What Is Square? How Square Works & Why Small Businesses Love It

Square is a mobile payment company that also offers a suite of business software, payment hardware products, and small business services. Unlike most payment processors, Square is available to businesses of all sizes and offers the most comprehensive free point-of-sale (POS) system on the market. As a result, millions of businesses use Square as part of their day-to-day operations.

Square was founded in 2009 by Jack Dorsey (a co-founder and CEO of Twitter) and Jim McKelvey. After several rounds of private funding, Square went public in 2015. In 2018, Square acquired Weebly, a web-builder and hosting service, which allowed Square to dive into e-commerce products to compete with other platforms like Shopify and PayPal. Today, Square is a publicly-traded company under the ticker symbol SQ. The Square payment and point-of-sale app has been downloaded more than 33 million times and has more than 2 million active sellers.

For any small business processing less than $10,000 per month, Square is the best POS and payment processing solution because it comes with no fixed monthly costs and offers an incredible value with the free POS system. Visit Square to create your free account.

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Square’s Services: Why Small Businesses Love It

Square is aptly named after their square-shaped mobile card reader.

Square is the original mobile payment processing app and card reader. When first launched, it had high adoption rates because Square allowed businesses to accept card payments anywhere, instead of having to rely on cash or peer-to-peer payment apps. Unlike most credit card processing companies, Square does not require an application or approval process and has no monthly fees or minimum requirements.

Flat Rate Credit Card Payment Processing

You can use Square to complete credit card transactions in your bricks and mortar store, as well as online and on the go via your mobile device.

Square charges a flat rate price per credit card transaction. This means that the credit card company fee, customer’s bank fee, and merchant account processor fee are all wrapped up into one flat-rate fee. This is regardless of the type of card you are processing.

The advantage of this pricing model is its simplicity. You don’t have to worry about figuring out how much you are paying in credit card processing fees because you know in advance exactly how much you’re going to pay. It’s the same flat rate no matter what type of card your customer uses.

Square POS and Other Software

Square offers a free POS app that can be downloaded onto iOS and Android smartphones and tablets or used with one of Square’s proprietary hardware products. The free user-friendly app has an offline mode, making it suitable for both mobile and in-store sales.

In addition to the standard free POS app, Square also offers free and paid POS software subscriptions for retail, restaurant, and appointment-based businesses. Each POS software product includes features for payment processing, inventory management, basic employee management, customer relationship management (CRM), reporting, and analytics.

Square’s add-on software options include payroll and team management, customer loyalty programs, and marketing. Square also integrates with other software solutions popular with small businesses including account tools like QuickBooks.

Other Square Services

Square offers additional online business and ecommerce tools including a product photo service, developer APIs, and a risk manager for monitoring fraud. Square also offers banking and financing services including a loan program called Square Capital and business debit cards.

For individuals looking to send and receive money, Square has a Cash App, which is similar to Venmo, and designed for free peer-to-peer payments. Cash App can also be used to process ACH deposits like paychecks, buy and sell stocks, and buy and sell bitcoin.

Square Hardware

Square offers payment processing hardware products including mobile card readers, iPad stands with built-in card readers, touch screen registers, and countertop terminals. The company also sells customer-facing display options, hardware bundles, and accessories like cash drawers, bar code scanners, and receipt printers.

Most Square card readers can connect to the internet via Wi-Fi or Ethernet and have built-in batteries to operate cordlessly. Most of Square’s payment processing hardware can also accept contactless payments, and connect to accessories like cash drawers through a USB hub.

Bottom Line

Square has become the go-to solution for pay-as-you-go flat-rate payment processing. Every year, Square continues to enhance the features of its free POS software, including solutions specifically designed for retail, restaurants, and appointment-based businesses like salons, in addition to its generic small business POS.