Square helps small businesses take payments, manage sales, and run key parts of their operations from one platform. It is popular because it is easy to start, has transparent pricing, and supports in-person, online, and mobile selling. In this guide, I break down Square POS for small business, including how it works, its pricing plans and fees, its features and hardware options, its pros and cons, and its best use cases.
Key takeaways
- Square combines payment processing, POS software, and online selling tools in one system.
- It is a strong fit for small businesses that want low upfront costs and simple setup.
- Square offers a free plan, with paid upgrades for more advanced features.
- Businesses can use Square for in-store, mobile, online, and invoice payments.
- Larger sellers may want to compare Square with providers offering custom rates.
What is Square?
Square is an all-in-one commerce platform that lets businesses accept payments, run a point-of-sale system, sell online, send invoices, and use add-on tools like payroll, loyalty, marketing, and banking. It is designed for businesses that want payment processing and business software in one ecosystem.
It is especially popular with small businesses because it is easy to set up, offers a free entry-level option, and lets sellers add more tools as they grow, including invoicing, appointments, marketing, loyalty, payroll, and banking services. The Square payment and POS app has been downloaded over 33 million times and has more than 4 million merchant clients.
How does Square work?
Square starts with simple, flat-rate payment processing that includes credit cards, contactless payments, and ACH transfers. Then, it offers various products within its ecosystem that all work together to form a complete small business management solution. However, some solutions, like Payroll, can stand alone.
Square continues to add to its offerings for small businesses, from improvements to the software to new systems. More on what’s new below, but first, let’s dive into Square’s core features.
How much does Square cost?
Square’s software pricing is straightforward. It offers three main plans: Square Free at $0 per month per location, Square Plus at $49 per month per location, and Square Premium at $149 per month per location. Square also offers free trials for Plus and Premium, and says businesses can cancel or switch plans anytime.
For most businesses, the biggest Square cost is payment processing. For in-person payments, Square charges 2.6% + 15 cents on Free, 2.5% + 15 cents on Plus, and 2.4% + 15 cents on Premium. For online payments and invoices, Square charges 3.3% + 30 cents on Free and 2.9% + 30 cents on both Plus and Premium.
Plan | Monthly fee | In-person payments | Online payments and invoices |
|---|---|---|---|
Square Free | $0/location | 2.6% + 15¢ | 3.3% + 30¢ |
Square Plus | $49/location | 2.5% + 15¢ | 2.9% + 30¢ |
Square Premium | $149/location | 2.4% + 15¢ | 2.9% + 30¢ |
In general, Square Free is best for businesses that want to keep fixed costs at zero, while Plus and Premium make more sense for businesses that want more advanced features and lower card-present processing rates. Businesses processing more than $250,000 annually can contact Square about custom pricing.
See a full breakdown of Square’s pricing and fees.
What comes with Square?
Square includes more than payment processing. It combines software, hardware, and business tools into one ecosystem, so businesses can manage sales, customers, staff, and cash flow from a single account.
Payment processing
Square uses flat-rate payment processing, which means businesses pay a fixed fee per transaction instead of a mix of interchange, assessment, and processor fees. This makes pricing easier to understand and predict, especially for small businesses that want simple billing.
You can use Square to accept credit card payments online, in person, or on the go through a mobile device. In most cases, the rate depends on how the payment is accepted, such as whether the card is tapped, dipped, swiped, or keyed in.
Merchant services and remote payment tools
Square includes more than basic card acceptance. In addition to in-person and mobile payments, every Square account comes with tools for invoicing, online payments, virtual terminal, and chargeback management. This makes Square a practical option for businesses that sell across multiple channels or need flexible ways to get paid.
- Learn more about merchant accounts.
- Read our full Square Payments review to see if it’s right for you.
- Or, if you’re ready to start using Square, read our step-by-step guide on how to use Square to process payments.
POS software
Square’s POS software is one of its biggest selling points. Businesses can start with Square Free or upgrade to Plus or Premium if they need more advanced tools. The platform supports selling in person, online, over the phone, or out in the field, all from one system.
Square also offers industry-specific modes and tools for different business types. Its platform supports retailers, restaurants, beauty businesses, and service-based businesses, with features for tasks like inventory tracking, order management, appointment booking, reporting, and customer management.
Online selling tools
Square Online lets businesses create a website, sell products online, and offer services like shipping, pickup, delivery, or order-ahead. It can also support online booking for appointment-based businesses.
Compared to Shopify, Square’s advantage is that its system is compatible with all business types. Square Online includes a range of templates for retail, restaurant, event, appointment, and other business types. It automatically syncs orders, inventory, and customers with your POS, which you can also use to process curbside pickup, shipping, or local delivery orders.
Learn more in our Square Online review, or how to create a free Square Online Store in minutes with our step-by-step guide.
Add-on business tools
Beyond payments, POS, and online selling, Square offers additional business tools that merchants can add as needed. This lets businesses build a setup that fits their needs instead of paying for tools they may not use right away.
Some popular solutions include:
- Square Marketing: Square offers email and SMS text message marketing, including automations, segmentations, and personalization options.
- Square Loyalty: Customizable loyalty program that customers can enroll in right from the checkout screen or POS with automated rewards and messaging.
- Square Payroll: Track time, pay employees, manage benefits, and automatically file tax forms.
- Square Capital: Square offers small business loans of up to $100,000. This is only available for Square sellers but has fast approval and fast funding without a hard credit check.
- Square Banking: Business checking and savings accounts plus small business loans available right from Square Dashboard. No opening, minimum, overdraft, or account fees.
Square also has paid add-ons for team management, invoicing, gift cards, and advanced online sales. Check out our review of Square’s invoicing feature.
Customer engagement tools
Square includes customer-focused tools that help businesses drive repeat sales. These include marketing tools, loyalty programs, gift cards, customer directory features, and messaging tools that help merchants stay connected with their customers and personalize outreach.
For small businesses that want to keep more of their sales and marketing activity in one system, this is a notable advantage over providers that focus mostly on payments alone.
Staff and payroll tools
Square also offers tools for managing employees and paying staff. Depending on the setup, businesses can use Square for shifts, team management, payroll, and related back-office tasks. Square Payroll remains a separate paid add-on, but it integrates with the broader Square ecosystem.
This makes Square more useful for businesses that want a platform that supports both selling and day-to-day operations.
Banking and cash-flow tools
Square also includes banking features as part of its broader commerce platform. Square Banking is included with its newer Free, Plus, and Premium plans, and the company also offers tools tied to checking, savings, loans, and cash flow management.
Square hardware options
Square offers a range of POS hardware and equipment designed to facilitate point-of-sale (POS) transactions for businesses of all sizes. For smaller businesses, there are card reader options to securely accommodate magstripe, chip cards, and contactless payments anywhere.
On the other hand, Square’s advanced registers provide a complete point-of-sale solution, combining sleek hardware with easy-to-use software for streamlined operations. These registers come equipped with features such as touch-screen interfaces, integrated receipt printers, customer displays, and compatibility with peripherals like barcode scanners and cash drawers.
All of Square’s hardware and equipment come with data encryption and comply with industry security standards. We break down your options in our in-depth Square hardware comparison guide, but you can find the basic hardware below.
Square Reader for magstripe: Free
 | Square offers the first Square Reader for magstripe for free to users, and additional ones for $10 each. It connects to a mobile phone via the headset jack or the lightning connector to accept swipe payments using the free Square POS app. Best for: Businesses looking for a free POS setup. |
Square Reader for contactless and chip: $59
 | Square’s Reader for contactless and chip costs $59 and uses a USB-C charging port. It can also be paired with an optional dock for $15. The reader connects to a mobile device via Bluetooth and accepts tap and chip card payments through the Square POS app. Best for: Businesses selling on the go |
Square Stand: $149 or $14 per month for 12 months
 | The Square Stand is an all-in-one dock for iPads with Square POS software. The hardware comes with a built-in contactless reader and a USB-C port for connecting a Square Magstripe Reader. The base swivels 180°, allowing customers to add a tip or confirm their payment. Financing is available for qualified merchants at $14 per month. Best for: Small, independent businesses such as convenience stores, food trucks, and mom-and-pop shops. |
Square Kiosk: $149 or $14 per month for 12 months
 | The Square Kiosk is an iPad-based self-service ordering setup for quick-service businesses. Hardware starts at $149, while kiosk software requires a separate monthly subscription. Merchants can choose between an unmanned counter or a freestanding setup. Financing is available for qualified merchants at $14 per month — optional Bosstab Floor Stand at $299. Best for: Small, independent fast food and quick service restaurants. |
Square Terminal: $299 or $27 per month for 12 months
 | The Square Terminal is a standalone, all-in-one credit card terminal with a built-in Square POS app. It accepts swipe, dip, and tap payments and prints receipts. Financing is available for qualified merchants at $27 per month. Best for: Food trucks, tableside ordering, and trade shows. |
Read our full Square Terminal review or try it for yourself.
Square Handheld: $399 or $37 per month for 12 months
 | Square Handheld is a portable POS device with built-in payments, a barcode scanner, and a camera. It accepts tap and dip payments and is designed for tableside ordering, inventory management, and mobile checkout. Best for: Businesses that need a mobile POS for payments, orders, and inventory |
Square Register: $899 or $44 per month for 24 months
 | The Square Register is a fully integrated POS system with a customer-facing display equipped with a card reader. It accepts swipe, chip, and contactless payments, including Cash App. It easily connects with other Square hardware such as a cash drawer, receipt printer, kitchen printer, or barcode scanner. Financing is available for qualified merchants at $44 per month. Best for: Businesses needing a complete POS setup. |
See our full Square Register review, or try it for yourself.
Who should use Square?
Square is best for businesses that want an easy way to accept payments, manage sales, and run day-to-day operations from one platform. Its biggest strengths are low upfront costs, simple flat-rate pricing, and a broad set of built-in tools, which make it especially appealing to newer and growing businesses.
Square is a strong fit for:
- New and small businesses: Square’s free plan and simple setup make it easy to start taking payments without a large upfront investment.
- Retail stores: Square offers inventory tracking, barcode support, and synced in-store and online sales tools.
- Restaurants and food businesses: Square supports restaurant workflows like order management, online ordering, and kiosk or counter service setups.
- Salons and service businesses: Appointment booking, invoicing, and customer management tools make Square a practical option for appointment-based businesses.
- Mobile sellers: Square’s readers, Terminal, and Handheld work well for pop-ups, markets, food trucks, and businesses that sell on the go.
In general, Square is a good choice for businesses that value convenience and want payments, POS, online selling, and business tools in one system. However, it will not be the best fit for every business. Larger sellers, businesses with more complex needs, or merchants looking for custom pricing may want to compare Square with other options.
Square pros and cons
Square’s biggest appeal is its simplicity. It combines payment processing, POS software, online selling, and business tools in one system, with transparent flat-rate pricing and a free entry-level plan. However, that convenience will not be the best fit for every business, especially merchants that need lower processing costs at higher volumes or more robust support on lower-tier plans.
| PROS | CONS |
|---|---|
| Free plan with low upfront cost | Processing fees are not the lowest available |
| Easy setup and user-friendly system | Lower-tier phone support is limited to business hours |
| Flat-rate pricing is easy to understand | Support quality can vary |
| Built-in POS, online selling, and payment tools | May not be the best fit for larger or more complex businesses |
| Wide range of Square hardware and add-ons | |
Square alternatives
Square is one of the best all-in-one options for small businesses, but it is not the best fit for everyone. Businesses that want lower processing costs, deeper ecommerce tools, or restaurant-specific features may find a better match with another provider.
Provider | Best for | Monthly fee starts at |
|---|---|---|
Businesses that want interchange-plus pricing and lower processing costs as they grow | $0 | |
Retailers that want stronger ecommerce and omnichannel selling tools | $5 | |
Businesses needing an all-in-one solution with a dedicated merchant account | $0 | |
Online-first businesses that want more customizable payment infrastructure | $0 | |
Businesses needing a simple online and international mobile payment app | $0 |
See our additional head-to-head comparisons:
Or, check out our full list of the top Square competitors.
Frequently asked questions (FAQs)
These are some of the most common questions we get about Square.
Square offers a complete point-of-sale system solution. It provides POS software with built-in payments and an ecommerce platform that makes it easy for merchants to set up a business platform and start selling in minutes. Square also provides an array of POS hardware to fit any type of budget.
Yes, Square has no monthly fees and offers a month-to-month contract, so you can use Square even if you only sell occasionally, are a solopreneur, or are a member of an organization. The application process will allow you to specify that you are an individual using Square, and you can also choose a business type to specify the type of product or service you offer.
Once your Square POS is up and running, you will need to pay for the monthly use of the system. If you stay with the free POS software without any add-on services, you only have to pay for the transaction fees that would cost roughly around $250 per month for businesses that process below $10,000 in monthly credit card sales.
Both Square and PayPal offer POS software. However, Square is considered one of the top POS systems in the industry. Both also provide payment processing services, but Square supports more features for in-person and mobile payments. PayPal, on the other hand, offers stronger online payments and is better for international transactions.
The Square POS system comes with its built-in payment processing service, Square Payments. It allows Square businesses to accept credit and debit card transactions, as well as ACH. The beauty of Square Payments is that merchants do not need to apply for the service separately.
Bottom line
Square is one of the easiest ways for a small business to start accepting payments and managing sales from one system. Its biggest strengths are transparent flat-rate pricing, a free entry-level plan, and built-in tools for POS, online selling, invoicing, and business management. It is a strong fit for new and growing businesses, though larger merchants may want to compare Square with providers that offer lower custom processing rates. Visit Square to create a free account.
