How To Use Square For Recurring Payments And Invoices
Subscription-based business models seem to be everywhere these days. Emerging wine clubs, personal care-in-a-box subscriptions, wardrobe-of-the-month sites — even supporting a favorite podcast! Clearly, these types of businesses are finding success as people jump into subscriptions to save money, time, or just for the fun of getting a box in the mail. And it’s not just cheese-of-the-month clubs anymore. Software as a Service (SaaS) subscriptions are booming in both business and personal markets. This environment is ripe for subscription business models, but you need the right tools to process recurring payments while protecting your business from security risks.
Of course, businesses that serve a local market with more traditional recurring products and services like gyms, childcare, or home improvement services also rely on recurring payments for their revenue stream — whether that’s automatically charging a credit card or manually sending an invoice.
Choosing a payment processor for this type of business is not a light decision, so let’s take a look at what Square has to offer in terms of solutions geared for the recurring payment model.
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How To Set Up Recurring Payments With Square eCommerce
If you are about to launch an eCommerce subscription-based business or you are looking for a different payment processing setup than the one you have, Square should be on your radar. While Square doesn’t provide complete “out-of-the-box” solutions for eCommerce businesses, they offer three main options for you to get your shop live, with some flexibility under each.
Square Payment Form and Transaction API:
If you are a developer or have the in-house developer support, you can create a custom payment experience that resembles the rest of your site. That means you can save a card on file using the Square Payment Form and set up recurring billing using your own subscription logic. Square also has digital wallet support so you can add Apple Pay, Google Pay, or MasterPass for faster checkout. Here’s more information directly from Square if you opt to embed the payment form:
Square Payment Form provides secure, hosted components for payment data like card number and CVV, while enabling you to make it your own. It’s designed to help buyers enter their card data accurately and quickly. Card data is collected securely and tokenized, never hitting your servers, so you don’t have to worry about PCI compliance.
When you integrate Square Checkout, you can save a card on file safely, and you won’t need as much developer knowledge. This solution is a pre-built workflow that includes digital wallet support, and it’s all hosted on Square’s servers. You won’t have as much wiggle room in regards to customization, but it’s still going to give you a fast, streamlined checkout experience. Square provides a technical reference guide to assist you in building what you need, including setting up recurring billing.
Choose An Integration:
If you want a simpler solution that doesn’t require coding or technical expertise, a plug-in may be just the ticket for you to get up and running quickly. Of all the options available within the Square Dashboard, Chargify jumps out because it seems to offer everything a subscription service would need. According to Chargify:
Chargify bills your customer’s credit card on whatever schedule you define. In addition to processing one-time and recurring transactions, Chargify can handle free trial periods, one-time fees, promotions, refunds, email receipts, and even dunning (reminders for failed credit card payments) management.
Chargify plans start at $99 a month, but you can work your way up the scale when it comes to additional options. In general, Square plug-in selections abound, so you can shop to find the most promising solution for your business right from your Square Dashboard under Apps. Here’s a screenshot of a few options listed:
No matter which solution you decide on, you can rest assured that the burden of PCI compliance and security with payment processing sits on Square’s shoulders, not your own. And the free support you get from Square’s team if there is a chargeback issue also gives some much-needed peace of mind as well.
To find out more and shop eCommerce solutions, head to Square’s website and select eCommerce under the section, Software services to grow your business. If you want to learn more before signing up, read our post, The Best eCommerce Integrations That Work With Square Payments. And if you want to find out more about Square as an eCommerce solution in general, check out our Square Online Store and eCommerce Review.
How To Set Up Square Recurring Invoices
When you’re ready to set up a recurring invoice for your customer, Square makes it easy. You can create an invoice through your Square POS app or from the Square Dashboard. You can then set up the scheduling frequency of your recurring invoice, though you will need your customer to approve their card on file.
Whether you send a one-time or recurring invoice, enable Allow Customer to Save Card on File so your customer can approve. Then you’ll be all set for repeat billing.
Note: If you need to manually save a card on file from your Virtual Terminal at your computer, you’ll need to print out the approval form so your customer can sign it first.
Here’s a screenshot of what the setup looks like for recurring invoices within the Square Dashboard.
With Square Invoices, you can also request a deposit, either due immediately or within a specific time-frame. So for you business owners that charge a sign-up or other set-up fee, you can seamlessly add in a deposit request and cover all the bases.
Getting Paid with Square Invoices
When your customer makes a payment, credit card payments update automatically in their invoice. Your customer follows the Pay Now prompt to enter their details and can also approve saving the card on file.
Did your customer send a check or pay you by cash? You can also record payment manually when you open up the invoice. If your customer wants to pay over the phone, you can process the amount on your computer through the Square Virtual Terminal located within the Square Dashboard. And finally, you can process in-person payments and apply them directly to the invoice by swiping, dipping, or tapping your customer’s card to your connected Square Reader. Just make sure you go into Invoices and apply the payment to the existing customer invoice.
Square Invoices (read our review) also makes it easy to track when your customer saw your invoice and any activity within the account. You can quickly send a message to follow up or edit the invoice any time from your Square Dashboard.
How To Use Square Installments For Invoices
Another solution that may boost sales is offering payment plans through Square Installments. Square Installments for Invoices finances the cost for your customer, so there’s no need for you to invoice repeatedly; instead, you are paid upfront and in full by Square. Square Installments is currently only available to select businesses, however. You’ll need to apply, and if you are approved, the Installments option automatically appears as a payment option on your invoices and Square POS.
When your customer chooses Installments (either via their invoice or your Square POS), they’ll apply directly with Square Capital at the time of the sale. If they are approved, the balance is reflected in your account. Also note that after the sale, Square Capital takes on the liability of the charge, so you won’t deal with collecting or processing payments. In fact, Square instructs any merchant to direct all questions or issues your customer may have with their installment payments to Square Installments directly. Find out more about it on our post, How Does Customer Financing Through Square Installment Work?
How Much Do Recurring Payments Cost With Square?
Below is a breakdown of Square’s payment processing per transaction. When you crunch the numbers, keep in mind that you are getting an all-in-one solution as far as payment security with PCI compliance and chargeback support. Square doesn’t charge monthly service fees either, so what you see is what you get as far as costs go.
- Invoice paid with card by customer: 2.9% + $0.30
- Invoice paid with card on file: 3.5% + $0.15
- eCommerce processing: 2.9% + $0.30
- Square Installments for Invoices: 2.9% of the purchase price + $0.30
- Square Installments at your Point of sale: 3.5% of the purchase price + $0.15
- Square online payment API and SKIs: Free for developers to use + eCommerce processing fee
- Plug-in apps integrated with Square: Price varies with each software provider
Should You Use Square’s Recurring Payments Tools?
Setting up recurring payments for your customers takes a little bit more forethought and prep than a one-off charge. However, Square makes recurring invoices accessible by offering a range of solutions for both eCommerce and brick-and-mortar shops.
As far as third-party processors and eCommerce go, Square offers similar solutions as its peers. In other words, you’ll likely need the help of a developer with any option you choose, including PayPal or Stripe — unless you opt for a plug-in app. That being said, Square enables you to get eCommerce up and running safely — whether that is through a pre-built workflow, easy integration with a plug-in app, or API developer tools. (If you do have the developer expertise and a bit more wiggle-room in your budget, it’s worth mentioning that Stripe affords greater freedom to customize the whole process, add advanced reporting features, and a lot more. But you can’t be shy with code!)
Still curious about Square? Why not give them a try and see for yourself? There is no fee to sign up and no binding contract required, so setting up an account may be the next step for you. You can also head over to our Square Review and read how it compares to the other solutions out there.