The Complete Guide To Square Costs For Payment Processing & Software

Square gets a lot of love from merchants because of its clear, affordable pricing. While the days of Square’s flat 2.75% per transaction, regardless of card type, now appear to be over, the company still offers a lot of value to its customers. Pricing Square for your business can be slightly more complicated than you’d expect, given the wide range of services the company offers merchants. So how much does Square charge?

That honestly depends on what you plan to do with Square. Are you only processing transactions in person? Do you sell online? Do you use the virtual terminal or card-on-file features? Do you want any of the software add-ons?

Square Rates At A Glance

Square rates vary by the type of transaction you’re processing. Depending on where the transaction takes place/the type of transaction, you could pay one of four rates with Square:

• 2.5% + $0.10
• 2.6%+ $0.10
• 2.9% + $0.30
• 3.5% + $0.15

Square Credit Card Processing Fees

I’m not going to go into any heavy number crunching here. If you want to learn how to calculate your fees, I recommend checking out the cost comparison article, Is Square Really the Cheapest Processor for Your Business? That will show you how to calculate your fees and how well Square credit card fees stack up against an interchange-plus pricing plan.

Square deducts its fees from the total value of your transaction — including tax and tip. The fees are deducted before the funds ever hit your bank account (instead of deducting an entire month’s worth of fees at once).

In the US, Square processes debit cards the same as credit cards. There is no PIN debit option. However, Canadian merchants using Square can accept Interac debit transactions.

Now, let’s look at Square’s merchant fees for its specific programs.

Square Reader Fees

If you use Square Point of Sale’s mobile card reader on compatible devices (smartphones, tablets, etc.), you’ll pay the standard 2.6% + $0.10, whether you’re dipping a chip card, swiping a gift card, or tapping with an NFC transaction. This also applies to businesses that opt for one of Square’s all-in-one pieces of hardware: Square Register or Square Terminal. Previously, there had been different price schemes for different hardware, but it’s all been standardized to 2.6% + $0.10 for any customer who joined after August 2019. You can also qualify for Square’s lower 2.5% + $0.10 price with certain paid monthly plans (see below).

This is called flat-rate pricing in payment processing, in contrast to tiered rates, subscription rates, or interchange-plus rates. Flat rates tend to, well, flatten your processing rates, making small transactions more expensive and larger transactions less expensive. While we recommend interchange-plus or subscription pricing in most cases, some businesses may appreciate the predictability of a fixed, flat-rate charge.

Square’s flat-rate pricing also has some advantages when processing cards that have higher interchange rates, as is often the case with American Express. Square charges the same rate for all types of cards, including American Express. While this means you pay a bigger markup over interchange for your typical Mastercard or Visa card, it also means you save money on American Express and many business/rewards cards.

Square Invoice Fees

Square Invoice charges a fee of 2.9% + $0.30 per online invoice sent, except when using Square’s Card on File system, which saves customer card information. In this case, the transaction incurs a fee of 3.5% + $0.15. This reflects the fact that these transactions are considered card-not-present and have some additional security concerns.

The fees are applied when the customer pays the invoice.

Square Online Fees

Square’s online fee encompasses, as you might expect, typical online transactions. This includes the Square Online Store, Square Online Checkout, eCommerce API, and online invoicing when not using a card on file (see above). Because these are card-not-present transactions, they’re charged a higher fee than point of sale transactions. That fee is 2.9% + $0.30.

Coincidentally, this is the same rate charged by Stripe, another popular third-party processor specializing in online transactions that also uses flat-rate pricing. It’s slightly higher than the average cost for an online transaction, which is between a 2.3%-2.5% interchange rate. That said, it’s not too far outside the median, and Square provides a lot of additional value.

Square Keyed Entry & Virtual Terminal Fees

Finally, there’s the “riskiest” of card-not-present transactions, those that are manually keyed in with one of Square’s apps or virtual terminal. It also covers saved card information that is used in lieu of swiping, dipping, etc. A common use for this might be, for example, taking a payment over the phone or manually entering the information of a malfunctioning chip card that also fails to swipe.

Square uses flat-rate pricing here as well but at a higher rate of 3.5% + $0.15. Square’s pricing is a little unusual compared to its competitors in that the percentage rate is on the high side —PayPal’s is 3.1%, Shopify’s is 2.9% — but the flat portion of it is half as expensive at $0.15 rather than $0.30. What this means in practice is Square will be cheaper for smaller transactions and more expensive for larger ones, at least where keyed-in transactions are concerned.

Square Pricing For POS Systems

Now let’s take a look at one-time and recurring fees. First, the good news: Square does indeed offer a free plan, so you can potentially use Square while only paying transaction fees. This means using the Square payment app and either keying in transactions or taking advantage of its one free Square reader offer (note: Square’s hardware costs will be covered later on in the Other Square Costs To Know About section).

Square Point Of Sale Costs

Square’s Point of Sale software is free, so if you’re going this route, you’ll only have to worry about hardware costs unless you want to purchase optional features, such as loyalty plans ($45/month).

The free app includes some basic inventory, reporting, and employee management tools.

Square For Retail Costs

Square for Retail can be easily confused for Square Point of Sale, as both are free at the entry point. Weirdly, at the free level, Square for Retail offers fewer options than Square Point of Sale, so if you’re looking to get the most bang for your no-buck, you’re better off with the other software.

Square for Retail plans are:

• Free: The free plan lets you have any number of devices at any number of locations. You’ll also get a free online store and basic inventory tools. Processing rates are the standard 2.6% + $0.10 (in-person) and 2.9% + $0.30 (online).
• Plus: The Plus plan costs $60/month per location. It otherwise provides all the functionality of the free plan plus advanced inventory tools, advanced retail reports, and Square Team Management. You’ll also get Square’s elusive 2.5% + $0.10 (in-person) rate. Online transactions are still 2.9% + $0.30, however.
• Premium: Custom pricing available to customers processing over $250K per year. These plans are negotiated on an individual basis and include everything in the Plus plan, along with discounts on other Square services.

Square For Restaurants Costs

Square for Restaurants is Square’s foray into industry-specific software, and you can get it for free. Unlike Square for Retail, Square for Restaurants offers a lot of unique functionality in its basic configuration.

You’ll get:

• M-F 6 AM to 6 PM PT customer support
• Fast-order entry
• Table management
• Menu management
• Order management
• Remote device management
• Multilocation management
• Open checks
• Repeat items
• Dining preferences
• Dark mode
• Auto gratuity
• Advanced discounts
• Square Team Management

Here are the Square for Restaurants plans:

• Free: Everything listed above, with unlimited devices and locations.
• Plus: This plan costs $60/month, and an additional $40/month per location. You’ll get everything in the free plan, plus:
  • 24/7 customer support
  • Auto-86ing and item counts
  • Shared device settings
  • Seat management
  • Course management
  • Live sales
  • Advanced reporting
  • Reopen closed checks
  • Shift reports
  • Close-of-day reports
  • Auto gratuity, including party size thresholds
  • Closing procedures
  • Section sales reports
  • Square Team Plus
• Premium: Has custom pricing and includes everything in the Plus plan as well as offers discounted rates on other Square services.

Square Appointments Costs

Square Appointments is a software that combines booking functionality with POS. It’s geared toward small businesses that offer scheduled appointments (spas, for example).

Square Appointments’ pricing is based on the number of employees with whom clients can book appointments.

• Free: Booking for one employee/sole proprietor. Transactions are charged at 2.6% + $0.10.
• $50/mo: Booking for two to five employees. Additionally, transactions are processed at Square’s lowest 2.5% + $0.10.
• $90/mo: Booking for six to ten employees. Additionally, transactions are processed at Square’s lowest 2.5% + $0.10.

Square Prices For Other Software

Square is a comprehensive platform with many optional add-ons for businesses that want to expand its functionality. You don’t need these to process transactions, but they may be worth considering if they meet your business’s specific needs.

Team Management: Starting At Free

Team Management is Square’s timekeeping add-on. It also supports user permissions so that you can restrict access to certain features as necessary. The permission levels are customizable, too, so you’re not locked into specific roles and abilities; just be aware that the free version only supports one set of permissions. Employee management has a tip reconciliation feature and is included at no extra charge in Square for Retail.

The Team Plus version, which has more advanced features, is $35/month per location, but there’s a 30-day free trial available if you’re curious. It supports multiple wage rates, sales reporting, and sales reporting.

Payroll: $29 per month + $5 per employee

Payroll isn’t available in every state yet, but it’s getting very, very close. For a $29 monthly base subscription plus $5 per employee per month, you’ll get timekeeping, direct deposit, records of time off and sick days, payroll tax filing, workers comp, and more. Square supports hourly wages, salaries, and flat payments, too. There’s also a contractors-only plan that simply costs $5 per month per contractor, with no monthly subscription required.

It’s worth noting that while you do get timekeeping with Payroll, you don’t get the other Employee Management features, such as permissions settings. For that, you’ll have to subscribe to both services.

Loyalty: Starting At $45 Per Month

Square places its loyalty program under the umbrella of “customer engagement,” along with marketing and customer feedback, so it’s all very integrated. Square’s digital loyalty program lets you reward customers for repeat visits. The rewards scheme is customizable, so you can select the rewards and set the parameters to earn them and give names to the reward scheme itself. The whole system runs from within the Point of Sale app. Square for Restaurants and Square for Retail also support Square’s loyalty program.

Marketing: Starting At $15 Per Month

Square’s customer engagement tools include a customer database, which you can use to get feedback as well as send out marketing emails. With the customer database integration, you can keep records of what customers buy (and when) and then use that information to target customers with specific recommendations or special offers. Pricing starts at $15/month and scales according to the number of loyalty visits per location.

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Other Square Costs To Know About

How much does Square charge for all of its administrative services? Usually, this is where I’d go on about any additional fees: PCI compliance, chargebacks, etc. However, I’m just going to take a direct quote from Square’s Help Center to explain:

• No hidden fees! There are no fees for:
  • Activation
  • Downloading the Square Point of Sale app
  • Chargebacks and dispute management
  • Square support
  • Refunds
  • Advanced reporting tools
  • Account inactivity
  • PCI compliance
  • Account takeover protection
  • End-to-end encrypted payments
  • Active fraud prevention
  • Next-business-day deposits
  • Free Square Reader for magstripe
  • Early termination

Seriously, that’s a pretty awesome deal for most merchants. Almost every other payment processor will still charge you fees for a refund, at the very least. Most will charge you a fee for a chargeback as well — usually $15-$25 on top of what’s deducted to cover the transaction.

Square even offers $250 per month in chargeback protection. This only applies to qualified transactions, however. But if you encounter a chargeback and it falls under the requirements, Square will cover the cost, meaning it won’t deduct anything from your account.

So what does Square charge extra for?

Scheduled & Instant Deposits

There is one circumstance under which you might pay an extra fee, and it’s entirely optional. Square deposits most funds in your account within 48 hours. However, if you need your money sooner, you can opt for a scheduled deposit or instant deposit. It’ll cost you 1% of the transfer value, so if you transfer $250, you will pay $2.50, leaving you with $247.50.

Risk Manager

Risk Manager is a tool designed to help spot fraud in online payments. You can enable it through your Square Dashboard and use it to create rules for triggering alerts when a condition is fulfilled during an online payment. Risk Manager is available as a free 90-day trial, after which it costs an additional $0.06 per online transaction.

Gift Cards

Square allows businesses to sell gift cards and track them with the Square App or Dashboard. Pricing is as follows:

• Digital: 2.9% + $0.30 transaction rate on a customer’s purchase of the card
• Starter Packs: $40/pack
• Quick Cards: Cards created with a template; $0.95/each, minimum 75 card pack
• Custom Cards: Upload your own art (takes 15 business days to produce; $0.80, minimum 75 card pack

How Much Is A Square Reader?

You have several different options for acquiring Square hardware:

• Square Reader, Magstripe Only: This plugs into a mobile device, allowing you to swipe cards. Your first reader is free when you sign up for Square. Additional readers will run you $10/each.
• Square Reader, Contactless & Chip: Allows you to accept dip and tap transactions. These go for $49/each.
• Square Stand, Contactless & Chip: This is Square’s flagship countertop point of sale setup, and it connects to an iPad. You can either buy it outright for $169 or pay $16/month installments for 12 months.
• Square Terminal: An all-in-one device for processing payments. You can buy it for $299 or $27/month for 12 months.
• Square Register: A full-featured point of sale system that bundles payments, software, and hardware. It comes with a tablet and customer display, and it costs $799 or $39/month for 24 months.

Check out our feature on Square hardware and bundles for a more in-depth look.

How Much Does It Cost To Use Square?

If you guessed the answer is “that depends,” congratulations! It depends.

Since that’s probably not a very useful answer to you, let’s imagine a few case studies and approximate how much each of them would cost.

Merchant 1

Merchant 1 is a small, budget-conscious operation doing roughly $3K/month in sales with an average ticket of $20. They’re keeping it simple and using just the free reader and the free Square POS app. At the 2.6% + $0.10 rate, they’re looking at about $0.62 per transaction. With around 150 transactions a month, Square will cost Merchant 1 around $93/month.

Merchant 2

Merchant 2 is a single-location quick-serve restaurant with Square for Restaurants, a Square Stand, and two terminals doing $7,500 a month in card sales with an average ticket of $10. Let’s assume they’re still paying off the hardware, so that’s $70/month in fixed fees. Square for Restaurants transactions are charged 2.6% + $0.10 for all plans. With 750 transactions a month costing around $0.36 per transaction, they’ll spend about $270 in transaction fees. In total, that’s about $340/month in total Square costs.

Merchant 3

Merchant 3 is a retail store with multiple locations and a Square Register at each location. The store does around $10K/month in card sales, with an average ticket of $50. Let’s assume the Square Registers are still being paid off. Let’s also say Merchant 3 opted for the Square Retail Plus plan to get access to advanced inventory tools. That’ll cost $180/month. The three Square Registers will cost $117/month. The transaction costs, at 2.5% + $0.10, will run an average of $1.25 each. With around 200 transactions a month, the transaction cost per month will be around $250. In total, Merchant 3 is spending around $547/month on Square.

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Square Rates & Fees FAQ

The Bottom Line On Square Credit Card Fees

One of the reasons Square is so well regarded at Merchant Maverick and why it’s so popular with merchants is that the company makes it very easy to figure out exactly what you’re paying. There are no hidden fees or additional costs apart from processing fees and optional software. That said, you’ll want to make sure Square is still the best option for you. In particular, Square offers incredible value to businesses that want to process credit card transactions, but don’t necessarily make a lot of them. High-volume, low-ticket-sale businesses may find Square to be a bit on the expensive side.

If you’re new to Square and trying to figure out how much Square is going to cost you, all of the numbers can seem overwhelming. Start by figuring out which of Square’s services you’ll actually use regularly — specifically, for online and in-person sales. Invoices might make up a significant portion of your sales too. You don’t really need to worry about estimating keyed entry and other less-common transactions; just plan for some transactions to cost a little bit more. The software costs are also predictable.

Don’t forget to check out our Square review to see if Square is a good fit for you. If you have more questions about Square, feel free to post them below! We’re always here to help.

Recommended Reading: 

• Square Register Review
• Square Terminal Review
• The Complete Guide To Choosing Square Credit Card Readers & Cash Register Bundles
• Square Online Store Review
• Square Online Payments Guide: How To Use Square’s Online Store, Checkout, & Other Tools
• Square Invoices Review
• How To Send An Invoice With Square & Get Paid Faster