Square Review – An Asset to Small Businesses
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Square is worth looking into if you need a way to handle your inventory and process sales and don’t want to spend too much time or energy getting things rolling at this stage in the game.
8/10
Cost
7.5/10
Ease of use
9/10
Features
8/10
Services
9/10
When I started a small arts organization, we ran a fundraiser with an in-person silent auction. Rather than handle large amounts of cash (or force our guests to run to an ATM), we used a payment processing system known as Square to handle payments for us. Square is super popular with small business owners, so the chances are that you’ve probably come across their point-of-sale system when visiting a local coffee shop or another boutique.
For me, what was so beneficial about Square’s magstripe reader is that it could easily be plugged into a headphone jack and give us point of sale (POS) functionality whether we were using the iOS or Android app. Using their card reader on a smartphone or iPad made handling the silent auction a breeze, with checkout and pricing taking only a few seconds for each attendee who won an auction item.
If you’ve been reading about the Square app online (perhaps at their website, squareup.com), you might wonder if the mobile payment processor is right for you and your business. Keep reading for an overview of Square and its pros and cons.
In this article
What is Square?
As a company with payment processing as part of its DNA, Square offers a few different product lines. For example, while its commerce and banking tools are some of its most popular features for small business owners, a Square account also gives you access to other e-commerce features, such as a customer rewards system. What started as a commitment to make credit card processing more straightforward for business owners has bloomed into a robust suite of customer support tools, inventory management, and even online booking through Square appointments.
While Square packs many features into its suite of products for merchant accounts, credit card payments and online payments for your online store will likely be the most common reasons to use Square. As such, Square is ideal for retail, restaurant, and other food and beverage operations. Thanks to the Square reader, Square stand, and Square terminal, you can find the right device for reading chip cards, debit cards, and even contactless payments.
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How does Square product work?
Signing up for Square is a pretty straightforward process. First, navigate to its website and click “Log in” in the top right corner. If you haven't yet created a Square account, you’ll be prompted to log in or sign up.
When creating your account, you won’t pay a dime at the start — and you’ll get a Square reader sent to you in the mail in just a few business days. The magstripe reader will allow you to turn your smartphone or iPad into a chip reader to begin accepting payments via your virtual terminal. If you want a higher-end Square register like you may have seen at your local coffee shop, you’ll need to upgrade your account.
Start by entering your email address and creating a password for your account. This is how you’ll log in to Square online. After setting up your account with those basic login details, you’ll be asked what type of merchant category you best fit in. If you’re a sole proprietor or use Square for a side project, you’ll want to select the “Individual” option. However, if registered as an LLC, corporation, charity, or partnership, you’ll want to select “Business.” You’ll also get to personalize what business name appears on customer receipts when processed with your Square account.
After selecting the proper merchant category, you’ll be prompted to provide more information about your business. This includes information like what kind of business you run (clothing, food and beverage, professional services) and the different ways that you want to be able to accept payments. Square lets you take payments in many ways, including point of sale, mobile payment, virtual terminal, online checkout, invoice, and more.
Square also helps personalize the options it gives you as a small business owner by offering extra services such as gift cards, loyalty programs, marketing tools, and a customer directory. If you aren’t sure whether or not you plan on using any of these features, you can click “none of these for now” and opt-in to these programs later as your business grows.
Square also offers business loans (via Square Capital) and appointment scheduling tools. Once you’ve decided which services and features you need, you’ll input information about your legal name and address to verify your identity. From there, you can link up your bank account and sell!
Related: Best credit cards for small businesses
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- Stock Recommendations that have beaten the S&P 500 by over 12% - Past 4 years & counting.
- Jargon-free market news with stock research, actionable in just 3-5 minutes.
- Data-drive analysis and personalized recommendations to empower you to make smarter investment decisions.
How much does Square cost?
How much you wind up paying for Square depends on a mixture of the software and hardware underpinning your business. Depending on your choice, you may have different processing, transaction, or monthly fees. Here’s a quick overview of some of the most common options.
Square POS Terminal and Square Reader
Square’s point-of-sale app is free. Your first magstripe Square reader is free, with each additional reader costing $10. However, if you want to use the Square portable POS terminal with built-in payments and receipt printer, you can expect to pay $299.
In terms of credit card processing, Square charges 2.6% + 10 cents on every charge, regardless of whether it’s tapped, dipped, or swiped.
Other forms of Square software
In addition to the free Square Point of Sale software, Square offers more specialized software in Square for Restaurants, Square Appointments, and Square for Retail.
- Square for Restaurants. Square for Restaurants is specifically designed for use in restaurant settings. It has three tiers: The basic version is free and is suited for small restaurants. If you have a bigger restaurant with multiple locations, Plus costs $60 monthly, giving you access to one countertop POS device per location. There's also a Premium plan that's only available if you process over $200,000 per year.
- Square Appointments. Square Appointments are free for individuals but cost $29 a month for Plus and $69 for the Premium plan. Additionally, processing fees vary. For credit card transactions, you’ll pay 2.6% + 10 cents as an individual and 2.5% + 10 cents for the other two plans.
- Square for Retail. Square for Retail comes in three price tiers: free, plus, and premium. The free plan is free, with processing fees of 2.6% + 10 cents for in-person transactions and 2.9% + 30 cents for online transactions. The Plus plan, which costs $89 per month, saves you a little money on in-person payment processing as it will only charge you 2.5% + 10 cents. The Premium plan involves custom pricing, and you would need to chat with Square phone support to learn more about how this customized solution fits your business's needs.
Other forms of Square hardware
If you want to beef up your POS system, you may be interested in a more robust piece of hardware for credit card processing.
- Square stand. A countertop Square stand costs $149.
- Square Terminal. The Square Terminal, which allows you to email or print receipts when processing payment, will run you $299.
- Square Register. The Square Register offers a complete solution for payment processing, including payment-processing hardware, software, and even an included tablet! This setup will run you $799.
Square features
Square has many features that make it a great choice for business owners running companies of all shapes and sizes. Here are just a few of the best features Square has to offer.
Professional hardware
Square’s hardware is solid, reliable, and easy to use. Whether using the magstripe reader or a higher-end option like the Square Register or Square Stand, you can put a professional foot forward with Square.
Scale at your speed
You can start with a magstripe reader and then graduate to more robust payment processing hardware like the Square Register. With Square, you can mix and match software and hardware solutions to run your business how you want and grow it when it makes the most sense.
Third-party integration
When running your online business, Square offers a variety of third-party integrations, so you aren’t stuck choosing between Square or your preferred web development solution. Square integrates with popular platforms like Wix, WooCommerce, QuickBooks, and more.
Straightforward pricing
While you can customize your solution depending on the software or hardware you want, credit card processing is straightforward with Square. This lets you price your goods better and run your business more effectively without leaving anything up to chance.
Who is Square best for?
Small business owners. Whether you’re running a coffee shop, thrift store, bakery, cafe, or hair salon, Square has a solution for you if you’re a small business owner. Because you can choose the right software solution and hardware tools to build your business, it’s easy to find a solid solution with Square.
Side-hustlers. If you’re a sole proprietor doing some consulting work on the side or selling your crafted creations at street fairs, Square is a super-portable way to process credit card payments or create invoices on the fly.
Who shouldn’t use Square?
While Square is a great option for many retailers, some businesses may not get as much return from using the platform. Here are two groups that may want to look for other options for payment processing.
Large businesses. Square advertises being an excellent option for enterprise-level companies; however, many larger businesses may feel that Square’s software solutions are lacking because of the complexity of data they want to capture about their consumers.
Companies needing round-the-clock support. If your business is a convenience store or 24-hour diner, Square likely isn’t the best option for you since they don’t offer 24/7 support to their customers.
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Pros and cons
Pros
- Intuitive. For both customers and cashiers, Square’s user interface and hardware is easy to use.
- Simple. Many credit card processing terminals come with additional regulations and guidelines about how they can be used, making chargebacks and refunds more complicated than they should be. Square is a simple, web-based approach that simplifies your sales flow.
- Affordable. With free POS software and free magstripe readers, all you’ll need to pay for as you’re starting with Square are the processing fees, which are reasonable.
Cons
- Slower for high-volume businesses. If your company handles a high daily sales volume, then it’s probably better to look for a faster option than Square.
- Can’t use software without hardware. If you’re not a fan of Square’s hardware or have to use a different card reader, you won’t be able to take advantage of Square’s intuitive POS software.
- No 24/7 support. As has already been mentioned, Square doesn’t offer around-the-clock customer support, which could be a problem depending on when a technical issue strikes your business.
Square vs. PayPal vs. Stripe
Payment Processor | Monthly fee | Fees |
Square | $0 to $60 per month | 2.6% plus 10 cents for in-person transactions/2.9% plus 30 cents for online transactions |
PayPal | $0 to $30 per month | 3.49% plus 49 cents for digital payments/2.99% plus 49 cents for standard credit/debit card payments |
Stripe | $2 per account monthly | 2.9% plus 30 cents for online transactions/2.7% plus 5 cents for in-person transactions |
PayPal
PayPal’s fees are far higher than those charged by Square. Even so, PayPal’s hardware doesn ’t hold much of a candle to Square, so unless you’re mostly doing eCommerce work, PayPal might not be the right fit for your brick-and-mortar or click-and-mortar company.
Stripe
Stripe blows past Square when it comes to monthly fees. While Square can charge you as much as $60 or even more if you go on Premium plans, Stripe only charges $2 monthly for each account. Not only that, but Stripe also has competitive fees.
FAQs
Will I qualify for a 1099-K using Square?
Ultimately, your tax implications using Square will depend on the state you live in and local tax guidance, so it’s always essential to consult with a tax professional about these sorts of issues. However, Square’s FAQ does mention that accounts that generally have “more than $20,000 in gross sales from goods or services in the calendar year and more than 200 transactions in the calendar year” qualify for a 1099-K.
How long do transfers take?
Once you’ve linked your bank account, Square will automatically transfer funds within one or two business days.
Can Square be used abroad?
According to their website, Square can be used in the U.S. the U.K., Ireland, Canada, Australia, and Japan. You’ll need to be using Square in the country that your account is activated in, though.
Is Square legit?
Square is a major asset to small business owners looking to accept credit card payments or mobile payments thanks to its low-cost fee structure, well-made hardware, and easy-to-use user interface. Touchless payments and eCommerce have become even more critical during the pandemic, so ensuring your business has the right tools to make sales is pivotal if you want to stay afloat.
Some of the best things about Square are its intuitiveness and simple design. However, those same benefits could mean larger businesses may want to look elsewhere regarding payment processing platforms. Even so, there's a lot to love about Square for restaurants, salons, consultants, and retailers. It even stacks up favorably against two major competitors. As such, Square is worth looking into if you need a way to handle your inventory and process sales and don’t want to spend too much time or energy getting things rolling at this stage in the game.
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Writer
Brent Ervin-Eickhoff is a Chicago-based writer, stage director, and filmmaker with a background in digital marketing and content creation. In addition to Joy Wallet, Brent has written for Complex, Volkswagen, HowlRound, Picture this Post, and Third Coast Review, among others. He currently serves as the Associate Director of Marketing for Content Creation at Court Theatre at the University of Chicago. Brent graduated from Ball State University with Academic Honors in Writing.
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