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Square Review

Best Mobile Credit Card Processing Solution

A Business News Daily Review

Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.

After conducting extensive research and analysis, we recommend Square as our pick for the best mobile credit card processor for small businesses in 2018. To understand how we selected our best picks, you can find our methodology and a comprehensive list of credit card processing companies on our best picks page.

Small businesses that use Square rave about how easy it is to use, and a big part of that is that its rates are simple and transparent, since pricing structure is one of the most confusing aspects of accepting credit cards. Square uses the flat-rate pricing model, which means that no matter which card brand and type – credit or debit, regular or rewards – your customer uses, you pay the same rate. If your customers like to use American Express and premium rewards cards, or if you process a low volume of cards each month, this rate structure can save you money.

  • When you accept credit and debit cards in person using a card reader, Square charges a flat rate of 2.75 percent per swipe.
  • If you use Square Register to accept payments, you pay 2.5 percent plus 10 cents per transaction.
  • For online transactions, such as invoices and online store purchases, Square charges 2.9 percent plus 30 cents.
  • If you manually key in card data, Square charges 3.5 percent plus 15 cents per transaction.
  • Custom rates are available if you process more than $250,000 per year and have sales tickets larger than $15.

Also notable is Square's lack of account fees. There are no monthly, setup, PCI compliance, early termination or other hidden fees associated with using Square. There's no chargeback fee either, which is rare, even among other mobile credit card processing companies that charge a flat rate. Some of Square's ancillary software applications have monthly fees, but these programs are optional.

Square is a flexible credit card processing company because it doesn't lock you into a long-term contract. It provides its processing services on a pay-as-you-go basis, so you can close your account at any time without penalty. If your business is seasonal, you don't have to worry about putting your account on hold or closing it during your off months, since there are no account fees and you only pay for the processing you use.

It also allows you to choose how quickly you receive your funds. Your Square account is linked to your business bank account, and on average, the company deposits the money from your transactions into it within two business days. If you need your money faster than that, you can schedule when you want the funds deposited in your account or choose instant deposits; this service costs 1 percent of the total amount of the deposit.

Square works with many different business types and industries, and it's one of the few processing services that can be used by individuals. Here are some of the features Square offers its merchants.

Nearly every type of merchant can use Square. In addition to mobile merchants that ring up sales and services on the go, online businesses and those with physical locations can use Square. It has dedicated solutions for different industries and business types, such as retail, food and beverage, service providers (professional services, beauty professionals, transportation, and home and repair), health and fitness, organizations, and entertainment. However, before signing up with Square, you'll want to check its list of prohibited goods and services to make sure your business type is supported. If it's not and you sign up anyway, the company may freeze your funds and cancel your account without notice.

Square is a merchant aggregator that sets you up as a submerchant under its master merchant account. Because of this, the application process is easier and faster. You don't have to worry about a credit check or submitting documentation; all you need to supply is basic information about your business and the last four digits of your Social Security number so Square can verify your identity. This means virtually anyone can use the service and open an account right away.

Square's credit card processing equipment and payment app, called Square Point of Sale, is easy to use, as it's a plug-and-play solution that isn't complicated to set up. The small business owners we talked to said using Square is as simple as connecting the reader to a phone or tablet and opening the app to select purchases. Then, you just swipe or dip the card and have the customer sign the device. That's it – the transaction is finished in seconds. This ease of use makes Square convenient for both businesses and customers, giving them a better experience and a fast way to complete purchases.

The Square Point of Sale app works on both Android and Apple devices. Even though it's simple to use, it includes a host of POS features that make it easier to run your business. In addition to processing credit cards on the go, Square Point of Sale lets you accept cash, check and gift card payments. You can also perform a bevy of other functions, including the following:

  • Open tabs and split tickets
  • Prompt customers for tips right on the screen
  • Automatically set discounts
  • Process transactions offline
  • Email, text or print receipts
  • Collect and manage customer contact information
  • Allow customers to place orders for pickup
  • Send digital invoices that your customers can pay online
  • Track inventory in real time, with the ability to set customized alerts
  • View analytics and generate a wide variety of reports
  • Integrate with accounting software and other business applications

Editor's note: Looking for information on credit card processors for your business? Use the questionnaire below and our vendor partners will contact you to provide you with the information you need.

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Square offers several types of processing hardware, so you can start with a basic card reader, then add accessories and services as your business grows (more on this below). This is the strategy some small business owners we talked to used, which allowed them to keep their hardware costs low and stay with one credit card processor throughout the life of their business. Square offers the following:

  • Square Magstripe Reader: This simple mobile credit card swiper plugs into your iPhone or Android phone's headphone jack. Just open the app, swipe the card, and have customers enter their PIN or sign for the purchase right on the phone's screen. This card reader is free; the company mails it to you after you open an account. [Credit Card Machines: Answers to Frequently Asked Questions]
  • Square Chip Card Reader: Like the magstripe reader, this card reader plugs into your phone's headphone jack and accepts magstripe cards. With its second slot, it accepts your customers' chip cards. It costs $29.
  • Square Contactless and Chip Reader: This wireless, pocket-sized device lets you accept Apple Pay, Google Pay and contactless cards, as well as EMV chip cards. It's shipped with a free magstripe reader, so you can continue accepting magnetic stripe cards when needed. It costs $49. [EMV: What It Is and Why You Need It]
  • Square Stand: You can use the Square Stand to turn an iPad into a stationary POS system that sits on the counter at the checkout area. It has a built-in magstripe card reader and comes with a contactless and chip reader and dock that you plug into the unit. If you want to go back to mobile, just detach the iPad from the stand and attach a Square Reader to process credit cards from anywhere. It costs $169.
  • Square Register: The newest addition to Square's hardware lineup, this countertop model comes with two touchscreens – one for you and one for your customer – and has built-in card readers that accept magstripe and chip cards, as well as mobile wallets such as Google Pay and Apple Pay. Square's POS software is preinstalled, and you can add accessories such as a cash drawer, receipt printer and barcode scanner. It costs $999, and when you use it, your rates are discounted, costing 2.5 percent plus 10 cents per transaction.

In addition to processing credit cards on mobile devices, Square offers services to help merchants run and grow their businesses. These include business software, a financing program and e-commerce capabilities.

Square offers several software applications that you can add to your system. For some, the only cost is the processing fee. Others have a monthly fee. Options include appointment-setting software with a booking website, online invoicing, email marketing, a loyalty program, payroll, and advanced POS software specifically for retail and restaurants.

You can start selling online with a free mobile-ready online store. You get a prebuilt, customizable storefront, so you won't need any web design or coding skills to get started. The online store itself is free; Square charges 2.9 percent plus 30 cents per transaction.

If you follow Square's best practices for accepting card payments, the company provides up to $250 of chargeback coverage per month. The way it works is that, after a customer contacts their bank to dispute the charge, Square puts a hold on money from that transaction and sends you an information request form. You have seven days to reply with documentation and to decide if you want to return the customer's money or challenge the dispute. If you choose to challenge, Square sends the documentation you provided to your customer's bank, which then decides who wins the dispute. It can take up to 90 days for a decision. If the chargeback is covered under Square's chargeback protection program, you get your money back, even if the case is resolved in your customer's favor.

If you refer your merchant friends to Square, you can receive free processing for up to $1,000 in sales over a six-month period. You also receive a one-time discount on a Square Contactless and Chip Reader.

The Square Capital program lets eligible merchants borrow money when cash flow is tight or when you need a loan for new equipment, additional inventory or a new location. We asked a Square representative how this program works, and they told us that the funds are paid back automatically from your credit card transactions. Payments are based on a fixed percentage of each transaction. This percentage is flexible, meaning you can pay more when business is booming or less when sales aren't so great.

Although Square is one of the easiest and most feature-rich mobile credit card processors, it has one major drawback: its customer service.

It's not that Square doesn't offer customer support. In fact, the company offers a wide selection of resources, including phone, email and Twitter support. There's also a forum and a searchable support center that hosts a collection of articles, videos, FAQs, and how-to guides that cover everything from the basics of using Square to detailed information about features, hardware and banking issues. The sales rep we spoke with said there's a self-service portal where you can perform certain tasks by yourself, such as order equipment and handle banking issues.

What Square lacks in customer support is availability. Only Square merchants can contact customer support, and while other credit card processors have live support available 24/7, Square's phone customer service team is only accessible Monday through Friday from 6 a.m. to 6 p.m. PT. This means if you need help at night or on weekends, you won't be able to reach a person when you need one.

Additional reporting by Sara Angeles.

Ready to choose a credit card processing company? Here's a breakdown of our complete coverage:

Editor's note: Looking for information on credit card processors for your business? Use the questionnaire below and our vendor partners will contact you to provide you with the information you need.

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Lori Fairbanks

Lori Fairbanks has years of experience writing and editing for both print and online publications. After graduating from Brigham Young University with a Bachelor of Arts in English, she worked as a magazine editor and then as a freelance writer and editor for a variety of companies, including marketing firms and a medical university. She now writes for Business.com and Business News Daily about financial systems and services for small businesses, such as accounting software, credit card processing and point-of-sale systems.