Is Square Safe For Customers? Everything You Need To Know About Square Payments Security

While Square is one of our favorite processors, it is by no means a “one-size-fits-all” solution for every business. But is Square safe?

We can confidently say that Square offers some of the best payment security and data protection in the business for its customers. What’s even better is that it does so at no extra cost. And that’s noteworthy enough to focus a whole post on how it works.

You should have full confidence that your credit card processor keeps both you and your customers safe from fraud in all forms.

Keep reading to find out what security measures Square takes behind the scenes and how you can keep your customer’s data safe and secure with Square’s readers and free POS app.

Is Square Safe For Customers? How Square Protects Consumer Data

First, it’s important to understand what Square is and how it works.

Square is a payment processor, through which businesses can accept credit card payments and other electronic payment forms, such as Apple Pay. When you accept electronic payments, information is passed from your customer’s issuing bank to the acquiring bank, with various points of data exchanges along the way. The vulnerability lies in transferring this information the right way, but there’s potential for risk in storing payment data once you enter it in your system as well.

Below, we’re going to take a look at the hardware and software behind Square processing and find out how Square makes this process secure and takes the burden of risk from your small business for both transfer and storage.

Square Credit Card Readers & Software Protect Customer Information

Let’s take a look at how Square protects customer data through its hardware and software.

• Secure Card Readers: Square encrypts payment data as soon as you swipe, dip, tap, or manually enter the numbers during the sale. Payment encryption makes it harder for anyone to intercept payment data as it is being processed or stored.
• Secure POS Software: It’s important to note that, as a merchant, your customer’s card numbers, magnetic-stripe data, and security codes are never stored on your device when you use Square POS software. Once you key in the information, or the payment is processed, the full credit card details may be stored in an encrypted form but are not visible to you or your employees. This framework means that you don’t have to carry the burden of PCI compliance on your device. Instead, the burden of storage and security falls under Square’s domain.

Square Secure Analyzes Transaction Data & Stops Fraud

Every Square account comes with free fraud monitoring and dispute management — and this is definitely not something you can automatically expect in the payments industry. What that means for you is that instead of paying for dispute resolution if a customer files a chargeback, Square mediates between your customer and the bank on your behalf to win the dispute for you.

Square’s fraud monitoring is powered by both machine learning and in-house security experts. The company also performs fraud evaluations from within its payment network to flag anything suspicious.

For additional protection, Square recently released a tool called Risk Manager. It costs an additional $0.06 per transaction and is likely best suited to very large or high-tech businesses. This service is a customizable risk management system that drills down into why each card payment may be a risk and how to take action.

Is Square Safe For Merchants? How Square Protects Businesses

With Square, you’ll get a few built-in features that we see saving a business time and money. One of the biggest ways the service provides relief for a merchant is its built-in payment security and PCI compliance.

Square PCI Compliance Is Free & Easy

Square covering PCI compliance payment security for no extra charge is a fairly big convenience. When you consider that Square handles SAQ requirements, assessors, and the auditing process — all things that you’d normally need a workforce, budgeting, and time to complete — the value becomes even more substantial. To get a better grasp on what PCI compliance is and what it means for your small business when you accept credit cards, it’s a good idea to do your research on PCI compliance for small businesses.

Square Builds Security Into Its Software

In addition to PCI compliance and encryption, Square also adds additional security layers, including Square’s two-step verification, that protects your merchant account from an attacker potentially linking their bank account.

How Square Enables Remote & Touch-Free Payments

During COVID-19, businesses gave more thought to reducing “touchpoints” during the payment process. Even now, businesses and customers are more conscious about spreading germs during transactions, with contactless payments providing a clear benefit in this regard. Here are a few ways you can take advantage of Square’s secure payment features for touch-free payments.

Accept Contactless 'Tap To Pay' Transactions With Square Hardware

You have a few different hardware options with Square that allow you to take contactless payments.

Square Reader For Contactless & Chip

The simplest and cheapest credit card reader is the Square Reader For Contactless And Chip ($49). With this little reader, you can take chip cards, Apple Pay, and Google Pay for a flat rate of 2.6% + $0.10 per transaction.

Square Terminal

If you are looking for something a bit sturdier for your countertop with a built-in receipt printer, the Square Terminal, pictured above, might be a better option ($299). You can accept every type of payment — swipe, dip, or tap — with the Square Terminal. Accept all major credit cards for the same processing rate of 2.6% + $0.10.

More Countertop Solutions For Contactless Payments

Square has even more options in contactless point of sale. Pictured above is the Square Stand For Contactless And Chip. You’ll need to use an existing compatible iPad or purchase one. The stand now comes in two sizes to accommodate more models. One noteworthy point is that the stand is made to swivel so that you can use it as a customer-facing option as well. It includes a built-in payment reader with a processing rate of 2.6% + $0.10 per swipe, dip, or contactless tap.

Square Register, below, is yet another contactless hardware option, and this one does not even require an iPad. Again, you’ll get the same processing rate of 2.6% + $0.10 on this device.

Regardless of which Square hardware you purchase, your PCI compliance and data security are covered by Square. You have even more options in taking payments without hardware at all, however.

Manually Enter Payments In Square POS Or Virtual Terminal

Whether you want to avoid touching a credit card, or you’re taking a payment over the phone, you can enter a payment manually from your virtual terminal. You’ll find the Square Virtual Terminal at your dashboard, as it’s free with every account. Enter your payment details, and your customer receives an emailed receipt. Consequently, Square automatically sends the customer a receipt if you or an employee should charge them for an additional product or service.

Square POS App via Google Play Store

You can also enter payments from your phone or mobile device via the Square POS app. Note that manually-entered payments have a higher per-transaction processing rate of 3.5% + $0.15, but you don’t pay any additional fees for the virtual terminal service.

Accept Online Payments & Invoices

Square has developed several ways to support contactless payments — even for restaurants and storefronts — with Square Online Checkout. Even without a full Square site, you can put a payment button in an email or anywhere on your existing website. Square Online Checkout also features payment links and SMS text payment links so that your customers can pay you on Square’s fully-hosted and secure payment page.

At your checkout page, you can also enable things such as curbside pickup or delivery so that you can keep serving your customers. Read our full Square Online Checkout post for more information. We also have a post for eCommerce sellers to learn about Square’s free and paid website plans at our Square Online review.

You have yet another way to securely accept payments with Square Invoices. You can create an invoice on your dashboard and send it to your customer for payment or set up recurring payments and reminders.

The Bottom Line: Is Square Safe To Use?

It’s no wonder both merchants and customers can feel anxious about data security. Thankfully, Square has built a solid reputation for itself in the payment world and even has a hand in helping to create global payment security standards. When it comes to payment security, Square is one of the safest processors when it comes to both hardware and its POS software.

When you process with Square, you don’t have to do anything else to be fully PCI compliant and enjoy data security. Square is a great choice for many small businesses — especially startups and lower-volume sellers, but this solution may not be suitable for everyone. Check out our full Square review to find out if Square is right for your small business!

To check out some more options in small business credit card processing, learn about the best credit card processors for retail businesses.

FAQ: Square Security