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- Date Established
- San Francisco, CA
- Free processing on first $1000 in sales
- No monthly fees or early termination fee
- Simple and predictable processing rates
- Inexpensive chip card readers available
- Advanced POS features included
- Suitable for foodservice and retail
- Can’t use your own merchant account or gateway
- Not suitable for mid-to-high-risk businesses
- Withheld funds and sudden terminations may occur
We’ve been following Square since it launched in 2009, back when the idea of a swipe-based smartphone processing system with no monthly fee and no equipment cost sounded more or less like a fairy tale: too good to be true. Fast forward to 2016, and look around. There are many mobile payment solutions that claim to deliver on that promise. In fact, merchants have come to expect nothing less than mobile, pay-as-you-go solutions available to everyone. Even the smallest businesses, which might have never processed a dollar before, want the lowest rates possible, with no monthly fees. Square — and a host of others — have obliged. However, these contenders just can’t compete with the small business hub that Square has become.
Square is, without a doubt, the most feature-rich and advanced mobile processing (mPOS) solution you can find without a monthly fee. To get anywhere near this kind of functionality, you would normally have to go with an advanced iPad POS and pay (at the very least) $60 per month, plus processing rates that would not necessarily be lower than Square’s. Even PayPal Here (and by extension, PayPal itself) cannot rival the sheer number of features available. Instead, PayPal seems to prefer integrations and partnerships with third-party services that can get you what you need.
The cost is easily one of Square’s biggest draws. A flat rate of 2.75% for all swiped transactions, 3.5% + $0.15 for keyed transactions, and 2.9% + $0.30 for online transactions. No monthly fee. No statement fees. No monthly minimum. Even without the Square Register POS, this is an extraordinary deal for many merchants, especially new ones without an established processing history. (For comparison, PayPal charges 2.7% per swipe with the PayPal Here app, 2.9% + $0.30 for online transactions, and 3.5% + $0.15 for keyed transactions).
So when you toss in a highly capable iPad POS (and smartphone-friendly mobile app) for free, the draw is almost irresistible.
And there’s more! If you want a seamless transition between online and in-person (or in-store), Square also provides you with a sleek online store that syncs with your in-app inventory, including inventory counts. There’s an e-invoicing solution, online ordering option, basic customer management, advanced analytics, tons of app integrations, PLUS an API for custom solutions. You get all of this for no monthly fee and low rates, especially if you have a low volume and/or low average tickets.
So at this point, you must be wondering, if we like Square so much, why no five-star rating? It really boils down to two related and significant Achilles’ heels. One: Account instability/funding holds. Two: Inconsistent customer support. If you’ve even glanced at our comments section, you know exactly what I mean. A major contributing factor to Square’s issues is the fact that it aggregates payments and accepts almost everyone who applies, which exposes the company to inherently greater risk. That in turn has lead to a very active risk mitigation department, which makes the final call about which accounts are terminated.
I’m not ready to wholeheartedly and without reservation recommend Square to all business owners. There are some companies, and types of businesses, that are better off with a traditional merchant account. Check out our article, Is Square Right For Your Business?, before reading our Square review.
If you fall into this category, or just can’t risk having your funds withheld, then go with a more reliable solution — namely, a merchant account from one of our top-rated processors. But if you need only sporadic service, you have low ticket values or generally low volume, Square may just be your best bet.
One downside with Square is that even if you love the Square Register POS, you can’t use it without Square’s credit card processing. So if you are wary of processing with Square, check out ShopKeep POS. It’s a great, high-powered alternative that works with many different payment processors.
If you want pay-as-you go mobile card processing and a free app, I recommend you check out our Square vs. PayPal Here article and decide for yourself which of our two favorite mobile payments services is right for you.
Square earns a 4-star rating for its ease of use, its astounding feature set, transparent pricing, and its overall status as a powerhouse ecosystem for merchants. If it can work out its issues with account holds or terminations, we’ll gladly raise that score, but not until then.
Read on for a full breakdown of Square’s services, its advantages, and disadvantages. If you’ve worked with Square, for better or worse, please comment with your thoughts!
Square’s POS and back-office features are unmatched by any other free mobile processing system. It’s not quite up to snuff when compared to more advanced (and expensive) systems, but with no monthly fee it’s really tough to beat. Here are the major features worth noting.
- Payment Processing: This is the core of what Square does. Since you can’t get any of Square’s other features without also agreeing to process credit card transactions through them, it’s not right to just gloss over it. Square has, since its inception, grown from just a mobile POS to a payments system that also supports invoicing and e-commerce (a feature it is now improving on steadily).
- POS App: We’ve said that the Square Register POS app is just about the most powerful app you can get for free, and it rivals many paid options, too. While the app is remarkably easy to use, it is incredibly feature rich and lets you, the merchant, decide how to run things. You can set tips and discounts, record cash and check transactions, handle split tenders, and much, much more. App features include:
- Receipt printing (iPad only)
- Kitchen ticket printing (iPad only)
- Kitchen display compatibility (iPad only)
- Signature and tip on paper receipt (iPad only)
- Split tender
- Show change for cash
- Cash/check reporting
- Custom transaction amounts
- Tips by %
- Tips by $
- Discounts by %
- Discounts by $
- Full and partial refunds
- Signature off option on small tickets (under $25)
- Emailed receipts
- SMS receipts
- Customizable receipts
- Inventory management: Square’s new inventory management system is the most advanced I’ve seen from any mobile processor with no monthly fee (if you need a more complete system, check out our inventory management reviews). Note that many inventory features can only be accessed in the iPad app or online, not in the basic smartphone app. Features include:
- Import inventory via CSV file
- Inventory count
- Barcode scanning
- Multiple tax rates
- Item categories/varieties
- Item add-ons/modifications
- Online and in-store inventory sync
- Item pictures/descriptions
- e-Commerce/Online ordering:
- Webstore hosting: Square will host your online store if you don’t want to bother with buying a domain, finding hosting, choosing a shopping cart software and building the site yourself (put like that, why would you want to!?). Your URL semi-customizable (www.mkt.com/yourstorename), but layout — while attractive — is dictated by Square’s template. One really nice thing here is that, unlike more simplistic solutions, Square lets customers select a shipping option if you have multiple options (such as first-class vs priority). That said, having your own domain and website is a powerful business asset that makes you appear more reputable to many consumers. So be sure to weigh the advantages of each setup.
- Payment Gateway for e-commerce sites: If you have a website built already, and it’s powered by BigCommerce, Weebly, or Ecwid, you can integrate Square directly to process payments. I’d like to see more names on this list, but with the API (see the next point), it’s less of a concern.
- Developer APIs: Have your own site with a different shopping cart software? Your own mobile POS app? Take advantage of Square’s Developer APIs to implement your own custom solution (at no additional charge). You can also get APIs to link your inventory, employee management, and sales analytics services with Square.
- Online menu ordering: This operates just like the webstore, and allows customers to place and pay for an order for pickup. (You can also add Square’s Caviar service to implement a delivery option.)
- e-Invoicing: Manage invoices in-app or online. Invoices can be saved or sent immediately. It’s a basic system, but wholly functional and should cover most of your needs. It does not integrate with your Square inventory, however.
Other Square Features:
- Customer feedback management: Here’s a cool feature. It’s called Square Feedback, this system prompts customers to leave feedback about their experience not on social media, but directly to you. This allows you to manage your reputation, quickly identify problems, and prevent public complaints from surfacing on the web. You also get access to details like purchase history, previous feedback, and average spending…all at no extra charge (formerly $10/month for advanced customer insights). You can also issue refunds or coupons from Square Feedback. However, please note that this feature is limited to debit/credit transactions only (no cash transaction) and is really best used when you also start taking advantage of Square’s customer database feature.
- Advanced reporting: Square offers some of the best online reporting you’ll see in a pay-as-you-go provider (and even many monthly fee-based providers). You can generate real-time reports by the hour, day, week, month, or year from your online Square Dashboard, with many reports available in the iPad app. Reports can focus on specific item categories, mobile staff sales, sales by item, sales by payment method and more. Check out this page for a more complete list of reports offered. Many of the reports are exportable by CSV. Speaking of reports and data, though, Square also offers this gem:
- Customer database: I consider this Square feature a light version of what Swipely is doing. Its customer overview is no where near as in-depth, but has some cool features regardless. This page displays various customer behaviors, including sales and visits by new versus returning customers and customer visit frequency. These charts display activity over the time period indicated. You can segment guests based on frequency of visits, and then use those segmented groups in your email marketing. The customer database also integrates with Square’s invoices and appointments. It is really an amazing feature given the the price point (free).
- Email marketing: I’ve said this before….Square really is an entire ecosystem for businesses. Send newsletters and special offers to your email subscriber using Square’s service, and take advantage of the data from your customer database to do so.
- Appointments: Operate a salon or an office? Integrate Square’s appointment-setting software for a low monthly cost. As we’ve said, this integrates with Square’s customer database so you can make notes and make the most of the experience for your customers.
- Loyalty/rewards program: Square allows you to give your customers digital punch cards. You set how much must be spent in order to earn a punch, and how many punches to earn a reward. You set the reward in the form of either a dollars off coupon or a percentage off coupon. A nice thing about this is that it allows both cash and card transactions to count toward rewards, as long as customers use the same email or phone number for each transaction.
- Employee management and payroll: I did say Square is becoming an entire ecosystem for merchants, and that extends into more backend features. The company offers both employee management (setting roles/permissions for access to features/data, time-keeping, analytics, and more) as well as payroll (available in 8 states at the time of writing).
- Offline Mode card processing: Sometimes, you just can’t survive if the Internet goes out at your place of business. Sometimes you can’t get cellular signal on your smartphone and there isn’t even the tiniest bit of Wi-Fi to be had. That’s where Square’s Offline Mode comes in handy. No Internet? No problem. Square will let you continue to process credit cards when there is no Internet (Wi-Fi or cellular) available. The first caveat is that you are responsible for any transactions that would have been declined normally. The second is that you need to connect your smartphone or tablet to the Internet within 3 days for any of the transactions to go through. If you don’t need this feature or think the risk of processing a card that should have been declined is too high, don’t use it. If you do need it, well…there aren’t many other options out there that even allow offline processing.
- Chargeback protection: Square offers sellers up to $250 in chargeback protection per month. You upload your documentation for the dispute and Square handles the rest — and if the sale in question is eligible for protection, you don’t have to pay for anything even if the dispute isn’t decided in your favor. The question, of course, is how many transactions are actually eligible for this rather awesome feature.
- Square Capital: Need a little extra cash flow for your business? Square Capital will provide business loans as soon as the next business day. You make your payments by deducting a percentage of what you process. (While you’re at it, check out our other resources, The 10 Best Merchant Cash Advance Alternatives, and How to Get a Good Deal on a Cash Advance Loan.)
Gift cards: Square has rolled out gift cards for merchants. You can choose from a pre-designed card (sold in packs of 20 with next-day shipping), a template (minimum order of 125 cards and 3-day production times) or upload a completely custom design (500-card minimum and 15-day production time). There’s no redemption fee and the cards are even reloadable. Analytics let you track how much of the gift cards’ balances is still unspent and more.
Payroll: Payroll started as a single-state experiment, but Square has expanded to 8 states since it’s launch and I don’t see why it wouldn’t continue to do so. Just expect it to take some time before it reaches every state. Square also offers employee management (including timekeeping), so you really can centralize your business management.
Instant deposits: One of the greatest advantages to using PayPal is that your funds have been available almost instantly in the majority of cases. Now, Square offers the ability to initiate instant deposits. Most transactions appear in your bank account within 48 hours, but if you log into Square an initiate an instant deposit, the funds should appear in your bank account within a minute. Square charges you 1% of the deposit amount for this feature (and remember, you’re still paying processing fees on top of that).
I am looking forward to seeing what else Square can provide for merchants. The company has already grown so much, but there’s still so many more directions it could go.
Square has so much that it’s hard to imagine this app missing anything at all. And really, you’re right. I think PayPal Here is missing more than Square is these days, but that doesn’t mean Square is perfect.
First and foremost: I think it would be great to see Square open up the option for merchants to use its POS with other payment processors.
I’d also love to see a GPS feature that can auto-detect tax rate. As it is, Square’s tax feature is quite robust. You can choose whether to charge tax for particular items and even set different rates. You can also modify tax rates when you’re charging the purchase. All of these are good things.
Officially, Square doesn’t support recurring billing. You can technically do it using Square’s customer management feature, but the company recommends that you get a signed, written agreement specifying the terms (value of each transaction, frequency, etc.) If you need this feature, you may want to look elsewhere.
Pricing/Fees and Rates:
Square’s pricing is simple. While you can’t get interchange-plus pricing and volume discounts are only available for very large companies, you also won’t have to deal with pricing tiers. Nor will you have to navigate hidden fees. In fact, you won’t have to navigate anything beyond Square’s basic processing fees whatsoever, unless you opt for add-on services.
Basic Rates and Fees:
- Monthly fee: $0
- Headphone jack reader: $0 (Note that you are liable for the costs of any fraud brought on by processing an EMV chip card using the magstripe reader.)
- Swiped transactions: 2.75%
- Invoice transactions: 2.75%
- Keyed-in transactions: 3.5% + $0.15
- eCommerce transactions: 2.9% + $0.30
- Other fees: None
- Square Stand: $99
- EMV-only headphone jack card reader: $29 (no contactless payments enabled. We unboxed and review the Square EMV reader here, so be sure to check it out)
- EMV/NFC Bluetooth-powered card reader: $49 (note: a free basic magstripe reader is also included)
- Dock for EMV/NFC reader: $29
- Gift cards: per-card cost (starting at $2 per card and dropping as you order more)
- Square Appointments: $30 for one person, $50 for 2-5 staff, $90 for unlimited staff.
- Square Payroll: $20 monthly subscription + $5 per employee paid
- Employee Management: $5 per employee
- Online orders for restaurants: 2.9% plus 30¢ per pickup order
- Email marketing: $15 per month and up, depending on package
These are not bad costs. In fact, I think they’re pretty amazing and a huge mark in Square’s favor. Here’s why:
Square’s EMV readers are cheaper than any terminal and just about any other EMV reader on the market (especially EMV/NFC capable readers). The POS is free. The processing rates are exactly on par with the majority of pay-as-you-go mobile processors. The costs for the add-on services are absolutely competitive.
The only way you’re going to get lower processing rates and get a comparable suite of features is to open a merchant account. There are a few mobile processors that offer lower rates, but their apps aren’t even close to being as robust as Square’s and you don’t get any of the extra features. Even if you do get a merchant account, you’re going to have to begin a search for a POS that gives you all the features you need.
As you start processing higher volumes or larger transactions, a merchant account is certainly the most stable option. But for a new merchant or a low-volume business, it is hard to argue with the sheer value that Square presents.
According to the Square site, merchants start off with a per transaction limit of $50,000. While that’s the stated limit, the reality is that many merchants encounter trouble at a much lower threshold. In some of the BBB complaints we’ve read, Square has recommended keeping transactions below $3,000, although we have read of transactions in the hundreds-of-dollars range that have triggered suspensions or terminations.
This is one of the challenges of using Square. Most merchants have no idea when they will cross the invisible line and trigger an account suspension or investigation by Square. A busier-than-average month or a significantly larger-than-average ticket are good ways to attract unwanted attention from Square’s risk department, which might request additional information from you to verify.
Contract Length and Early Termination Fee:
There is no early termination fee or locked-in contracts with Square, which is true of almost all mobile-based processors. Every add-on service is month-to-month and there’s a 30-day free trial for each, which means there is essentially no risk. Be warned that you must wait the full 30 days in your trial period before cancelling or renewing your subscription.
This is really what we like to see at Merchant Maverick. We just wish more companies in the payment industry would follow suit.
Sales and Advertising Transparency:
For me, Square does very, very well with transparency. Everything the company says in its advertising and marketing checks out, and there’s no wacky sales gimmicks or promises of unbeatable rates, free rate reviews, etc. The “free” basic magstripe reader is actually free and you can easily find the price for every aspect of Square’s service on a corresponding web page.
The company could definitely provide more information about account holds, why they happen and how to avoid them. This is the biggest complaint from merchants using Square, and surely the company is aware of this. There really isn’t anything about transaction limits or the ideal ticket size at all on the site.
Aside from that issues, however, I couldn’t ask for more from Square. All fees, rates, and important information appears in their sales copy, and just about everything else you could ever want to know about processing with Square appears in detail within their extensive Help Center.
I generally find that merchant account providers struggle with marketing in the 21st century. Many of them operate like it’s still 1995. Some are marginally better — they work like it’s 2006 . But that’s still a full decade behind the times. I fully expect companies that serve small businesses to know how to market to small businesses. And that means putting information online, providing helpful content, and knowing how to use social media.
Square has a really solid handle on all of these issues. It’s knowledge base is incredible, and you don’t even need an account to look through it. That’s great if you want to compare how specific features work before you open an account. The blog (called Townsquare) is full of content targeting merchants and businesses of all types, reflecting Square’s diverse customer base. And in terms of social media, you’ll find an active Facebook page, an even more active Twitter feed (@Square), a dedicated Twitter support feed (@SqSupport), and a LinkedIn page.
The company at least seems to be addressing complaints about customer service on its social media channels, and not just the @SqSupport Twitter channel. You can message the Facebook page directly if you need help. All of its social media channels are active, with a good mix of important news, helpful blog posts, and funny content. This is absolutely essential, and I like that Square is addressing a really broad range of merchants, reflecting the diverse nature of businesses. I personally know lots of artists who rely on the service, and quite a few local restaurants. But there are many, many others who do, and all of them have unique needs and preferences.
It might sound like I’m nitpicking, but a company that doesn’t know how to reach small businesses to market its services has no business providing its services to those small businesses. But I am thrilled about how open, transparent, and helpful Square is on the marketing side of things.
Ease of Use:
After creating a “demo” shop with a couple different categories and products, I tested how long it took me to get familiar with the Square interface. I had the whole thing down in under an hour and was impressed by its smooth, intuitive layout. There’s no doubt that Square is doing okay in the looks department.
One interesting thing about the interface is that you can manage the app in different ways. For my demo I downloaded the app onto my iPad and then added all of the categories and products by logging into my Square account on my laptop web browser. All of the inventory additions created on my laptop were quickly synced to the iPad. Square also allows you to add and manage inventory items directly on the iPad, which is not the case for a lot of other cloud POS software.
Just remember that many of the more advanced features are iPad-only, because they’re meant more for merchants who want a traditional register setup. iOS devices overall seem to function well with Square, but because the Android ecosystem is so diverse, you may have different experiences using the app. Square has a list of “devices with known issues” to inform you of potential compatibility difficulties with your device.
I’ve found Square very easy to use. Creating categories, products, discounts, product modifiers, and tax brackets is simple. I am also a fan of the “favorites” category that allows you to keep up to 125 popular products on a virtual “shelf” for quick checkout access.
A final note on ease of use is regarding Square’s recent update to the checkout process for businesses with the tip option enabled. In the past, after swiping their credit card, customers were prompted to a page with a virtual signature pad and the option to leave a tip. Square has divided this process into three parts: first the credit card is swiped, then the customer is directed to the page with the option for a tip, and finally they are asked to sign for their purchase. iTunes is full of frustrated merchants who say they feel the new approach is confusing and makes customers feel like they’re obligated to leave a tip.
Hardware and Software Requirements:
The Square Register app works on Apple devices running the latest version of iOS (iPhone 4s and above), including most iPads, as well as iPod Touches 5th generation or higher. Remember that some features, such as receipt printing, are iPad exclusives, and you can only run a full register setup from an iPad. Square states that its apps may work on some Android tablets but it does not officially support them or guarantee compatibility.
As far as Android support goes, things are a bit spotty. Amazon Kindle devices aren’t compatible at all. Any other Android devices need to be running Android 4.0 or higher, with GPS and Google Play enabled.
It’s also worth noting that there is a third-party bit of hardware that will work with Square on iOS devices. It’s called the Miura M010 reader, and unlike Square’s own EMV/NFC reader, it’s chip-and-pin, not just chip-and-signature. It looks, rather unsurprisingly, like PayPal’s EMV reader (which does work with Android devices). The M010 will cost you $129 through Square, with an optional $30 dock.
Also, Square cannot take payments on laptops or computers, although the backend dashboard area can be accessed from any computer with a web browser and Wi-Fi connection. If you absolutely need a virtual terminal, you should look at a merchant account, PayPal (it’ll cost you an extra $30/month), or Intuit QuickBooks Payments, which includes free use of the Intuit GoPayment mobile app (just pay your swipe fees).
Please note: You are not legally obligated to accept EMV in any way, shape, or form. But you are liable for any transactions processed using a fraudulent credit card, which could easily be more than the cost of one of Square’s EMV card readers. You’ll need a 3.5 mm headphone jack for the EMV-only or basic magstripe readers, or Bluetooth enabled for the EMV/NFC readers.
Integrations and Add-Ons:
Square has a long list of add-ons and integration compatibility. We’re breaking them down by type of service so you can find what you need more easily:
- Fresh KDS
- When I Work
If you’re a programmer or you have one on staff, you can also take advantage of Square’s APIs to create custom solutions.
Customer Service and Technical Support:
You have a few ways to reach out to Square if you have a problem. You can message the Facebook page or tweet @SqSupport on social media, or send Square an email. But if you’re in a pinch and need an answer right away, you probably want phone support, which is available Monday through Friday, 6 a.m. to 6 p.m. Pacific Time. Those aren’t the best hours, but they should work for the majority of merchants. Square is quick to brag that most other departments keep in close contact with the support team, including the executives. There’s also a useful site, www.issquareup.com, which will tell you whether any of Square’s services are having technical issues.
To say customer support has been a problem at Square is an understatement. For a long time, Square didn’t offer phone support at all. Its email support was basically 100% cookie-cutter, and getting a personal, well-considered, account-specific reply was nearly impossible. In 2013, Square introduced a phone support system, which at first seemed difficult to use and was performing poorly. By late 2014, however, the phone support system seemed to have improved.
That’s not to say that Square’s system is perfect. The phone support system is still limited only to merchants who can obtain a customer code and then dial in. People whose accounts have been terminated cannot reach Square on the phone, and those who have their accounts put on hold also seem to have trouble reaching out.
With more than 2 million merchants as Square customers, support is incredibly difficult to execute in a cost-effective way. Add in the relative lack of processing experience these merchants tend to have, along with a lack of proper explanation of the pitfalls of third-party processing, and it’s certainly a challenging situation. We also have to acknowledge that there are shady businesses that take advantage of Square’s “come as you are” approach, which ultimately hurts everyone else — consumers, other merchants, and of course Square itself. Other well-meaning businesses sign up without doing their research, not knowing that theirs is a high-risk industry (which Square names on its Prohibited Goods and Services list), and promptly find their accounts suspended or terminated.
Even larger processors with more resources have trouble executing customer support well. But we know it can done well. And, we have to give credit where credit is due: Square is actually putting in the effort. So I am hopeful that Square will continue to improve.
Square’s shortcomings in account-specific customer support are mitigated by its industry-leading (and I do mean it; I’m not just throwing that phrase around) knowledge base for self-service customer support. The vast majority of your problems with or questions regarding the Square system will be answered in this online user manual. It is truly extensive, and contains helpful screen captures and walk-through for every single feature offered. This is, in my opinion, the gold standard for merchant services support pages.
Negative Reviews and Complaints:
There’s no lack of complaints against Square across the web. Basically every consumer advocacy outlet and review site you can name has multiple complaints or scam warnings regarding Square and Square Register. A quick Google search will produce way more feedback on Square then you could ever hope to read.
With that said, Square has an A+ rating with the BBB (improved from a B+ in early 2014) despite the overwhelmingly negative reviews. You’ll also see the company has had 1334 complaints filed in the last 3 years (with 618 closed in the last 12 months). That’s actually up from 1150 complaints at our last check-in, and nearly half of them in the past year. That’s not what we like to see, but the complaint volume is still low when you consider that Square’s customer base is 2 million merchants.
It’s also worth noting that you’ll find just over 700 complaints on RipOff Report (703 at the time of writing). However, a good share of these will be duplicates of other comments on the web. Others won’t relate to Square at all — such as apartment complexes with “Square” in the name, or the third-party warranty company Squaretrade. And plenty others are from consumers complaining about merchants they believe have scammed them. So the number of complaints is heavily inflated on the site.
However, there is a common theme to all of the complaints, and they boil down to two closely related issues:
- Poor customer support: This is the number one complaint lodged against Square. Some Square merchants even go so far as to suggest that Square is a scam because of their appalling track record of processing funds that have been placed on hold. Square support indicates that they will respond to email inquiries within 24 hours. The time frame is sometimes closer to 2-3 days according to a slew of frustrated merchant reports. We are also sad to see complaints about non-responsive support. Fortunately, the social media team seems to be on the ball when it comes to followups. We’ll also say that Square will work with merchants who file a complaint through the BBB, based on what we’ve seen on the BBB page.
- Account stability issues/funding holds: Difficulty with inaccessible funds is a close second in the complaints department, and considering many of the support complaints are in reference to funding holds, this is probably the most important issue. Square’s aggressive fraud prevention tactics have put many small businesses in a position where they can’t access their income because their transactions have raised a general red flag for any number of reasons. Part of the problem here is that Square does not properly disclose/explain the risks involved in third-party processing. If your account is suspended, you may be able to get reinstated if you provide the necessary documentation. This doesn’t always happen, however. Quite a few merchants seem to encounter holds, then provide the information Square requests for verification purposes…only to receive a termination notice.
A third issue that has come up recently is Square’s EMV hardware. The EMV/magstripe reader appears to often arrive on merchants’ doorsteps completely non-functional, or they cease working after just a few weeks. Square appears to be very accommodating as far as replacements go, but that obviously doesn’t do anything to alleviate the liability issue until your new reader arrives. The Bluetooth reader appears to be more reliable, but it can have some issues pairing with your phone. I expect that this issue will be fixed soon, as soon as Square works out the bugs in its hardware.
There is also some good news. Based on BBB complaints, some merchants who submit their documentation are able to get their accounts reactivated, and others have been able to get a resolution to their problems by reaching out to the BBB as well. I’m not going to say Square is the most accommodating company as far as BBB complaints go, but there’s a definite improvement, and I have seen companies that are far more stubborn and much less apologetic.
You’re probably wondering at this point whether Square even deserves its 4-star rating. I encourage you to check out our article on negativity bias to understand our process and why we’ve rated Square as such.
Positive Reviews and Testimonials:
The negative chatter about Square is scary, but there is some good out there! Square has been a really good POS solution for some business owners. Here’s what happy merchants are saying:
- Features/design: Square has, far and away, the most diverse and advanced feature set of any major mobile processing service without a monthly fee. This is why people choose Square, and it’s why it’s managed to eke out four stars despite a pretty formidable load of complaints. See the Features section above for a complete list of all the cool things you can do with Square. People especially love the inventory, reporting, and offline processing options.
- Innovative: Square was really the first to make mobile processing accessible to everyone, and while the competition has gotten tough, Square hasn’t given up or rested on its laurels. The company is constantly rolling out new features that provide EVERYTHING a merchant could ever need.
- Inexpensive: Since square does not charge a per-transaction fee on swiped transactions, low-ticket business stand to save a significant percentage. This is because a $0.10 transaction fee on a $5 ticket is actually 2% added on. When you look at it that way, the 2.75% flat rate starts to look really good. Also, many American Express transactions are actually processed below cost by Square, which might not be sustainable long-term but is great for businesses that process a lot of AmEx cards. The downside is that debit transactions cost way more with Square than they ought to. Even add-on services that cost a monthly fee are comparable to third-party options. Not only that, but Square’s EMV readers are the most inexpensive options available — $29 for an EMV-only reader, and $49 for an EMV/NFC-enabled device.
- Easy to open accounts: The ease of obtaining an account is something of a double-edged sword. On the one hand, it increases Square’s risk and requires a very proactive approach when it comes to fraud prevention. On the other, being able to open an account and process transactions within a few minutes is a huge draw for many businesses.
- E-Commerce support: A free online store is a big draw for new merchants, especially those who aren’t sure the cost of building their own would be justified, or those who just don’t have the upfront capital to invest. While in the long-term you are better off building your own site, this is a great way for merchants to find their footing online. The best part is, now you can actually continue to process with Square when you move to your own website.
You’ll also find more positive reviews and testimonials on Square’s site. I like that there is a mix of short testimonials (with merchant and business names attached) as well as long-form press coverage.
Square is synonymous with mobile payments. It did what no one else had managed before — to make credit card payments accessible to everyone — and has incredible name recognition even with a mess of competitors. The company has experienced growing pains and gotten a bad reputation for holding merchant funds. But, in the middle of 2016, it’s clear that Square is improving and really carving out its niche in the merchant services industry.
That’s not to say there aren’t issues. Square struggles with account stability as a result of its aggregating, and its customer service is by no means perfect. Please remember that Square is not for everyone, despite the company accepting virtually anyone who applies for an account. There’s a long list of prohibited businesses, including “high-risk” products and services. If you fall into this category, you are better off with a merchant account.
Nevertheless, with features like inventory management, advanced reporting, offline processing, online sales and more — all executed very well — Square has more features than I’ve seen from any other no-monthly-fee provider. If you’re willing to pay a bit extra, there are even more great things in store for you. For instance, you’ll find a very reasonably priced gift card solution, a solid scheduling system, and an absolutely gorgeous iPad stand with a built-in card reader.
If you need a solid iPad POS solution but don’t want to gamble with your funds, there’s always ShopKeep, which is compatible with a variety of other processors. You can also check out our other mobile processors, but be aware that they simply don’t have the same sort of robust feature set that Square does, and they face the key issues — account holds and customer service.
As far as value goes, it is very hard to beat Square. Its pricing is absolutely competitive for a pay-as-you-go processor, and the fact that you get an incredibly robust POS and mobile app for free just seals the deal. Square’s additional services allow business to centralize many key functions with one service, with no commitment beyond an affordable monthly fee.
Square keeps its 4-star rating for these reasons. I hope to see account stability continue to improve this year, which could bump that rating up a bit. I am also excited to see where Square might go next. Check out our article, 6 Ways Square Needs to Change After Going Public, for some speculation on that topic.
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