Square Payments Review 2023: Fees, Pros, Cons & Alternatives

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, or payment card industry (PCI) fees.

• Flat-rate transaction fee: 2.6% + 10 cents per transaction, 2.5% + 10 cents when signed into a Square for Retail Plus account on the Retail POS
• 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 Card Readers

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
Buy Magstripe Reader	Buy Contactless and Chip Reader

Square POS Systems

Square Terminal	Square Register	Square Stand
$299 or $27 per month for 12 months	$799 or $39 per month for 24 months	$149 or $14 per month for 12 months
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	All-in-one credit card machine with POS, and built-in card reader
Buy Square Terminal	Buy Square Register	Buy Square Stand

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.

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Square Payment Services Terms of Service

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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 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 take 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)

The Square payment app for mobile 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)

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. Additionally, you can use automatic payment reminders, advanced 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.

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)

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.

Square allows merchants to accept ACH payments as an option for completing invoice transactions. It requires a $1 minimum and charges a low 1% fee for each transaction. However, while this payment method is significantly cheaper, note that it takes 3–5 business days to process an ACH bank transfer. It also does not support partial payments.

You can add ACH bank transfer as a payment method on your invoice transactions from both the mobile app and on your desktop. (Source: Square)

Square users are able to offer BNPL payment options to their customers with Afterpay. 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.

There are no monthly or setup fees to enable Afterpay with Square. The transaction fee is slightly higher than regular transactions at 6% + 30 cents. Afterpay is available with Square for both online and in-person payments—a feature that is not often available with other processors.

Square Payments enables you to sell your products online (on social media and ecommerce stores), 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 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 many 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.

Square Payments is exclusive to merchants using the Square POS software. The basic plan starts at zero and with the option to upgrade to industry-specific paid plans priced at $60 per month. There are also optional add-ons and advanced tools for building out your POS as your business grows.

Square Software Pricing

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 US. However, expect sign-up requirements and transaction fees to be slightly different, with higher payment processing due to the risk involved.

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 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)

Money is credited to your bank account as soon as the next business day, while ACH payments are processed in 3–5 business days. For an extra fee, you may opt for same-day or instant transfers to your bank account, similar to PayPal.

Another way to get instant access to your funds is with a Square Checking account. Merchants with a Square Business Checking account get a debit card and instant access to their funds. which also comes with a debit card.

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)

Need free inventory management tools? Square’s inventory management feature is also easily accessible from the Square dashboard or through the Square POS app. Among its capabilities are downloadable reports, stock alerts, and multilocation inventory management. Learn more about Square inventory management in our guide.

Fraud Protection

Square monitors transactions with the use of machine learning and human experts to catch anything that might be suspicious and fraudulent. You get notified about any unusual transactions.

Chargeback & Dispute Management

You can easily manage chargebacks and disputes from the 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 bank will then make a decision on whether the transaction was fraudulent or legitimate. Best of all, Square does not charge any fees for disputes filed by customers.

Data & Hardware Security

Square Payments keeps your customers’ data safe and secure, and it is PCI-compliant. Aside from this, all data that goes through Square’s hardware and software are encrypted from end to end.

Customer support is one of the few downsides to using Square Payments. Only active accounts are given access to phone support, and even then, you will require a customer code when calling. You will need to log in to your account to get a “Call Support” option, including your own customer code.

However, if your account is active, you can also access support through chat in the Square POS app—a handy feature. Square’s phone customer support is available from 6 a.m. to 6 p.m. Pacific time, Monday through Friday.

Yes, aside from being an all-in-one POS and payment solution, Square Payments is a great option for small businesses because it does not require a long application process, and setup is so easy that you can complete your application and start accepting payments in minutes. Follow our step-by-step guide to signing up with Square.

Square is a household name in POS software and payment processing for small businesses. It’s easy to use and offers flexible POS and payment features. User reviews from different sites give Square an above-average overall score. Maximize Square’s features and make sure it works for you with our tips on using Square.

Payments accepted through Square are processed instantly, and even work without an internet connection. Funds are deposited into your bank account on the next business day, same-day with an additional fee, or instantly to your Square Checking account, if you have one.

Larger businesses may find Square’s POS and payment features limited. For one, it does not have level 2 and 3 processing available for B2Bs. It also does not work with other POS systems and does not support high-risk merchants. If these are deal breakers for you, check out our list of top alternatives for Square.

Square Payments is often compared to Stripe and PayPal because it supports similar business sizes and offers similar payment services. Learn more about how Square stacks up against Stripe and PayPal.