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Square Review

Donna Fuscaldo
Donna Fuscaldo
  • Square is our pick as the best credit card processor for small businesses in 2021.
  • It has good rates, uses the flat-rate pricing model, and doesn’t charge any monthly or annual fees for its basic processing service.
  • It provides free point-of-sale software with its processing service, which can be a money-saver for new and very small businesses.
  • This review is for small business owners who want to learn about Square’s credit card processing service and why it’s our best pick for small businesses overall.

We’ve chosen Square as the best credit card processor for small businesses because it has a low-risk entry point for accepting debit and credit cards. You only pay for the processing you use; there are no long-term commitments and no monthly or annual fees. Businesses of all sizes can use it – including very small businesses and individuals such as freelancers, gig workers, independent contractors and sole proprietors – and the basic processing equipment is minimal and inexpensive. All you need to start accepting payments is the card reader and app that work with your smartphone or tablet.

Square company logo


The Verdict

Square is the best credit card processing company for small businesses overall because it has transparent flat-rate pricing, free point-of-sale software, and add-on services that expand its capabilities as your business grows.

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Square Card Reader Summary

Pricing modelFlat rate
Monthly feesNo
Contract termsPay as you go
24/7 supportNo


Simple Rates, No Account Fees

Small businesses that use Square love how easy it is to use, and a big part of that is its simple and transparent processing fees, since pricing can be one of the most confusing aspects of accepting credit cards. Square uses a flat-rate pricing model, which means that no matter which card brand and type your customer uses – credit or debit, regular or rewards – 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.

Rates still vary depending on what type of processing equipment you use, the Square software (or app) you use, whether you accept cards in person or online, and whether you use a Square card reader or key in the card details. It sounds confusing, but once you figure out how you want to accept payments, the pricing is a simple, flat rate.

Here’s what it costs to process credit card transactions using Square.

Accepting cards in person:

  • 6% + $0.10 when you use Square Reader, Square Register, Square Stand, Square Terminal or Square for Restaurants
  • 5% + $0.10 when you use Square for Retail or the paid version of Square Appointments (for two or more employees)

Accepting cards without a card reader:

  • 5% + $0.15 when you manually key in card data using the Square Point of Sale App or Virtual Terminal (also the cost for stored card details using Card on File)

Accepting cards online:

  • 9% + $0.30 when you accept payments using Square Invoices or Square Online Store
  • 6% + $0.30 when you accept payments using the Square Online Store Premium Plan

Custom rates are available. If you process more than $250,000 per year and your average sales ticket is over $15, you may be eligible for custom rates. You can call the sales team to discuss your options.

There are no account fees. Square charges no monthly fees, setup fees, PCI compliance fees, early termination fees or hidden fees. There’s no chargeback fee either, which is rare, even among other mobile credit card processing companies that charge a flat rate.

There are optional fees for add-on services. Some of Square’s ancillary software applications have monthly fees, but these programs are optional. Here’s a sampling of the optional services and their cost:

  • Square Appointments is free for a single user, $50 per month for up to five employees, and $90 for up to 10 employees.
  • Square for Restaurants offers three plans – Free, Plus and Premium. The Plus plan costs $60 a month per location for one POS and $40 per month for each additional POS. The Premium plan is for Square customers who qualify for custom pricing.
  • Square for Retail also comes in Free, Plus and Premium plans. The Plus plan costs $60 a month per location. The Premium plan is for Square customers who qualify for custom pricing.  
  • Email marketing services start at $15 per month.
  • Employee payroll costs $29 per month plus $5 per employee per month.
  • Contractor payroll costs $5 per person per month.
  • Team Management is available as a free service. Team Management Plus costs $35 a month per location.
  • Loyalty starts at $45 a month per location.
  • Digital gift cards are free to sell online. Custom cards start at 80 cents each.

Flexible Terms

Square is a flexible credit card processing company because it doesn’t lock you into a long-term contract. It provides 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 offseason, since there are no account fees and you only pay for the processing you use.


You can choose how quickly you receive your funds. Your Square account is linked to your business bank account, and the company deposits the money from your transactions within two business days on average. If you need your money faster than that, you can schedule when you want the funds deposited in your account or choose instant deposits; however, there are some limitations. For example, new Square merchants are limited to $500 per day. Also, the instant deposit service costs an additional 1.5% of the total amount of the deposit.

Key takeaway: Square has flat rates and doesn’t charge any monthly or annual fees for its credit card processing service. There are extra costs for its optional add-on services.


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

Dedicated Solutions for Many Business Types

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 it supports your business type. If it doesn’t and you sign up anyway, the company may freeze your funds and cancel your account without notice.

Easy Application Process

Square is a merchant aggregator that sets you up as a submerchant under its master merchant account. This makes the application process easier and faster than it is with some other companies, and it also means that virtually anyone can use the service and open an account right away.

You don’t have to worry about a credit check or submitting documentation; all you need to supply is basic information. If you’re using Square as an individual, you’ll need to give the company your full legal name, date of birth, home address, and Social Security number so Square can verify your identity and your U.S.-based bank account information, allowing it to deposit your money once you start running transactions.

If you’re using Square as a business, you’ll also need to include your employer identification number and your business bank account information.

Simple Setup and Processing

Square’s mobile credit card readers and its payment app, Square Point of Sale, are easy to use, and this plug-and-play solution isn’t complicated to set up. The small business owners we talked to said using Square is as simple as connecting the credit card reader to a phone or tablet and opening the free Square app to select purchases. Your customers use the card reader to swipe, dip or tap their cards. And that’s it – the transaction is finished in seconds. This ease of use makes Square convenient for businesses and customers, giving both buyer and seller a good experience and a fast way to complete purchases.

Point-of-Sale Software

The Square Point of Sale app works on both Android and iOS devices. Even though it’s free and simple to use, it includes a host of POS features and tools that can simplify running your business. In addition to processing credit and debit card payments, the Square POS app lets you accept cash, checks and gift cards. You can also perform several other functions:

  • 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.
  • Securely save customer cards on file for future use.
  • Set employee permissions.
  • Allow customers to place orders for pickup.
  • Publish QR codes for self-service ordering.
  • Send digital invoices that your customers can pay online.
  • Track inventory in real time, with the ability to set custom alerts.
  • View analytics and generate a wide variety of reports from the dashboard.
  • Integrate with accounting software and other business applications.


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

Processing Equipment

Square offers several types of processing hardware to use with the Square POS. You can start with a basic credit card reader, then add accessories and services as your business grows. This is the strategy some small business owners we talked to used, and it allowed them to keep their hardware costs low and stay with one payment processor throughout the life of their business.

  • Square Reader for magstripe: This simple mobile credit card swiper plugs into your iPhone’s Lightning connector or your Android phone’s headphone jack. Just open the POS app and swipe the card. The company mails the first one to you for free after you open an account. Additional units cost $10 each. [Read related article: Credit Card Machines: Answers to Frequently Asked Questions]


  • Square Reader for contactless and chip: This wireless, pocket-sized device lets you accept chip cards and contactless payments using mobile wallets, like Apple Pay and Google Pay, as well as contactless cards. It ships with a free magstripe reader, so you can continue accepting magnetic stripe cards when needed. It costs $49, or $78 if you want to bundle it with a charging dock. [Read related article: Still Not Accepting EMV Chip Cards? Why You Need to Switch]


  • Square Stand for contactless and chip: You can use the Square Stand to turn an iPad into a stationary POS system that sits on the counter in 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, you just detach the iPad from the stand and attach a Square Reader to process credit cards from anywhere. It costs $169.
  • Square Terminal: If you prefer not to use your mobile device to accept credit card payments, this is the card reader for you. It’s an all-in-one credit card terminal with a built-in screen, card reader and receipt printer. It costs $299.
  • Square Register: This countertop model also runs independently of a smartphone or tablet. Instead, it comes with two touchscreens – one for you and one for your customer. It 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 $799.

Key takeaway: Square includes its POS app for free with your account. Several hardware options are available.

Other Benefits

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.

Add-On Services

Square offers several software applications that you can add to your system. For some, the only cost is the transaction fee. Others have a monthly fee. These are some of the free options:

  • Analytics
  • Appointments (for a single user)
  • Customer directory
  • Digital gift cards
  • Invoices
  • Team Management (the basic tier)

Free Online Storefront

You can start selling online with a mobile-ready online store. You get a prebuilt, customizable storefront, so you don’t need any web design or coding skills to get started. It syncs with Square Point of Sale, so your inventory and orders are always up to date. It supports in-store pickup, making it useful for both stores and restaurants. Four service tiers are available for this service, and the basic tier is free – all you pay are the transaction fees for your credit card sales.

Alternatively, you can use Square Online Checkout to create a payment link that you can text, email, or share on social media channels.

Chargeback Protection

Square encourages you to follow its best practices for accepting card payments, as they reduce chargebacks. If a customer does dispute a charge, though, Square will work with you to resolve the issue without charging you a fee. This is unusual, as most credit card processors charge $25 per dispute, whether or not it is resolved in your favor.

This is how it works: After your customer contacts their bank to dispute the charge, Square puts a hold on money from that transaction and sends you a form requesting information. 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 challenge it, 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.

Referral Program

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 $20 discount on a Square contactless and chip card reader.

Small Business Financing

The Square Capital program lets eligible merchants borrow money when cash flow is tight or for new equipment, additional inventory or a new location. The funds are paid back automatically from your credit card transactions. Payments are based on a fixed percentage of each transaction. There’s no penalty if you repay the loan early.

Key takeaway: Square has some nice ancillary services, and though most cost extra, its online storefront is free. It’s also one of the few processors that doesn’t have a chargeback fee.

Customer Service

The company offers a wide selection of customer resources, including phone, email and Twitter support. It also has a forum and a searchable support center that hosts a collection of articles, videos, FAQs, and how-to guides covering everything from the basics of using Square to detailed information about features, hardware and banking issues. Square’s customer service team is available by phone Monday through Friday from 6 a.m. to 6 p.m. PT.

Key takeaway: Square has many online resources, and you can call its customer service team weekdays from 6 a.m. to 6 p.m. PT.


Although Square is one of the easiest and most feature-rich mobile credit card processors, it isn’t perfect. One drawback is that its customer service isn’t available 24/7 like other major credit card processing companies, so you won’t be able to reach a support person if you need help at night or on weekends. Check out our Helcim review for supported customer service. 

Also, like many other mobile credit card processors, Square has numerous complaints online about held funds and account closures. This type of processing service is warier of risk than traditional credit card processors, and it will put a hold on your funds if a transaction or your account raises a red flag, such as an abnormally high sales ticket or volume of transactions. If the company discovers that you sell goods or services that are on its prohibited list, it will close your account.

Key takeaway: Square’s customer service team isn’t available 24/7. Before signing up for an account, you need to verify that your business type and the products or services you offer are not on Square’s prohibited list.


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

Square company logo


The Verdict

Square is the best credit card processing company for small businesses overall because it has transparent flat-rate pricing, free point-of-sale software, and add-on services that expand its capabilities as your business grows.

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Donna Fuscaldo
Donna Fuscaldo
Staff Writer
Donna Fuscaldo is a senior finance writer at and has more than two decades of experience writing about business borrowing, funding, and investing for publications including the Wall Street Journal, Dow Jones Newswires, Bankrate, Investopedia, Motley Fool, and Most recently she was a senior contributor at Forbes covering the intersection of money and technology before joining Donna has carved out a name for herself in the finance and small business markets, writing hundreds of business articles offering advice, insightful analysis, and groundbreaking coverage. Her areas of focus at include business loans, accounting, and retirement benefits.