding solution for simple online payment solutions; however, you might want to consider alternatives like PayPal and Stripe if you’re looking for more customizable payment features. Find out how Stripe and PayPal compare to Square.
Square Payments Alternatives At a Glance
 |  |  |  | |
|---|---|---|---|---|
Best for | Tech-savvy and B2B businesses | Low-cost payment processing w/ free POS | High-volume merchants with large transaction amounts | Payment processing for seasonal and occasional sales |
Monthly fee | Starts at $0 | $0 | Starts at $59 | Starts at $0 |
Card-present transaction fee | Starts at 2.7% + 5 cents | Interchange plus 0.1%–0.3% + 5–8 cents | Interchange + 8 cents | 2.29% + 9 cents |
Keyed transaction fee | N/A | Interchange plus 0.2%–0.5% + 10–25 cents | Interchange + 15 cents | 3.49% + 9 cents |
Ecommerce transaction fee | 2.9% + 30 cents | Interchange plus 0.2%–0.5% + 10–25 cents | Interchange + 15 cents | Starts at 2.59% + 49 cents |
You May Also Like:
- Shopify: Shopify is the industry-leading software solution for online and multichannel sales. So if you have a native online business, see how Shopify compares to Square.
- PayPal: Not only does it stand out as one of the most trusted online payment solutions, PayPal also allows you to accept in-person payments with its POS app, Zettle. To know how Square stacks up against PayPal, read our Square vs PayPal review.
- Payanywhere: Payanywhere is another alternative with affordable rates similar to Square. See how Payanywhere stacks up against Square.
Looking for the lowest rates? The payment processing rates you will pay can vary based on your business’s size, type, and average order value. To find the most affordable option and compare multiple processing rates, read our guide on the cheapest credit card processing.
Square Fee Calculator
Square Fee Calculator
Enter your current in-store and/or online sales volumes and average order values for an estimate on the monthly fees you would pay using Square.
Since our Last Update:
Since Square’s acquisition of Afterpay in 2021, it has launched several integrations. In January 2022, Square began offering its buy now, pay later (BNPL) feature for online purchases. This month, it has extended BNPL to in-person sales. In addition, Square also recently held its sixth annual partner and developer conference where Square announced its new omnichannel APIs, which include Cash App Pay, Bookings API, and Checkout API.
Square Payments Pricing
Square Payments’ pricing guide shows transaction fees that start at 2.6% + 10 cents, and actual rates depend on your customers’ payment type: card-present or card-not-present (your free account enables you to accept both). The main difference between the two is the need for additional hardware. There are no monthly fees, processing requirements, and payment card industry (PCI) fees.
- Flat-rate transaction fee: 2.6% + 10 cents per transaction, 2.5% + 10 cents when using Square Register
- Invoices: 2.9% + 30 cents per transaction
- Ecommerce sales: 2.9% + 30 cents per transaction
- Recurring billing and card-on-file transactions: 3.5% + 15 cents per transaction
- Keyed-in payments and card-not-present: 3.5% + 15 cents per transaction
- Volume discounts: Square will create custom pricing packages for any business processing over $250,000 in credit card sales.
For a breakdown of Square’s software pricing, see our Square pricing guide.
Square Hardware
Square Reader for Magstripe | Square Reader for Contactless and Chip |
|---|---|
 |  |
First free, additional $10 | $49 |
Accepts payments via magstripe (swiped), available in jack or lightning connector | Bluetooth reader that accepts EMV (chip), and NFC (Apple Pay, Google Pay) payments |
Square Stand for Contactless and Chip | Square Terminal | Square Register |
|---|---|---|
 |  |  |
$169 or $16 per month for 12 months | $299 or $27 per month for 12 months | $799 or $39 per month for 24 months |
All-in-one credit card machine with POS, card reader, and receipt printer | Stand-alone mobile POS that can take orders, accept card payments and issue receipts. | Full POS with touch-screen monitor, detachable customer-facing display, and credit card machine |
Square Features
Setup & Application
Square Payments offers an easy sign-up process and does not require any approval process to start accepting payments. When you sign up for your free Square account, it automatically gives you access to Square Payments. You get a setup guide that will take you through the necessary steps which only takes minutes to complete. Once done, you can start setting up your store and accept payments right away.
Click on any “Get Started” button on the Square website and provide your name, email address and a secure password.
(Source: Square)
Ready to get started? Visit our complete step-by-step guide to setting up your Square account.
Contract & Terms of Service (TOS)
Square does not require any long-term contract. It offers a month-to-month contract for both its free and paid versions. Square is also an aggregator, which means it does not provide individual merchant accounts—instead it aggregates multiple similar clients and signs up for a single merchant account with a direct processor or acquiring bank.
While this is ideal for small businesses, note that the TOS specifies a limit of allowed volume of card sales per month, and any Square account that exceeds that limit will be required to sign up directly for a merchant account with the acquiring bank.
Other stipulations within Square’s Payment TOS are:
- List of businesses not supported by Square under Section 3.
- Note that there is a separate fee schedule for Afterpay, Pay with ACH, and Cash App Pay transactions, which you can find on your Square Dashboard.
- Payments taken in offline mode that are not validated online expire after 24 hours. Square is also not liable for the additional risk when accepting payments offline.
- A reserve account may be required for businesses with a certain degree of risk—the value of which can be adjusted at any time.
Square lists additional agreements to detail its other products such as ACH, POS, Square Checking and Savings, and hardware terms, among others. You can find Square’s other Terms of Service here.
Square Dashboard
This all-in-one management platform lets you manage your invoices, finances, inventory, and multichannel sales all in one place. Square Payments users can manage all their business processes, sync inventory, and track sales through Square Dashboard. It also enables you to track your team and view detailed reports among others.
Square’s dashboard is adaptable, allowing you to customize shortcuts so you always see what’s most important to your business once you log on.
(Source: Square)
Mobile Payment
Square Payments’ mobile app is compatible with Android and iOS devices and comes with a free magstripe reader that can be mailed immediately to the user after successfully signing up for an account. It also allows you to manually enter the transaction amount or select items from your Library if you’ve set up your inventory.
Square’s Mobile App provides a wide range of payment tools including the ability to process invoice transactions in-person.
(Source: Square)
Buy Now, Pay Later (BNPL)
Square users are able to offer BNPL payment options to their customers. This means your customer can choose to pay for their items in four interest-free installments over six weeks, while you immediately get the full value of your sales. It’s available through Square Online, Web Payments, and Afterpay. Recently, Square has made Afterpay BNPL available for in-person transactions as well. Signing up for Afterpay is free and does not require additional monthly payments, but the transaction fees are slightly higher.
- Square Online Checkout: Introductory pricing at 2.9% + 30 cents through July 29, 2022. Afterward, it’s 6% + 30 cents per transaction.
- Afterpay Online: 6% + 30 cents through Square Online and Square Web Payments SDK
- Afterpay In Person: Introductory pricing rate of 2.6% + 30 cents through Sept. 10, 2022. Afterward, 6% + 30 cents per transaction.
Invoicing
Square’s invoicing feature allows you to request payment through invoices and accept payments through different payment methods such as card and ACH transactions. You can create, send, and track invoices online or via Square Payments’ iOS and Android apps. You can also utilize automatic payment reminders, advanced reporting, and recurring billing. Advanced invoicing features are also available for those who want a more customized look, plus additional tools like multi-package estimates and milestone-based payment schedules.
Square Payments offer simple and advanced invoicing tools to match businesses that require functions such as recurring payment, estimates, and custom payment schedules.
(Source: Square)
Learn how to use Square Invoices in nine steps with our ultimate guide.
Card-on-File Transactions
Square Payments allows you to process transactions automatically with its card-on-file feature. This is ideal for recurring payments, open tickets, and customers for subscription-based businesses. Aside from their card details, you can also use your customer’s email address to send digital receipts for both online and in-person transactions. Square is also PCI-compliant so there is no need to worry about handling your customer’s sensitive information.
Ecommerce
Square Payments enables you to sell your products online (on social media and ecommerce stores), manage shipping and delivery, offer curbside pickup, offer discounts and gift cards, and more. If you’re an online merchant, then you can build and publish an online store—even without coding knowledge—by accessing Square Payments’ drag-and-drop site builder. It also integrates with popular web builders, such as WordPress and Wix.
Square’s website builder is an easy drag-and-drop function that comes free with every Square account.
(Source: Square)
Square is easy to use, but doesn’t offer a ton of customization options. If you want a more flexible ecommerce payment solution, or one that integrates with more software, consider Stripe. See how Square compares to Stripe.
CBD Program
Businesses that sell CBD products, including oil, flower, seeds, lotions, topicals, and wax can sign up for a Square account through its CBD Program. It allows users to accept payments for hemp and hemp-derived CBD products that have less than, or equal to, 0.3% THC in most states within the United States. However, expect sign-up requirements and transaction fees to be slightly different, with higher payment processing due to the risk involved.
Payment Method | Fees |
|---|---|
Card-present (tap, dip, swipe) | 3.5% + 10 cents |
Card-not-present | 4.4% + 15 cents |
Card-on-file | 4.4% + 15 cents |
Square invoices | 3.8% + 30 cents |
Square online | 3.8% + 30 cents |
ACH payments | 1% |
Customer Relationship Management (CRM)
Square comes with built-in CRM management tools while other software offer CRM as an add-on. You are given access to the customer directory, where you’ll find all customer information for use in marketing, analytics, and more. This is where you store email addresses used for sending digital receipts and marketing campaign materials, and credit card details for customers who opt to sign up for automatic payments. Customers also have a platform for leaving feedback whenever needed.
Square makes it easy to manage your customer data including the ability to bulk upload your customer list from a CSV file.
(Source: Square)
Square Payments Ease of Use
Square Payments integrates with Square POS, Square Retail, and Square Restaurant for a more streamlined purchasing and payment processing experience. It also integrates with WordPress, Wix, WooCommerce, and Ecwid for web builders and Zoho Books and QuickBooks for accounting platforms. Payment APIs are also available for users who prefer to use Square Payments with their current website, either by building their own Square checkout page or redirecting buyers to a Square-hosted checkout page.
Other areas of ease of use include:
What Users Think of Square Payments
Square Payments users have mostly positive things to say about the platform. Overall, they agree that it is convenient and easy-to-use since they can take payments, create invoices, and manage their business operations all in one place.
- Capterra: More than 1,800 users rated Square Payments an average of 4.7 out of 5 stars.
- G2: Over 120 users rated Square Payments an average of 4.6 out of 5 stars.
On the other hand, there is a handful of negative feedback about the platform. The most common downsides mentioned by users are the need for better customer service and additional customizations and that transaction fees can be quite expensive. If your business requires more customized features (beyond what’s available in Square’s retail, restaurant, and appointment software) and processes high-volume transactions, Square is likely not a good fit for you.
Users Like | Users Don’t Like |
|---|---|
Easy-to-use platform | Lacks ideal customization in the free plan |
All-in-one Square Dashboard | Can be expensive for businesses with high transaction volumes |
Good value, reasonable fees | Invoicing issues on the mobile app |
Convenient mobile payment processing | Hard-to-reach customer phone support |
Bottom Line
Square Payments is a free, membership-based payment platform perfect for small businesses selling online, in-store, and on-the-go. It doesn’t require an approval process, so users can simply start accepting payments after setting up their merchant accounts. Aside from zero monthly fees, Square Payments also come bundled with notable features—such as fraud prevention, automated chargeback disputes and management tools, free invoicing, ecommerce integration, next-day funding, and an all-in-one management dashboard. Visit Square to create a free account to test it out.
Need Help Getting Started?
- Follow our step-by-step guide to signing up with Square
- Then, follow our tips on using Square to process credit card payments and run your business.
