If you’re a small business owner looking for a credit card processing company, chances are you’ve come across Square. Founded in 2009, Squareup.com is a well-known payment processing and point-of-sale platform that allows businesses of all sizes to accept credit cards both online and in person.
In this guide, we’ll take a closer look at Square pricing and fees as well as compare it with its competitors to help you determine if it’s the right choice for your business.
Short Summary
- Square’s pricing structure includes transaction fees, hardware costs, and additional services.
- Understand the associated risks of Square’s aggregator model to determine if it is right for your business.
- Consider factors such as cost, capabilities, customer support & compatibility when selecting a payment processor.
Table of Contents
- 1 Understanding Square’s Fee Structure
- 2 Square’s Pricing Plans and Features
- 3 Square for Specialized Businesses
- 4 The Impact of the Square Payments Pricing Model
- 5 Analyzing Square’s Rates and Fees
- 6 Deposit Times and Funding Options
- 7 Addressing Square’s Holds and Reserves
- 8 Exploring Square’s Hardware Compatibility and Customer Support
- 9 Evaluating Square for Your Business
- 10 So where does the 2.95% fee go when you sell with Square? Let’s break it down:
- 11 Summary
- 12 Frequently Asked Questions
Understanding Square’s Fee Structure
Payment processing requires transparency, and Square’s fee system includes three components: transaction fees, hardware costs, and supplementary services. To determine if it is the right fit for your business needs, let us explore each one of these areas more in-depth.
We will look at different types of Square transaction fees and charges levied by other Square services, along with prices pertaining to their hardware options, plus any additional service expenses that may be incurred when using them. In this way, we can gain a complete understanding of how utilizing Square might affect your bottom line financially.
How Much Does Square Charge Per Transaction?
Transaction fees are a key component for businesses to remain profitable, and Square offers different charges depending on the method of payment.
Square’s transaction fees include the following:
- 2.6% plus $.10 for in-person transactions.
- 2.9% plus $.30 for online transactions.
- 3.5% plus $.15 for manually keyed transactions.
- 3.3% plus $.30 for Square Invoices.
If you assess your business’s transaction types and volume, you may be eligible for one of their monthly plans that would lower these costs significantly.
POS Hardware Costs
When looking at Square’s fee structure, it is important to note that Square’s fee structure is unique. For transactions, hardware costs also factor into the equation. The range of options offered by the Square online store includes magstripe readers, which can be used on mobile phones as well as full POS terminals like its 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 obtain the most cost-efficient solution for their business owners, they should compare these offers with those from competitors such as SumUp Plus’ card reader, costing $39, or PayPal Zettle, whose price starts at $29, with additional ones costing $79.
>> RELATED: 25% Off Square POS Hardware Promo Code
Add-On Services
Square offers a range of services that can make running your business more efficient, such as staff management and payroll. Some are included in their general plan, but others come with extra fees that need to be taken into consideration.
For instance, invoicing has both free and Plus versions costing $20 per month, while the virtual terminal charges 3.5% plus an additional cost of 15 cents for each transaction. This may cost slightly more than some other companies, yet it does not include the 30-cent flat fee most do have to pay. Considering costs along with advantages will help determine what is best suited for you when deciding on these extras from Square’s offerings.
Square’s Pricing Plans and Features
Square provides three pricing plans – the Free Basic Plan, Plus Plan, and Premium Plan – to accommodate different company needs. Each plan offers varying payment processing fees as well as features, allowing you to determine which would work best for your enterprise.
Free Basic Plan
For small companies just getting started, Square’s Free Basic Plan can be a great option as it doesn’t charge any monthly fee and includes reporting capabilities along with the ability to accept an unlimited number of items. Processing fees are still applied, along with additional charges for optional subscriptions or extras that may come up down the line.
The plan provides all essential features at no cost, which makes this solution budget-friendly. More advanced plans offer extra benefits but higher costs too. Businesses looking for reliable options might want to consider starting off by taking advantage of what’s included in the free basic version before they decide on upgrading later if necessary.
Premium Plans
Square’s Plus and Premium Plans provide businesses with more features for a price. The Plus Plan is $30 monthly, offering in-person processing fees of 2.5% +$0.10 per transaction, whereas the larger investment of $50 each month in the Premium Plan will yield reduced charges at 2.6% +$0.30 as well as advanced capabilities such as organizing invoices by project type.
The benefits may justify this extra cost to those needing greater efficiency from their business operations system or requiring similar extra features. You can pick your preferred plan based on the specifics it offers when matched against what you hope to achieve by using Square services for payment solutions.
Here are instructions on how to sign up for a new Square Account.
Square for Specialized Businesses
Square’s services are customized to the specific needs of retail, restaurant, and appointment-based businesses. With personalized rates and features for each business type, Square ensures its platform is suitable for a wide variety of industries. Below we’ll go into more detail about how these specialized solutions can benefit your business.
Retail Businesses
Square for Retail is a tailored point-of-sale platform suited to meet the needs of retail businesses. This system includes solutions for taking payments and tracking inventory, as well as support with e-commerce stores, analytics services, and more. The Team Plus edition offers extra features such as customizable wage rates and sales reporting at an estimated cost of $60 monthly.
Making use of Square For Retail would streamline operations in any retail store allowing entrepreneurs to manage them much easier – making it a great choice when selecting technology that fits their company’s specific requirements.
Restaurants
Square for Restaurants is an efficient point-of-sale system designed to provide a streamlined and user-friendly experience with features such as menu management, order processing, payment integration, and handling of group checks.
To make running your restaurant even easier, Square offers the software add-on called Square Shifts, which helps manage time tracking and tipping through customizable pricing plans dependent upon team size ranging from $2.50 – $4 per month for each member. With all these helpful tools at their disposal, businesses can optimize operations while maximizing customer satisfaction levels.
>> Related: List of the Top Software Companies for Restaurants
Appointment-Based Services
Square Appointments is a great resource for businesses such as those in the healthcare, beauty, and professional services sectors to facilitate payment acceptance along with an organized schedule management system.
It provides different pricing structures depending on the number of employees available to book appointments so customers can easily reserve their service online. Through this feature, clients have access to efficient scheduling options, while business owners gain more time from not having to manually manage each appointment individually.
The Impact of the Square Payments Pricing Model
Square’s pricing strategy revolves around bundled rates that combine interchange fees, transaction costs, and markup from Square. This aggregator model has both benefits and drawbacks for businesses; on the one hand, it simplifies the payment processing fee structure to make calculating prices simpler, but at the same time might lead to higher expenses when compared with other solutions depending on their individual scenarios.
Bundled Pricing
Bundled pricing is a tactic companies use to motivate customers to spend more by combining multiple products or services for a discounted rate, and it can be helpful in the context of payment processing with uniform rates for all card types, like American Express.
Although this type of pricing model could be useful in some cases, there are possible drawbacks as well – businesses may find themselves paying extra fees they don’t need while clients might get overwhelmed due to too many options presented.
To make an informed decision about whether this method should fit your business needs and transactions volume/type properly, consider its pros & cons carefully before you decide if bundled pricing works best here.
Comparing Square to Competitors
When trying to figure out if Square is cost-effective, it’s essential to take the transaction fees into account and compare them with those of its competitors. For example, Stripe has a fee structure consisting of 2.9% plus 30 cents for keyed transactions.
On the other hand, when opting for Square credit card fees, you would need to pay 3.5% plus 15 cents per payment processed through their system. Analyzing the rates will enable users to make an educated decision on which processor fits better their individual needs as well as offering more value financially speaking.
In certain scenarios, it could be that due to some restrictions or higher charges than usual, using Square wouldn’t work at all costs-wise. Thus assessing your particular requirements before making any commitments is highly recommended in order to guarantee to select the most ideal yet affordable option that responds adequately to what is specifically required by business operations.
>> MORE: Clover vs. Square: Which POS System Is Best For Your Business?
Analyzing Square’s Rates and Fees
Business owners need to be aware of the varying rates and fees that Square charges for different transactions in order to determine their profitability. Different fees apply to in-person versus manually entered or online orders.
Customized pricing plans are available for high-volume businesses, which can result in considerable savings compared to standard prices. It is important for retailers or restaurateurs to analyze how much they will pay based on transaction amounts, ticket sizes, and types of operations offered in order to make an informed decision about adopting Square’s payment processing system and its impact on profits.
A comprehensive analysis of Square’s transaction rates is crucial for optimal budget success at the point of sale.
In-Person Transactions
When dealing with in-person sales, it is essential to understand the fees involved. When using Square for credit card transactions made face-to-face, there is a charge of 2.6% plus $0.10 per transaction on top of other applicable charges. It’s important to compare this fee structure against others like SumUp, which has a rate to accept card payments of 2.75%.
Comparing costs between payment processors can help you choose the one that works best for your business and fits within its budget requirements when it comes to handling in-person payments via credit cards successfully.
Online and Manual Transactions
Today, in our digital age, both online transactions and manual transactions are commonplace. Square imposes a 2.9% plus 30 cents fee for online payments and 3.5% plus 15 cents per transaction when manually processed – similar to those made ‘in person.’
To determine which payment processor works best for your business, it’s important to review these fees with other services available like SumUp, whose rates stand at 2.90% +15 cents on virtual orders and 3.25 %+15 cents using keyed-in transactions or linkable methods of paying manually.
Evaluating the cost structure associated with both types of processing (online & offline) helps you make an educated decision regarding the most suitable payment solution tailored precisely to fit your necessities.
Subscription-Based Services
When evaluating the costs of using Square, it is essential to take into account not just the transaction fees but also any expenses associated with Square’s different subscription services, such as Square Subscriptions for Retailers, Appointments, and Restaurants (as summarized earlier).
Deposit Times and Funding Options
Square’s deposit system has drawn criticism as the company applies fees in advance and restricts deposit maximums for card-not-present operations. This can be a hindrance to businesses that require continuous availability of their funds, leading to decreased cash flow and more burdensome recordkeeping needs.
We’ll discuss Square’s funding timeline, including same-day deposits below, so you have an insight into how it could potentially affect your firm’s financial well-being.
Deposit Schedule
Square provides an opportunity for businesses to choose the time they want their payments closed, granting increased freedom in budgeting. With deposits that are over $10 usually recorded within 1-2 workdays, enterprises can expect comparatively quick access to their income.
Even though this may be suitable for numerous companies, it’s essential to take your individual conditions and money flow needs into consideration while determining if Square is the right payment solution for you.
Same-Day Deposit
Square’s approach of daily discounting may result in decreased liquidity and complex financial reporting for businesses since the fees are deducted prior to funds being available. Consequently, if quick access to money is crucial for your business operations, then this should be taken into consideration when evaluating whether Square is right for you or not.
On the other hand, bear in mind that Square deposits occur on a regular basis – regardless of holidays or weekends – so always having up-to-date accounts could outweigh any drawbacks due to deductions before deposit availability.
Addressing Square’s Holds and Reserves
Square has no underwriting process, so reserves and holds on deposits are often a problem for companies relying on their payment processing services. These burdensome restrictions can have adverse effects on businesses that need to maintain constant cash flow stability.
Account Freezes
There are several factors that may lead to your account being frozen by Square, such as not having enough money in the account, too many chargebacks, and disputes filed against you.
When this occurs, they will withhold any payments until a risk investigation is completed. To avoid these types of issues, it’s essential that you abide by agreements with Square and be aware of your financial activity, like amounts charged back or disputed on their platform. These measures can help minimize disruptions from freezes and related economic burdens associated with them.
Reserve Policies
Square’s reserve policies can significantly impact your business cash flow, and it is essential to understand these mechanisms. Square reserves the right at any time without notice to impose, increase, reduce, or remove a reserve on deposits for both buyers’ and sellers’ protection as well as to enable more transactions on their platform.
To limit disruptions of operations due to changing policies. It necessitates staying informed about them in advance. By doing so, you will be better prepared for possible changes in order to ensure that potentially related problems are minimized.
Exploring Square’s Hardware Compatibility and Customer Support
If you are considering using Square as your payment processing solution, it is important to be aware of the range of hardware that they support and how helpful their customer service can be. Knowing this information will help you decide if employing them for business needs meets expectations or not.
In this section, we’ll go over both these factors so one has a better understanding when making such an informed decision. Going through what devices are compatible with Square’s services and evaluating any limitations associated with customer assistance available from them.
Compatible Devices
Having the right hardware is essential for a successful payment processing system, and Square works with an extensive range of devices. These include Android and iOS phones and tablets, as well as USB interface barcode scanners, printers (Ethernet or USB), cash drawers (USB-driven) plus KDSs, keyboards, and label printers too.
This ensures you have access to all necessary tools so your business can process payments smoothly. You can find the latest Square Hardware here.
Customer Service Limitations & Common Complaints
Square Customer Service is known for having an accessible platform with a wealth of helpful resources. In-house phone support is available from 6 a.m. to 6 p.m. PT, or sellers can take advantage of the Seller Community options to connect and learn from other sellers.
Users, however, have frequently expressed dissatisfaction due to protracted response times or no answer at all when they need timely help with managing their accounts and payment processing tasks.
With such considerations top-of-mind for any business that values excellent service delivery, email may not be suitable given its inconsistency. Primarily contact is handled through email instead of over the phone in cases like fraud investigations.
This can be difficult to work around if your business requires timely help or personal attention when it comes to payment processing decisions. So before picking Square, you should make sure they offer what your needs are and that those expectations will be fulfilled adequately.
To access the Square Dashboard and get customer support, here’s how to log in to Square.
Evaluating Square for Your Business
If you’re looking for a payment processing solution, Square may be the right choice depending on your unique business needs and circumstances. Small businesses with low monthly credit card processing volume or small transactions are ideal candidates for utilizing Square’s services.
If there is medium to high sales activity as well as significant fluctuations in average ticket size or returns processing, then other options should be considered. Evaluating these factors will help determine whether this particular platform is suitable for you or not.
When Square is a Good Fit
For small businesses, especially those with low or uncommon sales volumes, Square’s model can be beneficial due to its pay-as-you-go system without requiring any monthly expenses. The free mobile card reader and user-friendly platform make credit card payment processing easy for users to launch.
When it comes to companies that offer high volume in return of lower-priced items, the per transaction fee charged by Square could significantly impact their profits, which may lead them towards looking into different merchant service providers offering less costly fees or a suitable pricing plan better suited for their needs.
Square also offers numerous free tools designed to help small businesses thrive without extra charges or hidden fees—such as POS & online solutions, free dispute management services for chargeback disputes, and advanced fraud prevention measures powered by AI/ML technologies in combination with human experts’ supervision.
Business owners can access powerful reporting tools straight from their Square dashboard to help them keep track of their company’s financial performance and make informed business decisions.
When to Consider Alternatives
For certain situations, businesses may be better served by looking into alternatives to Square. These can include medium-to-high volume sales with keyed-in transactions as well as varying sales and transaction sizes.
Needing additional customer service support or avoiding funds being held without warning, as mentioned above, could be enough of a deciding factor. Another consideration would be product returns (e.g., clothing stores), whereas seeking out payment processors who reimburse interchange fees might be a wiser choice.
It is highly recommended that companies research their best options regarding different payment providers according to their unique business needs before making an informed decision accordingly.
So where does the 2.95% fee go when you sell with Square? Let’s break it down:
One of Square’s most significant selling points is that, on average, 97.05% of your sales stay in your pocket. This percentage reflects a blend of both card-present and card-not-present rates and takes into account all the different fees associated with credit card transactions.
- 63% Interchange Fees: When Square processes a transaction on your behalf, they are required to give a percentage of the funds collected to your customer’s card issuer.
- Assessment Fee: Square is required 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 come with end-to-end encryption support and help ensure that businesses are PCI compliant without any additional costs.
- 34% Square Services: This percentage helps cover all other expenses related to providing business owners with payment processing solutions via convenient features such as POS systems, dispute management services, fraud prevention measures, enhanced reporting tools & analytics capabilities, and team management functionalities, among others.
Another key benefit of using Square is that they advocate on behalf of their sellers, negotiating low rates with banks and card networks whenever possible by keeping an eye out for trends affecting industry costs globally—given merchants pay over $100 billion every year in interchange fees for electronic payments worldwide.
Summary
In summary, Square is a widely used payment processing tool that provides various services, from fees for transactions to hardware costs and optional add-on features. It’s also one of the top 10 POS systems for small businesses reviewed on our site.
Their one-price system helps make the fee structure easier to understand. However, it’s still essential to consider how this pricing model may affect your business when compared with other companies offering similar solutions.
When making a decision whether Square will fit your enterprise or not, take into account factors like the volume of transactions handled by you in total as well as the average size of each order plus the types of operations conducted on the platform.
Dive deep into understanding Square’s fee structure, hardware compatibility, and customer support options. By doing so, you can confidently decide whether their payment processor fits your organization’s needs and supports not only excellent customer service but also your company’s growth goals.
Frequently Asked Questions
Can I negotiate my Square fees?
How much does Square charge for manual entry?
How much does Square charge for Apple Pay?
Who is Square Payments best For?
How do you calculate Square transaction fees?
For online and keyed-in transactions: Square’s fee is a bit higher because these types of transactions are more risky. The fee is 3.5% + 15¢. So for a $20 transaction.
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.
