Square Payments Review 2026: Fees, Pricing, & Alternatives

Square Payments is Square’s built-in payment processor for in-person, online, and mobile sales. I like its combination of free POS software, invoicing, online payments, and chargeback management, which lets small businesses handle several sales channels in one account. Setup is straightforward, although accepting card payments requires successful account activation and identity verification. 

Square now offers three unified software plans: Square Free, Square Plus, and Square Premium, starting at $0. In my evaluation of merchant service providers, Square earned an overall score of 4.49 out of 5 for its free POS software, payment options, and competitive transaction fees. 

It’s best for new and small businesses that want simple, all-in-one payments. Its main drawback is the possibility of payout delays or reserves following an account review. User ratings are positive overall: Square Payments holds 4.7 out of 5 on Capterra and 4.5 out of 5 on G2.

Why you can trust Fit Small Business

I have spent more than seven years evaluating payments, POS, and ecommerce tools, including attending Square product demonstrations. For this update, I checked Square’s official pricing, payment features, hardware, transfer options, support policies, and account terms. I also reviewed the Capterra and G2 pages linked in the original draft for current ratings and customer feedback. Fit Small Business uses a structured evaluation rubric covering pricing and contracts, payment types, account features, and expert assessment. I use those criteria to explain where a provider offers good value and where another option may better serve a small business. Agatha Aviso Retail Software Expert at Fit Small Business

Square Payments overview

Why I like Square Payments

Among different merchant accounts and payment providers, Square Payments offers the most convenient way for new and small businesses to start accepting payments. Square Free has no monthly subscription fee, and Square does not charge activation or chargeback management fees. Account activation and identity verification still apply. To top it off, the free POS app and online payment solution offer excellent value, and the entire system is incredibly easy to use. 

Square also offers the best POS software for small businesses, with a free plan available to Square Payments users. It is also one of my top picks for best multichannel POS systems. To learn more, read my Square POS review.

Overall, Square Payments is an outstanding choice for small merchants and startups looking for simple payment processing. For owners comparing Square payments for business, the main advantage is having payment acceptance, sales reporting, and core business tools connected from the start.

Learn more about Square 

When to use Square Payments

• New businesses keeping startup costs low: Square Free includes payment processing and core POS tools without a monthly software subscription.
• Businesses selling through several channels: Square connects in-person and online sales with inventory and reporting.
• Mobile sellers: Compatible smartphones can accept contactless payments through Tap to Pay.
• Service businesses: Invoices, estimates, recurring billing, and payment links support remote payment collection.
• Businesses planning to add tools: Paid plans add advanced functions and lower processing rates for eligible payment types.

Square Payments alternatives & comparison

When to use Square Payments alternatives

Square Free has an in-person processing rate of 2.6% + 15 cents per transaction, which may not be the ideal solution for large-volume businesses. Merchants with over $250,000 in annual processing may apply for custom pricing, while other cheaper credit card processing companies with an interchange-plus model may be a better option.

Square also charges for instant transfers to an external bank account. Square Checking gives merchants immediate access to eligible sales revenue through their account and debit card, but instantly transferring that money to an external bank can still incur a fee. 

Square supports ACH invoice payments, including recurring bank payments, but businesses needing Level 2/3 card processing should compare other B2B payment solutions. Its standard service also restricts certain business categories. Instead, look to alternative high-risk merchant services providers if your business is ineligible. Eligible hemp-derived CBD sellers have a separate Square program, discussed below.

Alternatives at a glance

Compare Square with other alternatives in my guides:

• Square vs Shopify
• Square vs PayPal
• Square vs Payanywhere
• Square vs Wave
• Square vs Stripe
• Square vs Helcim
• Square vs Stripe vs PayPal
• Square vs Sumup

Square Payments reviews from users

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.

Current ratings checked for this update:

• Capterra: 4.7 out of 5 from more than 2,700 reviews.
• G2: 4.5 out of 5 from close to 180 reviews. 

The reviews I checked support Square’s appeal for straightforward payment collection. Reviewers describe easy setup, convenient invoicing, and the flexibility to take payments online or on the spot. Critical feedback includes processing costs, support access, and concerns about held funds. 

I agree that the connected tools are Square’s biggest strength. However, I would separate satisfaction with the interface from funding reliability: an easy checkout process does not prevent account reviews or payout restrictions. I would also compare total processing costs before choosing Square for a high-volume business.

Square Payments pricing

Pricing and contract score: 4.31 out of 5

Square Payments comes built into Square’s payment and POS tools, with no monthly software fee on Square Free. It also comes with a free first magstripe card reader and virtual terminal so new businesses can start accepting payments without purchasing a full POS system. 

I awarded points for Square’s free plan, predictable processing rates, and lack of a required long-term software contract. Its pricing is less appealing for businesses that could save through interchange-plus pricing or automatic volume discounts.

Payment processing

Square Payments pricing now uses three plans: Square Free, Square Plus, and Square Premium. Each plan includes Square’s payment tools, with different monthly fees and processing rates.

Flat-rate transaction fee

These are standard US rates for the unified plans. Online API payments have a separate rate of 2.9% + 30 cents across all three plans. Existing sellers on legacy subscriptions should check their Dashboard for applicable fees. 

Volume discounts: Businesses processing over $250,000 annually can contact Square to discuss eligibility for custom pricing. Discounts are not guaranteed. 

The following table compares core plan differences:

Square’s paid plans bundle more tools, but some services still carry separate fees. Compare the specific features you need rather than assuming every Square product is included. 

The Square Free plan includes core tools for:

• Using the Square POS app
• Building a website and selling online
• Item and menu management
• Sending invoices and estimates
• Basic inventory and sales reporting
• Managing customer records
• Online booking
• Square House Accounts

For businesses comparing Square payment solutions, I would start with Square Free and upgrade only when the added tools or processing savings justify the subscription.

Other fees

Transfer fees are separate from payment processing fees. For example, accepting a card payment and then transferring the proceeds instantly can incur both charges.

For a breakdown of Square’s software pricing, see my Square pricing guide.

Hardware

Square card readers

Square POS systems

Hardware financing is subject to approval and availability. Square lists a 15% APR for its hardware credit sale plans, so installment totals can exceed the upfront purchase price.

To find out more, read my in-depth Square hardware comparison guide.

Contract & terms of service

Square does not require any long-term contracts for its standard software plans. You can cancel or switch plans, although hardware financing obligations are separate.

Square is a payment facilitator rather than a conventional standalone merchant account provider. Its terms state that merchants exceeding card network thresholds may need an additional Commercial Entity Agreement with Square’s acquiring banks. This is not a universal monthly processing cap.

Other stipulations within Square’s payment terms are:

• Certain business activities are prohibited or restricted.
• Applicable fees appear in Square’s published schedules or your Dashboard.
• Square may delay payouts or require a reserve, which it can adjust based on risk and other factors.
• Merchants are responsible for expired, declined, or disputed offline payments. Device-specific offline limits also apply. 

Square Payment Services Terms of Service

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.

Setup and application

Square Payments offers an easy sign-up but requires account activation and identity verification before you can accept card payments. When you sign up for your free Square account, follow the setup prompts to provide personal and business information, activate processing, and connect a verified transfer destination.

Some accounts can be activated quickly, while others require additional documentation or review. Square states that unsuccessful identity verification prevents card processing.

Square Payments new features

The following additions were highlighted in Square’s Square Releases Vol. 2, 2025. Note that these are Square’s announced updates, rather than features I independently tested.

• ACH manual entry: Eligible customers can pay invoices using their bank account and routing numbers, providing an alternative to signing in through their bank.
• Project management: Businesses can organize estimates, invoice status, linked documents, and customer communications around projects.
• Accept bitcoin: Square announced bitcoin acceptance with zero processing fees through 2026. Eligibility and regional restrictions apply, including no availability for New York sellers.
• Square AI Beta: The announcement describes conversational access to business insights and recommendations using business data, industry trends, and web search.

For service businesses, I find the ACH and project-management announcements especially relevant because they address payment collection and the work surrounding it. Availability and plan requirements should be checked in your account.

Square payment types

Payment types score: 4.75 out of 5

The available Square payment options include in-person cards, contactless wallets, online checkout, invoices, payment links, ACH bank transfers, and Afterpay. Instead of echeck payments, Square allows merchants to process ACH transactions. And while it does not have Level 2 and 3 processing, Square can offer custom pricing for eligible businesses processing more than $250,000 annually. 

Mobile payment

The Square mobile payment app works on both Android and iOS devices and includes the option to order a free first magstripe reader. Merchants can manually enter sale amounts or select items from their product library if inventory is enabled.

Square’s mobile app supports a wide range of payment tools, including in-person card payments, invoice payments, and Afterpay transactions. It also supports Tap to Pay on compatible smartphones, allowing you to accept contactless payments using only the Square POS app and your mobile device, with no additional hardware required.

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’s mobile apps. Additionally, you can use automatic payment reminders, invoice reporting, and recurring billing. Advanced invoicing features are also available for those wanting a more customized look, plus additional tools like multi-package estimates and milestone-based payment schedules. Feature availability depends on your subscription.

Card-on-file transactions

Square Payments allows you to process transactions automatically with its card-on-file feature. This is ideal for recurring payments and subscription billing. 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.

Customers must authorize storing and charging their payment method. Square stores payment data securely, but merchants still need to protect account access and follow the required consent process.

ACH payments

Square allows merchants to accept ACH payments as an option for completing invoice transactions. It requires a $1 minimum and charges a standard 1% fee for each transaction. Square Plus and Square Premium cap invoice ACH fees at $10, while Square lists $0 processing fees for ACH payments deposited into Square Checking.

Square’s ACH product page states that funds typically arrive in your Square account in two to three business days. That is separate from any subsequent transfer to an external bank. 

Square supports invoice deposits, payment schedules, and partial-payment settings. ACH is also supported for partial invoice payments through its Invoices API.

Buy now, pay later (BNPL)

Square users are able to offer BNPL payment options to their customers with Afterpay. For eligible Pay in 4 purchases, customers pay in four interest-free installments over six weeks, while you receive the full sale amount upfront, less applicable fees.

There are no monthly or setup fees to enable Afterpay with Square. The transaction fee is higher than regular transactions at 6% + 30 cents. Afterpay is available with Square for both online and in-person payments, subject to business eligibility and customer approval. Afterpay is not supported offline.

Ecommerce

Square Payments enables you to sell your products online, manage shipping and delivery, offer curbside pickup, and set up discounts and gift cards. If you're an online merchant, you can build and publish an online store, even without coding knowledge, by accessing Square’s website builder. It also integrates with popular web builders, such as WooCommerce for WordPress and Wix. 

Square now refers to Square Online as “websites.” The offering continues to support online stores connected with Square POS.

Square is easy to use but doesn’t offer many customization options. If you want a more flexible ecommerce payment solution or one with developer tools for custom checkout, consider Stripe. See how Square compares to Stripe.

Square Payments features

Features score: 4.19 out of 5

Square offers a wide range of business management and software tools and integrations, with core tools available free. It even offers proprietary, industry-grade hardware in installments, and I find this accessibility a huge plus for small businesses and startups working on a budget. However, you’ll need to pay an additional fee if you want an eligible same-day or instant transfer to an external bank. Square’s phone support also depends on your plan.

Square POS software

The Square payment platform connects with Square POS, but you do not need to operate an in-person POS to use its processing. You can also accept payments through invoices, payment links, virtual terminal, and supported ecommerce or API integrations. 

The tools are packaged into three plans: Square Free, Square Plus, and Square Premium. All plans include core POS and payment features, while paid plans add more advanced tools and lower in-person processing rates.

Square software pricing:

• Square Free: $0 per month per location
• Square Plus: $49 per month per location
• Square Premium: $149 per month per location

CBD program

Eligible businesses selling hemp-derived CBD products can apply to Square’s CBD program. This requires a separate eligibility review, so sellers should confirm their products and applicable processing rates with Square before accepting payments.

Square’s developer documentation publishes these CBD rates:

Payment method	Fees
Card-present payments through supported Square Terminal or Reader integrations	3.5% + 10 cents
Card-not-present payments through those supported integrations	4.4% + 15 cents
Ecommerce	3.8% + 30 cents

These specialized rates differ from standard Square Free, Plus, and Premium pricing. Confirm your applicable fee schedule rather than assuming standard rates apply to CBD sales.

Customer relationship management (CRM)

Unlike other software that offer CRM as an add-on, the Square customer management tools come built-in. You are given access to the customer directory, where you'll find customer profiles and contact information for use in marketing, analytics, and more. This is where you manage customer details and associated purchase information.

Paid marketing tools and advanced customer engagement features may depend on your subscription. Customer consent is also required for the relevant marketing or stored-payment functions.

Fund deposits

Money is credited to your bank account as soon as the next business day, subject to Square’s cutoff times, bank processing, weekends, and holidays. ACH invoice payments typically take two to three business days to reach your Square account.

For an extra fee of 1.95%, you may opt for eligible same-day or instant transfers to your bank account or linked debit card. Transfer limits and eligibility requirements apply. 

Another way to get immediate access to eligible sales revenue is with a Square Checking account. Merchants with Square Checking get a debit card and can spend available funds without first transferring them to an external bank.

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 House Accounts

Square House Accounts let you allow customers to charge purchases to a running account and pay later. This feature works well for businesses with repeat customers, such as restaurants, bars, salons, and service-based businesses.

With House Accounts, purchases are added to a customer’s balance and settled through Square Invoices, which can be sent on a recurring or scheduled basis. Payments can be collected by card or ACH, and balances are tracked directly in Square Dashboard.

You can set spending limits and lock accounts. Outstanding house account balances are settled through Square Invoices rather than directly at the POS. The feature has no monthly fee, but normal processing fees apply when customers pay.

Because you are allowing payment after the sale, I recommend using House Accounts with trusted, established customers.

Square payment security

Square includes security tools to help protect merchants and customers throughout the payment process.

Fraud protection

Square monitors transactions with the use of machine learning and human experts to catch anything that might be suspicious and fraudulent. Risk Manager provides additional fraud insights and controls for supported online payments.

Chargeback and dispute management

You can easily manage chargebacks and disputes from Square Dashboard. When a dispute comes up, Square sends a notification to inform you. You get to decide whether to accept the dispute as valid or to challenge it. If you choose to challenge the dispute, you will need to provide Square with the documentation related to the transaction. The card issuing bank determines the outcome.

Square does not charge a standard chargeback or dispute management fee under its published fee guide. However, you can still lose the disputed payment if the customer wins.

Data and hardware security

Square Payments maintains PCI compliance and encrypts card-present payment data from end to end. Merchants still need to secure their accounts, control staff access, and follow safe payment-handling practices.

Square Payments ease of use & customer support

I find Square’s connected tools useful for businesses that want fewer separate systems to manage. Accepting payments with Square lets a business connect checkout with sales records, customer information, and other supported tools.

However, ease of setup should not be confused with guaranteed approval or immediate access to every payment. Complete the activation process and review Square’s restricted-business policies before depending on it for sales.

Customer support

Square offers multiple support channels, but the level of access depends on your plan. All Square users can access chat and email support, along with Square’s extensive online help center, guides, and community forums.

Phone support varies by plan:

• Square Free: Phone support is available Monday to Friday, 6 a.m. to 6 p.m. PT, but only during the first 90 days after signup.
• Square Plus: Phone support is available Monday to Friday, 6 a.m. to 6 p.m. PT, with no 90-day cutoff.
• Square Premium: Includes 24/7 phone support, making it the best option for businesses that need around-the-clock phone assistance. 

Sign in to your account to access the support options available to you. Square’s automated Support Assistant may respond first and route you to a live agent when available. While Square’s self-service resources are strong, limited phone availability on lower-tier plans may be a drawback for businesses that rely heavily on live support.

Square Payments expert score

4.69 / 5

Square has always done well in my evaluations because it allows new merchants to start their business with the least, even zero, upfront software cost. It offers very competitive pricing as an all-in-one solution for flexible POS software, extensive business management tools, hardware, and versatile payment processing.

My main concern is how the value changes as a business grows. A high-volume business may pay less with another processing model, while businesses needing advanced tools should compare paid-plan and add-on costs. Square also requires a Square account and supported tools or integrations, even though running its in-person POS is optional.

Other than that, I find Square Payments an outstanding payment processing solution.

How I evaluated Square Payments

For this update, I checked Square’s official US pricing, product documentation, hardware pages, support policies, release announcements, and payment terms. I also reviewed the Capterra and G2 pages linked in the draft. I retained the supplied scores rather than conducting a new scoring exercise.

I compare pricing methods, identifying providers that offer zero monthly fees, pay-as-you-go terms, and low transaction rates. I then evaluate them according to a range of payment processing features, scalability, and ease of use.

The result is my list of the best overall merchant services. However, I adjust the criteria when looking at specific use cases, such as for different business types and merchant categories. This is why every merchant services provider has multiple scores across Fit Small Business, depending on the use case you are looking for.

My overall merchant services evaluation uses the following criteria:

Pricing and contract: 25%

I awarded points to merchant account providers that don’t require contracts and offer month-to-month or pay-as-you-go billing. Additionally, I prioritized providers that don’t charge hefty monthly fees, cancellation fees, or chargeback fees and only included providers that offer competitive and predictable flat-rate or interchange-plus pricing. I also awarded points to processors that offer volume discounts and extra points if those discounts are transparent or automated.

Square Payments received 4.31 out of 5 in this section. Its free plan and predictable rates are strengths, while custom discounts require contacting Square rather than being automatically applied.

Payment types: 30%

The best merchant accounts can accept various payment types, including POS and card-present transactions, mobile payments, contactless payments, ecommerce transactions, and ACH and echeck payments, and offer free virtual terminal and invoicing solutions for phone orders, recurring billing, and card-on-file payments.

Square Payments received 4.75 out of 5 in this section. I also looked for Level 2 and 3 payment processing, which Square does not support.

Account features: 25%

I prioritized merchant accounts with free 24/7 phone and email support. Small businesses also need fast deposits, so payment processors offering free same- or next-day funding earned bonus points. Finally, I considered whether each system has affordable and flexible hardware options and offers any business management tools, like dispute and chargeback management, reporting, or customer management.

Square Payments received 4.19 out of 5 in this section. Phone support restrictions on lower-tier plans and fees for faster external transfers are limitations to consider.

Expert score: 20%

I judged each system based on its overall pricing and advertising transparency, ease of use, including account stability, popularity, and reputation among business owners and sites like Better Business Bureau. Finally, I considered how well each system works with other popular small business software, like accounting, point-of-sale, and ecommerce solutions.

Square Payments did well in this category, only missing partial points for ease of use and integrations.

Frequently asked questions (FAQs)

Here are some of the most common questions we get about Square Payments. Expand the sections below for more.

Bottom line

Square Payments is a payment processing platform with a free software plan and connected POS, invoicing, and online selling tools. It is a strong option for small businesses selling online, in-store, and on the go that complete its account activation requirements.

Aside from zero monthly software fees on Square Free, Square Payments also comes bundled with key features you’ll find in most paid payment processing alternatives. This makes Square Payments one of my highly recommended providers for merchants looking for a quick and no-fuss solution to get their business up and running. Visit Square to create a free account to test it out.

Related articles

• Square POS review
• Square fees and pricing guide
• Square vs Stripe