You’re a small business owner looking for a credit card processor? You’ve probably seen Square. Founded in 2009 Squareup.com is a payment processing and point of sale platform that lets businesses of all sizes accept credit cards online and in person.
In this post we’ll dive into Square pricing and fees and compare to the competition to help you decide if it’s right for you.
Quick Summary
- Square’s pricing includes transaction fees, hardware costs and additional services.
- Understand the risks of Square’s aggregator model to decide if it’s right for you.
- Consider cost, features, customer support & compatibility when choosing a payment processor.
Table of Contents
- 1 Square’s Fee Structure
- 2 Square’s Pricing Plans and Features
- 3 Square for Specific Businesses
- 4 Square Payments Pricing Model
- 5 Square’s Rates and Fees
- 6 Deposit Times and Funding Options
- 7 Square’s Holds and Reserves
- 8 Square’s Hardware Compatibility and Customer Support
- 9 Square for Your Business
- 10 So where does the 2.95% fee go when you sell with Square? Let’s break it down:
- 11 Conclusion
- 12 Frequently Asked Questions
Square’s Fee Structure
Payment processing should be transparent and Square’s fee system is made up of three parts: transaction fees, hardware costs and additional services. Let’s dive into each of these in more detail.
We’ll look at the different types of Square transaction fees and charges from other Square services, their hardware prices and any additional service fees that apply when using them. So, we can see how Square will impact your bottom line.
How Much Does Square Charge Per Transaction?
Transaction fees are key to a business being profitable and Square charges differently depending on the payment method.
Square’s transaction fees are:
- 2.6% + $.10 for in-person.
- 2.9% + $.30 for online.
- 3.5% + $.15 for manually keyed.
- 3.3% + $.30 for Square Invoices.
- 6% + $.30 for After Pay
If you assess your business’s transaction types and volume you may be eligible for one of their monthly plans that will lower these costs significantly.
Hardware Costs
When looking at Square’s fee structure you should note that Square’s fee structure is different. For transactions hardware costs are also part of the equation. The options in the Square online store include magstripe readers that can be used on mobile phones as well as full POS terminals like their Square Register and Square Terminal products, respectively priced at $799 or $39 per month over 24 months and $299/$27 a month over 12 months.
To get the best solution for their business owners should compare these to the competition like SumUp Plus’ card reader which is $54 or PayPal Zettle which starts at $29 with additional ones costing $79.
>> RELATED: 25% Off Square POS Hardware Promo Code
Additional Services
Square has services that can make running your business easier like staff management and payroll. Some are included in their general plan but others come with extra fees.
For example, invoicing has a free and Plus version for $20/month and the virtual terminal is 3.5% + 15 cents per transaction. This may be slightly more than some others but it doesn’t have the 30-cent flat fee most have to pay. Considering costs and benefits will help you decide what’s best for you when choosing these extras from Square’s offerings.
Square’s Pricing Plans and Features
Square has three pricing plans – Free Basic Plan, Plus Plan and Premium Plan – to fit different business needs. Each plan has different payment processing fees and features so you can decide which one is best for you.
Free Basic Plan
For small businesses just starting out Square’s Free Basic Plan is a great option as it has no monthly fee and includes reporting and can accept an unlimited number of items. Processing fees still apply and additional fees for optional subscriptions or extras that may come up later.
The plan has all the essentials for free so it’s budget friendly. More advanced plans have extra benefits but higher costs too. Businesses looking for a reliable option may want to start with what’s included in the free basic version and upgrade later if needed.
Premium Plans
Square’s Plus and Premium Plans have more features for a price. The Plus Plan is $29/month with in-person processing fees of 2.6% +$0.10 per transaction. The bigger investment of $50/month in the Premium Plan gets you lower fees and advanced features like organizing invoices by project type.
The extra cost may be justified if you need more efficiency from your business operations or need extra features. You can choose your plan based on what’s included and what you want to achieve with Square’s payment solutions.
Here’s how to sign up for a new Square Account.
Square for Specific Businesses
Square has services for retail, restaurant and appointment-based businesses. With custom rates and features for each business type Square’s platform is suitable for many industries. Below we’ll go into more detail on how these solutions can benefit your business.
Retail Businesses
Square for Retail is a point-of-sale platform designed for retail businesses. This includes solutions for taking payments and inventory tracking, e-commerce stores, analytics and more. The Team Plus edition has extra features like customizable wage rates and sales reporting for $60/month.
Using Square for Retail would streamline operations in any retail store so entrepreneurs can manage them easier – it’s a great choice when choosing technology for their business.
Restaurants
Square for Restaurants is a point-of-sale system designed to be fast and easy to use with features like menu management, order taking, payment integration and group checks.
To make running your restaurant even easier Square offers the software add-on Square Shifts which helps with time tracking and tipping with customizable pricing plans based on team size and needs. From a Free plan (Basic scheduling and time tracking for small teams of up to 5 team members) to Plus starting at $4/month per team member with features for all team sizes to give you flexibility in managing time and labor costs. With all these tools at your disposal you can optimize your operations and maximize customer satisfaction.
>> Related: Top Software for Restaurants
Appointment-Based Services
Square Appointments is perfect for businesses like healthcare, beauty and professional services to take payments and manage their schedule.
It has different pricing structures based on the number of employees that can book appointments so customers can book online. Through this feature customers have scheduling options and business owners have more time not to have to manage each appointment manually.
Square Payments Pricing Model
Square’s pricing is based on bundled rates that combines interchange fees, transaction fees and Square’s markup. This aggregator model has pros and cons for businesses; on one hand it simplifies the payment processing fee structure making it easier to calculate prices but on the other hand can be more expensive than other solutions depending on your scenario.
Bundled Pricing
Bundled pricing is when companies bundle multiple products or services together for a discounted rate and it can work in payment processing with one rate for all card types like American Express.
While this type of pricing model can be useful in some cases there are downsides too – businesses may pay extra fees they don’t need to and clients may get overwhelmed with too many options.
To decide if this model fits your business needs and transaction volume/type properly consider the pros & cons before you decide if bundled pricing works here.
Square vs Competitors
When trying to figure out if Square is cost effective you need to take the transaction fees into account and compare them with its competitors. For example, Stripe has a fee structure of 2.9% + 30c for keyed transactions.
On the other hand, when you use Square credit card fees you would pay 3.5% + 15c per payment processed through their system. By comparing the rates, you can make an informed decision on which processor is best for you and offers more value.
In some cases, it may be that due to restrictions or higher charges than usual using Square won’t work at all costs. So, it’s recommended to assess your specific needs before committing to anything to make sure you select the best and most affordable option that fits what your business needs.
>> MORE: Clover vs. Square: Which POS System Is Best For Your Business?
Square’s Rates and Fees
Business owners need to know the different rates and fees Square charges for different types of transactions to determine their profit margin. Different fees apply for in-person vs manually entered or online orders.
Custom pricing plans are available for high volume businesses which can save you a lot compared to standard pricing. Retailers or restaurateurs need to calculate how much they will pay based on transaction amounts, ticket sizes and types of services offered to make an informed decision on using Square’s payment processing and its impact to their profits.
Square’s transaction rates need to be analyzed for point of sale success.
In-Person Transactions
When you’re dealing with in-person sales you need to know the fees involved. When you use Square for credit card transactions made in-person there’s a charge of 2.6% + $0.10 per transaction on top of other applicable fees. You should compare this charge to other providers like SumUp.
Comparing costs between payment processors will help you choose the one that’s best for your business and fits within your budget when it comes to handling in-person credit card payments.
Online and Manual Transactions
In this digital age both online and manual transactions are common. Square charges 2.9% + 30c for online payments and 3.5% + 15c per transaction when manually processed – same as in-person.
To decide which payment processor is best for your business you need to review these fees with other services available like SumUp whose rates are 3.5% +15c for virtual orders and keyed-in transactions or linkable methods of manual payment.
Comparing the cost structure of both types of processing (online & offline) will help you make an informed decision on the best payment solution for your needs.
Subscription-Based Services
When calculating the cost of using Square you need to consider not just the transaction fees but also the costs of Square’s different subscription services like Square Subscriptions for Retailers, Appointments and Restaurants (as mentioned earlier).
Deposit Times and Funding Options
Square’s deposit system has been criticized as they charge fees upfront and limit deposit maximums for card-not-present transactions. This can be a problem for businesses that need continuous access to their funds, resulting to lower cash flow and more record keeping.
We’ll get into Square’s funding schedule including same-day deposits below so you have an idea how it can affect your business.
Deposit Schedule
Square allows businesses to choose when they want their payments to close giving them more control on their budget. Deposits over $10 are usually processed within 1-2 business days so businesses can get access to their funds relatively fast.
Although this may work for many businesses, you need to consider your business’ specific situation and cash flow needs when deciding if Square is the right payment solution for you.
Same-Day Deposit
Square’s daily discounting can result to lower liquidity and more complex financial reporting for businesses since the fees are deducted before funds are available. So, if quick access to cash is important for your business, then this should be considered when deciding if Square is for you or not.
But remember Square deposits happen on a regular basis – even on holidays and weekends – so having up-to-date accounts may outweigh the drawbacks of deductions before deposit availability.
Square’s Holds and Reserves
Square has no underwriting so reserves and holds on deposits are a problem for businesses that rely on their payment processing. These restrictions can be a pain for businesses that need cash flow stability.
Account Freezes
There are several reasons why Square can freeze your account such as not having enough funds in the account, too many chargebacks and disputes filed against you.
When this happens, they will hold any payments until a risk investigation is done. To avoid these kinds of issues you need to comply with Square’s agreements and be aware of your financial activity like chargebacks and disputes filed on their platform. These measures can help minimize freezes and the related financial burdens that come with it.
Reserve Policies
Square’s reserve policies can affect your business cash flow and you need to understand these. Square can at any time and without notice impose, increase, decrease or remove a reserve on deposits for buyer and seller protection and to allow more transactions on their platform.
To minimize disruptions to your business due to changing policies you need to be informed ahead of time. By doing so you will be better prepared for any changes and minimize potential problems that may arise.
Square’s Hardware Compatibility and Customer Support
If you’re considering Square as your payment solution then you need to know the range of hardware they support and how good their customer support is. Knowing this will help you decide if using them for your business meets your expectations or not.
In this section we’ll go over both so you have a better idea when making such a decision. We’ll go through the devices that are compatible with Square’s services and the limitations of their customer support.
Devices
Having the right hardware is crucial for a payment processing system and Square supports a wide range of devices. These include Android and iOS phones and tablets, USB interface barcode scanners, printers (Ethernet or USB), cash drawers (USB or Printer driven), KDSs, keyboards and label printers too.
So, you have all the tools you need to process payments smoothly. Check out the latest Square Hardware here.
Customer Support Limitations & Issues
Square Customer Service is known for having a platform that’s easy to use with lots of resources. In-house phone support is available from 6a.m. to 6p.m. PT or sellers can use the Seller Community to connect and learn from other sellers.
However, users have been complaining of long response times or no response at all when they need help with their account and payment processing tasks.
With that in mind for any business that values good service, email may not be the best option for quick support since it’s inconsistent. Keep in mind email is always used for cases like fraud investigations.
This can be hard to work around if your business needs help or personal attention when it comes to payment processing decisions. So, before you sign up with Square you need to make sure they can deliver what you need and that your expectations will be met.
Log into the Square Dashboard and get customer support here.
Square for Your Business
If you’re looking for a payment solution then Square might be the one for you depending on your business needs and situation. Small businesses with low monthly credit card volume or small transactions are perfect for using Square’s services.
If you have medium to high sales activity and big fluctuations in average ticket size or returns processing then other options should be considered. Evaluating these will help you decide if this platform is for you or not.
When Square is a Good Choice
For small businesses especially those with low or unusual sales volume Square’s model is good because of the pay-as-you-go system with no monthly fees. The free mobile card reader and user-friendly platform makes credit card processing easy to get started.
For businesses that have high volume of returns of lower priced items the per transaction fee of Square can eat into their profits and may lead them to look into other merchant service providers that have lower fees or a pricing plan that fits their needs.
Square also has many free tools to help small businesses grow without extra charges or hidden fees—POS & online solutions, free dispute management for chargeback disputes and advanced fraud prevention powered by AI/ML technologies and human expert supervision.
Business owners can access reporting tools straight from their Square dashboard to monitor their business performance and make informed decisions.
When to Look Elsewhere
For some situations businesses may be better off looking into alternatives to Square. These can be medium to high volume sales with keyed-in transactions and varying sales and transaction sizes.
Need more customer support or don’t want funds held without warning as mentioned above then that’s enough of a reason. Another is product returns (e.g., clothing stores), and if you’re looking for payment processors that reimburse interchange fees then there may be better options.
Companies should research their best options for payment providers according to their business needs before making a decision.
So where does the 2.95% fee go when you sell with Square? Let’s break it down:
One of Square’s biggest selling points is that on average 97.05% of your sales go into your pocket. This is a combination of card-present and card-not-present rates and includes all the fees associated with credit card transactions.
- 63% Interchange Fees: When Square processes a transaction for you they have to give a percentage of the funds to your customer’s card issuer.
- Assessment Fee: Square has to give a percentage of the amount collected from your customer to associations like Mastercard or Visa as dues and assessments.
- 3% Risk and PCI Compliance: Unlike their competitors Square products have end-to-end encryption and helps businesses be PCI compliant without extra cost.
- 34% Square Services: This percentage covers all the other expenses of providing business owners payment processing solutions through features like POS systems, dispute management, fraud prevention, enhanced reporting tools & analytics, team management and more.
Another benefit of using Square is they advocate for their sellers, negotiating low rates with banks and card networks whenever possible by monitoring trends that affect industry costs globally—since merchants pay over $100 billion a year in interchange fees for electronic payments worldwide.
Conclusion
In summary Square is a payment processing tool that offers various services, fees for transactions, hardware costs and optional add-ons. It’s also one of the top 10 POS systems for small businesses reviewed on our site.
Their one-price system makes the fee structure simple to understand. But still you need to consider how this pricing model will affect your business compared to others that offer similar solutions.
When deciding if Square is for your business or not consider the total volume of transactions you handle, the average order size and the types of transactions you do on the platform.
Get to know Square’s fee structure, hardware and customer support. Then you can decide if their payment processor is for your business and supports great customer service and your business growth.
Frequently Asked Questions
Can I negotiate my Square fees?
What does Square charge for manual entry?
What does Square charge for Apple Pay?
Who is Square Payments for?
How do I calculate Square transaction fees?
For online and keyed-in transactions: Square’s fee is a bit higher since these types of transactions are riskier. The fee is 3.5% + 15¢. So, for a $20 transaction you would multiply $20 by 3.5% (which is $0.70) and then add 15¢. Total fee would be 85¢.
Have any questions about Square Payments or Square fees and pricing? Ask below, and one of our experts will be happy to answer your questions.
