Square is a free point-of-sale (POS) app that uses a credit card reader and your phone or tablet to process payments. A POS system is the tool retailers use at the point of purchase to process and manage sales. Square POS includes features like inventory management, customer directories, and sales reports to help retailers manage their business.
Square’s free POS tools and flat-rate card processing are a great value for small businesses. With Square, businesses can sign up and start selling in minutes without any applications, contracts, startup, or monthly fees. To use Square, sign up for a free account on its website, download the app on a tablet or smartphone, connect a card reader, and start selling. Create a free account and we’ll walk you through the process in this article.
How Does Square POS Work?
Square is a free app that you download on your iOS or Android device, which, along with a mobile credit card reader or virtual terminal, allows you to accept credit cards from customers. When you create your Square account, you will connect your bank information so that funds from credit card payments get deposited within a few business days.
To actually accept payments with your phone, you use one of Square’s card readers. When you sign up for Square, you receive a free magstripe card reader in the mail that plugs right into your headphone or Lightning charger port. There are also chip and contactless payment readers available that connect via Bluetooth. Contactless payments are eWallet payments—like Apple Pay, Google Pay, and Samsung Pay—that allow shoppers to pay with their phone using stored card or bank data.
In addition to payment processing, manage products and customers through the app or on the web-based Square Dashboard. You can also view reports and manage your free online store.
Who Square POS Is Right For
Square POS Pros
Square POS Cons
Minimal customization options
Fast setup, easy to use
Basic reporting tools
Add-on features to grow with your business
Account stability issues (payment processing can be frozen if Square detects unusual activity)
Additional retail, restaurant, and service industry options
Limited phone support
Free online store and website
Multiple affordable hardware options
Square is best for small and startup businesses that are either just starting out or processing under $20,000 per month in sales. Although Square does offer custom rates for businesses processing over $250,000 annually, it’s likely that as an established business processing more than $10,000 monthly, you can find cheaper credit card processing through a traditional merchant account.
Square POS is especially right for:
- Cafes and coffee shops: Square’s payment processing rates are very low for any business that has an average sale under $20.
- Startup businesses: Square has no minimum processing requirements or upfront costs; if you don’t make any sales, you don’t have to pay anything.
- Food trucks: Square can process credit cards offline, so it’s a great fit for businesses that move around.
- Market vendors: Offline sales capabilities and no minimum transaction requirements or monthly fees make Square a great option for people who sell at flea markets or the occasional craft fair.
- Sole proprietors: Square allows massage therapists, hairstylists, makeup artists, handypersons, and other individuals an easy option for accepting card payments on the spot.
- Small storefronts: If you just need an easy way to accept payments, Square’s free POS software and predictable fees offer unparalleled value.
- Order-ahead and curbside pickup: Square POS comes with a free online store for integrated online ordering. Most other POS systems with this capability start around $100 per month.
To learn more about Square POS features, read our detailed Square POS review. If you’re ready to get started, visit Square and follow the steps below to set up your free account.
How To Set up a Square POS Account in 10 Steps
The first step in using Square POS is actually setting up a Square account. Many business owners worry about how to set up a POS system because some solutions require professional installation, separate merchant account applications, or other lengthy and expensive processes.
However, with Square, the process is very fast, and once you complete each step, you can start setting up your store and selling right away—there is no waiting to be approved. Plus, any information that you enter at signup can be changed later on, so don’t sweat the details.
1. Sign up for a Free Square Account
Visit Square’s website and click “Get Started.” Then the below screen will appear. Enter your email address, create a password, and select your country. Then continue on to the next step.
Tip: Choose a secure password with numbers and symbols because you will also need to enter your banking information and Social Security number.
2. Select “Quick” or “Full” Setup
If you are looking to just quickly accept orders and payments online or in-person, Square has an express setup. If you want to walk through all of Square’s available features, choose the full setup. All features and settings can be adjusted anytime in the Square Dashboard, so don’t worry if you want to change anything later on.
For this demo, we chose “Quick” setup.
3. Enter Your Business Name
If you don’t have a business name, that’s OK! Just type something your customers will recognize, such as your personal name. This name is what will appear on your receipts and on your customer’s bank charges. During setup, I learned that you will need to keep your business name to 40 characters or less.
Tip: After creating your login, if at any point you accidentally close out of the Square screen, your session times out, or you click the refresh button, you will resume setup through your Square Dashboard. There will be prompts to walk you through any missing information.
4. Choose Your Business Type
On the next screen, you will need to select what kind of business you run. Options include:
- Clothing and accessories
- Specialty shop
- Outdoor markets (retail)
- Food truck/cart
- Outdoor markets (food and drink)
- Art, photo, and film
- Jewelry and watches
- Furniture/home goods
- Hobby shop
- Events/festivals (casual use)
- Outdoor markets (casual use)
- General contracting
- Independent stylist
- Charitable organization
- Hair salon/barbershop
Square asks you to pick your specific business type because there are free software options for different needs. Standard Square POS is great for occasional or general use. There are dedicated retail, restaurant, and appointment-based options. Within each software, there are also different templates and settings for even more specific business types such as events or catering.
5. Choose How To Accept Payments
Every account comes with the default option to ring-up in-person sales through the POS app. You can also opt to set up a virtual terminal, invoicing, online sales, and donations for free.
Gift cards and email marketing are available at an extra cost. Any of these features can be added, adjusted, or removed at any time.
With Square Online, “sell online” means more than just ecommerce sales. Choosing this option allows you to offer order-ahead, curbside pickup, and contactless in-store ordering with QR codes.
I recommend that most businesses choose the sell online add-on because:
- It’s free (Square Online is free with every Square POS account)
- Pickup orders reduce in-store crowding
- More options allow customers to shop according to comfort levels and preferences
For information on pricing for different add-ons and upgrades, read our Ultimate Guide to Square Fees & Pricing.
6. Verify Your Identity
Even though Square doesn’t have an application process for merchant services, it still needs to verify your identity before you can process payments. The process is instant, you’ll just need to provide your name, address, birthday, phone number, and Social Security number. And, don’t worry, there is no credit check involved.
7. Select a Business Location
After entering your personal identification information, choose where your business will be operating: home, on-the-go, or a separate location.
8. Select a Deposit Speed
When setting up your deposits, you can also choose how fast you want to be paid. There are two options to choose from:
- Next business day: Your funds will be deposited within one to two business days free of charge.
- Same-day: Receive your funds instantly at the close of your business day for a 1.5% fee of the total deposit amount.
You can adjust deposit options and schedules at any time in your Square Dashboard. Deposits can be scheduled or manually pushed through. So, even if you opt for scheduled, free next-day deposits, if you ever need funds right away, you can push through a same-day deposit for a 1.5% fee through the Square Dashboard.
9. Link Your Bank Account
Connect the bank account where you want to receive the deposits. To verify your account, Square will withdraw, then redeposit a one-cent charge. Verification can take up to three business days. Until your bank account is verified, any funds from sales will be held in your Square Balance.
10. Set up Add-ons
Remember in Step 5 where you selected additional payment methods, like online payments and invoices? The last step is setting those up. If you chose “Sell online,” you’ll be able to pick from four options: a single shopping page, shoppable Instagram page, full website and online store, or checkout links.
This selection is not permanent and can be changed at any time. If you’re not sure what you need, Square has a prompt to help you decide. It will ask if you have an existing website, how many items you sell (a few or a lot), and to choose a statement that best describes what you want. If you’re not sure, Square recommends opting for a single shopping page, which you can always expand later.
If you want to set up a full website and online store, we walk you through the process in this guide: How to Set Up a Free Square Online Store.
How To Get Started With Square POS
After creating your account, you can choose POS hardware, configure your product and service lists, adjust business settings (like taxes and operating hours), and begin accepting payments.
Choose Your Square Hardware
It’s possible to use Square POS without purchasing any additional hardware. You can key-in orders on your phone using the POS app or through the virtual terminal on Square Dashboard. If you set up Square Online, you can also set up QR codes and online payments.
Every new Square account also comes with a free magstripe reader that will arrive in the mail. When signing up, you can choose between a lighting or audio jack connection.
However, if you plan on accepting in-person payments, I recommend purchasing at least a chip card reader. Chip (EMV) and contactless (NFC) payments are more secure than magstripe. Plus, processing fees are significantly lower for card-present transactions (swipe, chip, and contactless) vs typing in the card information.
Square Card Readers
Square Reader for Magstripe
Square Reader for Contactless and Chip
Square Stand for Contactless and Chip
First free, additional $10
$169 or $16 per month for 12 months
Available with lightning or audio jack input. Accepts payments via magstripe (swiped).
Connects via Bluetooth. Accepts payments via EMV (chip), or NFC (Apple Pay, Google Pay).
Connects via Bluetooth and accepts EMV and NFC payments. Optional receipt printer, cash drawer, and bar code scanner.
Best for: Occasional mobile sales
Best for: All-purpose payment processing
Best for: Using iPad for a countertop POS
Square Full POS Systems
$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
Full POS with touch screen monitor, detachable customer-facing display, and credit card machine
Best for: Any business looking to upgrade from a standard credit card terminal or wanting a portable POS machine.
Best for: Retailers, boutiques, specialty shops, or cafes wanting a sleek countertop system.
Set up Your Product List
There are two options for setting up product lists in Square:
- Create individual items
- Import items in bulk
If you only have a few products or are just starting out as a new business, you can go ahead and add products individually.
If you have an established business and/or a lot of SKUs to manage, you can save a lot of time by uploading in bulk. To do so, you’ll need to download Square’s template from the Item Library section of Square Dashboard. Then, fill it in with your current product list, and upload it to Square.
To learn more about managing products in Square, read our full step-by-step Square Inventory guide.
Adjust Store Settings
The Accounts & Settings section of your Square Dashboard is where you can change your business name, edit bank account information, set up custom email notifications, manage transfers and deposits, customize your receipts, view tax forms, create contracts (such as credit card authorization forms), and manage hardware.
Manage Team Permissions
In your Square Dashboard, under Accounts & Settings > Security, you can enable Team Permissions. This allows you to set up restrictions for team members on a number of different functions, which will apply to all POS devices.
Adjustable team settings include:
- Using virtual terminal
- Cancel transactions
- Adjust taxes manually
- Void transactions
- View completed transactions
- View reports
- Add, edit, and delete customer data
Set up Email Notifications
Choose what reporting and transaction emails you want to receive and opt in or out of emails from Square. Square has options for daily, monthly, and annual sales summaries. However, you can’t customize the reports emailed to you.
Add your logo and brand colors, choose what information to display, add a return policy, and social media handles. I recommend adding itemized receipts, a clear return policy, and contact information.
Manage Tax Forms
Add your taxpayer information, including your business name and employer identification number (EIN). Square will automatically file 1099-K forms for you when you reach the earnings threshold ($20,000 or 200 payments in most states).
1099-K forms are what credit card processing companies submit to the IRS to report the earnings of its merchants. Once you cross the reporting threshold, you can view your 1099-K forms in the Square Dashboard.
If you set up payroll through Square, you’ll also be able to view your W2, 940, and other payroll forms in the Square Dashboard, which Square will also automatically submit for you.
Contracts are one of Square’s newest features. Within Square Dashboard, there are templates for:
- Credit card authorization forms
- Service agreements
- Sale of goods
- Completion of service
- Confirmation of delivery
- COVID-19 agreement
Contracts are not necessary for every brick and mortar business, but if you sell a service or expensive made-to-order goods, charge subscriptions or recurring billing, or offer retail delivery, they may be a good fit for you.
Add Financial Documents
Secure your Square account by providing additional business details. The more Square knows about your business, the better it can manage your merchant services in terms of fighting chargebacks and preventing processing limits.
Download the Square POS App
After downloading the Square POS app from the Apple or Google app store, log in to your account using the email and password you set up earlier. Immediately after that, you’ll be prompted through a test transaction.
1. Select a Product to Sell
When you’re ready to make a sale, select “Checkout” at the top of the left-hand menu. Then you can either enter a dollar amount or select the list icon at the bottom of the screen to ring up one of the preset inventory items you created. We recommend using this method if you have physical products with inventory to track.
2. Click the “Charge” Button
Once you have the transaction amount or appropriate products entered, simply click the “Charge” button, which will take you to the payment screen. At this point, you can also apply loyalty rewards or discounts.
3. Choose a Payment Option
There are multiple payment options to choose from. If you have a connected card reader, you can go ahead and swipe the payment card. You can also type in a card number or a gift card number, send an invoice, use a credit card stored on file, or accept cash or check.
4. Select a Receipt Option & Complete the Sale
Once you have completed the payment, Square gives your customer the option of what kind of receipt they would like. You can send an email or text receipt or simply select “No Thanks” if your customer doesn’t need a receipt. The system will store their email or number so that they don’t have to provide it every time they pay a vendor that uses Square POS.
Collect Customer Feedback
Once you’ve processed your first sale, you can start collecting customer feedback. On every digital receipt, customers will be able to rate their experience along with a reason. You’ll see this feedback immediately in your Square Dashboard or POS app. You can have private conversations with your customers on their experience, issue partial or full refunds, and see that customer’s history with your business.
From the Dashboard, you can view feedback trends so you can spot opportunities to improve. By having customers leave feedback from their receipt, business owners can respond immediately and privately, instead of learning about the customer’s experience from a public review site.
Want to learn more about POS systems? Read our guide on How to Use a POS System to Run Your Business.
Square for Retail
Square for Retail is Square’s industry-specific software for retailers. The main difference between Square POS and Square for Retail is that Square for Retail has a bar code-based user interface. And, while the entry-level Square for Retail POS software is free, businesses can upgrade to Square for Retail Plus, which has advanced inventory features (like purchase ordering, vendor management, and more detailed sales reports).
Square for Restaurants
Square for Restaurants is Square’s software designed specifically for the food and beverage industry. It includes features like menu management, order tracking, table management, coursing, seat timers, and more. Like Square’s other POS systems, the entry-level plan is free and the Plus version is $60 per month.
To learn more about Square for Restaurants features, read our Ultimate Guide to Square for Restaurants.
Square Appointments takes all the features of Square POS and layers on top an appointment and calendar management solution for service businesses such as spas, hairstylists, independent service providers, consultants, and personal trainers. Create an online booking website, collect deposits and cancellation fees, send automated appointment reminders, manage calendars, sell products, and accept payments.
Unlike the other Square POS products which offer different features between the free and Plus plans, the features in Square Appointments are the same across every plan—and the only difference is the number of bookable employees. It’s free for individuals and costs $50+ for teams.
Square is a free mobile POS and payment processing app that works on smartphones and tablets. Square makes money by charging flat-rate payment processing fees. In return, businesses receive a suite of free management features, a mobile POS, and competitive credit card processing rates.
It’s easy to set up a free Square account, and it’s even easier to process mobile sales. Best of all, Square is free to use and requires no commitment. Visit Square to set up your own account and test out the app for yourself.